Departing from the traditional fundraising methods, more and more charities are looking for new ways, and currencies, for people to donate. The latest way is through NFTs and cryptocurrency.
Popularized in the past few months, NFTs have been auctioned off by artists, celebrities and athletes. But charities are also benefiting from this technology and are learning how to utilize it to support their causes.
NFTs, or nonfungible tokens, are nonexchangeable digital items that have a sole owner. Unlike Bitcoin, they can’t be traded among each other and must be bought. While NFTs have been around for several years, they have recently become popular as a way to sell digital art.
What can be an NFT?
One of the most notable examples was when digital artist Mike Winkelmann, more commonly known as Beeple, sold his artwork at nearly $70 million.
Created – or minted – using blockchain technology, NFTs are most commonly held on the Ethereum blockchain, although other blockchains support NFTs as well.
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Many NFTs can still be viewed, especially things like famous images or videos, but the NFT still has a unique digital signature that only the buyer owns.
In order to sell, NFTs must also be minted after they are created, which will ensure that the NFT is trackable and unique and it can then become part of the Ethereum blockchain.
How do charities use NFTs?
NFT4Good was a project created by several co-founders including Daniel Kim and David Christopher Lee. The project raised $80,000, which was then donated to the #HateIsAVirus organization which aims to highlight Asian American and Pacific Islander (AAPI) voices and works to dismantle racism.
For the project, Lee said they created animated trading cards illustrating various Asian American influencers, celebrities and athletes that were then minted as NFTs. These cards – showing the likes of journalist Lisa Ling and actors Jimmy O. Yang and Margaret Cho – were priced at $88 each. There were also several cards featuring AAPI allies, making 88 in total.
In addition to the digital card, those who bought an NFT also received a physical card. The project ran from May 1 to May 9, kicking off AAPI Heritage month.
“It was magical to see the community come together and really stand up for what they believe in.” Lee told USA TODAY adding that he the other founders weren’t confident on how the project would do.
Noora Health, a nonprofit organization that helps train patients to have the health skills necessary to take care of themselves and their families, also auctioned off an NFT in May titled “Save Thousands of Lives.”
Sold on Opensea, the displayed NFT is a short video compiling several photos that eventually spell out the phrase “Save Thousands of Lives.”
The organization said the auction was largely about the knowledge that the buyer would have that their donation is helping to save lives rather than the NFT itself.
The NFT was bought by Paul Graham, a programmer and author, with a donation that Noora Health said equated to about $5 million – their largest donation to date.
Where does the money go?
Another organization that is planning on using NFTs is Alex’s Lemonade Stand, a nonprofit organization that focuses on funding pediatric cancer research and programs to help families affected by childhood cancer.
Jay Scott, co-executive director of Alex’s Lemonade Stand, said they are planning on using artwork from childhood cancer patients to create NFTs, and will most likely auction them off in September during childhood cancer awareness month.
While several nonprofits are beginning to accept cryptocurrency, and some are auctioning off NFTs themselves, there is still a steep learning curve and uncharted territory.
“Well, it’s kind of scary because you’re afraid of creating something and then nobody’s interested,” Scott said. “The reality is that as a charity creating an NFT, we think that for this kind of NFT, it’s less of an investment for the person doing it, and they’re doing it more because it’s a good cause.”
The cost of creating an NFT can vary widely depending on what platform the NFT is sold on as well as fees for minting and listing the item, but one estimation ranges from $1 to $1,000.
Scott added that they have been accepting cryptocurrency donations for several years and have raised nearly $100,000 that way.
The future of charitable donations
Other organizations like Save the Children, the Fred Hutchinson Cancer Research Center, and the Leukemia and Lymphoma Society are focusing on accepting the proceeds from NFTs rather than accepting or using NFTs themselves.
Ettore Rossetti, a senior adviser in digital and marketing innovation at Save the Children, said they have been accepting cryptocurrency donations since 2013 but have seen an increase in cryptocurrency donations in 2020 and 2021, with the total of those donations nearing “seven figures.”
“The past doesn’t equal the future, meaning we can’t think linearly about solving tomorrow’s problems with yesterday’s or today’s solutions or technology,” Rossetti said. “We need to continue to innovate for tomorrow.”
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While they discussed using and accepting cryptocurrency for several years, Kelly O’Brien, vice president of philanthropy at the Fred Hutchinson Cancer Research Center, said they only recently began accepting cryptocurrency and so far have received a $20,000 donation resulting from the proceeds of an NFT auction.
“One challenge is continuing to have transparency with our donor community for all the ways that they can give. This is the newest and the latest, but there are many ways that people can be generous,” O’Brien said.
In addition to charities adapting their policies and fundraising methods, there have also been a number of companies and celebrities that have come out and established NFT auctions and donated the proceeds. Last month, Merriam-Webster said they would be auctioning off the definition of an NFT and donating all proceeds to the nonprofit education organization Teach For All.
What will charities do moving forward?
While cryptocurrency continues to evolve, so do the nonprofits that seek to use these new fundraising methods.
Several organizations noted the requests from donors to accommodate cryptocurrency donations, and many of them plan to continue or expand their use of NFTs or cryptocurrency in supporting their causes, as they navigate how to best assess fundraising methods.
Gannett, parent company and publisher of USA TODAY, will launch a 48-hour NFT auction, celebrating the 50th anniversary of Apollo 14 astronaut Alan Shepard delivering the first newspaper to the moon (Florida Today). The auction will be in benefit of The Air Force Space & Missile Museum Foundation and the Gannett Foundation.
“You’ve gotta be part of it or you’re gonna be left behind.” Scott from Alex’s Lemonade Stand said. “We’re always trying to be on the cutting edge of things. If you’re not in early, you’re late to the game.”