You might have seen that funny Coinbase commercial during the Super Bowl on Sunday. A QR code bounced around the screen, reminiscent of the old Windows screen savers.
I confess I fell for it, lunging toward my computer screen with my phone camera. It was indeed a working QR code, taking you to Coinbase.com. The commercial worked, too: the app catapulted from #168 in Apple’s App Store to #2. Not bad.
That success came despite their website crashing from the traffic and despite a rival cryptocurrency commercial from FTX.
With some 112 million people tuning into the game and two crypto apps spending millions on some of the most expensive ad space in the world, suffice it to say that cryptocurrency is on people’s minds and it’s turning a corner from fringe to mainstream. (I admit, it’s still turning.)
Just over a year ago, I wrote a piece encouraging nonprofits to begin accepting gifts of cryptocurrency if they weren’t already. I mentioned clients of mine receiving anonymous gifts through crypto and other organizations receiving massive donations in cryptocurrency. I’ve heard more such anecdotes—donations large and small, anonymous and public—over the past year.
After reading The Giving Block’s 2021 annual report, it’s no surprise that I’m hearing about crypto gifts—and it’s not surprising that I’m seeing crypto apps in Super Bowl ads. The short version of the report is that crypto philanthropy is growing astronomically.
No doubt their service (donation widgets that you can embed on your donate page) is playing a role in this growth by making crypto giving easier. And no doubt the growth of their platform is simply making known crypto gifts that were already taking place. (They don’t claim to account for all crypto philanthropy, like the crypto-version of Giving USA. They are providing data on transactions through their service.)
Nevertheless, it is worth taking note of the size of crypto philanthropy today. The Giving Block reports over $69 million in crypto giving in 2021. On its face, that’s a big number, but your cynical side may want to put it against the almost $500 billion in overall charitable giving ($471B in 2020). In terms of the philanthropic sector overall, crypto is about one-tenth of a percent.
But if we hone in on online giving, which flirts around 10 percent of all charitable giving, crypto’s $69 million accounts for about 1.5 percent of all online giving. It’s not a huge number, to be sure, but it’s not bad for the new kid on the block that is allegedly “fringe.”
The most intriguing statistic from the Giving Block, however, was average donation size. They report an average gift size of $10,455. That’s no small potatoes, if you are comparing against average donation size from individuals at most organization. It’s even more impressive if you hone in on online gifts in particular, in which case the average crypto gift is 82 times larger than the average online donation.
The first thing that stands out with the two data points I shared is that crypto giving is largely a major donor platform. $69 million in total giving with an average gift of $10,455 suggests that most gifts are major gifts. It’s not obvious that this will remain the case, but right now cryptocurrency appears to be a vehicle for major donors.
So that forces the question, why spend time thinking about crypto giving?
The main reason remains: why not? You can increase the number of ways your donors can support you, decreasing the friction they experience in giving to you and increasing (even if only slightly) the chances that they give to you. If the average crypto donation is over $10,000, isn’t it worth doing a bit of work to put that option in front of your donors?
But maybe you want a positive reason to spend time thinking and learning about cryptocurrency. One consideration, related to programs, is if you are an international nonprofit. If you send funds internationally to provide goods or services in other countries, cryptocurrency provides an extraordinarily easy way to send funds and convert money to different currencies. If you are receiving gifts of cryptocurrency, you can easily access those funds anywhere.
The compelling reason right now, though, is donor privacy. If ever the promises of blockchain technology materialize, then cryptocurrency assets might provide any number of benefits—from storing and transferring data to creating and employing smart contracts, and much else besides. When (or if) that happens, you’ll need smart people to help you make sense of things.
For now, cryptocurrencies function primarily just as currencies, and the question around crypto philanthropy is the question of accepting another form of currency. If “why not” isn’t compelling to you, then you might consider the value of anonymity that you can provide to your donors.
Earlier this week we discussed how to avoid “tainted gifts,” so my suggestion isn’t to use cryptocurrency to accept dirty money. But in our increasingly polarized world with daily new taboos, more and more donors want to be cautious about who knows where their money goes. This is partially behind the increase in donor-advised funds—but as DAFs face the question of more regulation, cryptocurrency remains a largely unregulated playing field that promises full anonymity for donors who do not want gifts you receive traced back to them.
Those donors can still alert you to the gift, of course, if they choose and if you have a good relationship with them—so my point is not that donors can hide from the organizations they support (though that is true). The point is that donors you work with and cultivate can deepen their engagement with you, without exposing themselves to public scrutiny, by delivering completely anonymous cryptocurrency donations.
Again, it remains a small audience interested in this option, but from the Super Bowl to Morgan Stanley, we can see growing adoption of cryptocurrency. Prior to the lockdowns that quartered us in our homes and glued us to our screens, online fundraising received much discussion and little money. Then in 2020, online giving increased by more than 30% and use of digital technologies skyrocketed.
Those organizations that took the time to be ahead of the curve with their online presence benefited from that position. You have that opportunity today with cryptocurrency. The Giving Block reports a 1500% increase in dollars donated through their system, along with several creative ways they have devised for crypto users to support nonprofits.
By offering donors a way to donate cryptocurrency to your organization, you ensure that they have as many ways as possible to support you, you give them the ability to protect their privacy, and you stay slightly ahead of the curve as crypto giving grows. Just remember to get your investment policy in place. You might love being responsible for holding a crypto donation during a bull run . . . but as anyone with crypto assets knows, a sharp dip is never far behind.