Charities are turning to bitcoin and NFTs to raise money. Not everyone thinks it's a great idea
In search of donations to support their work, some charities and non-profits have started accepting funds in cryptocurrencies and are even experimenting with NFTs. And while some charities have found these novel forms of digital currency and goods a useful way of raising funds and awareness, not every project has gone down well with supporters.
What's clear is that there seems to be enthusiasm for making contributions to good causes via cryptocurrencies.
According to the annual report of The Giving Block, which makes it easy for potential donors to donate different types of crypto, the total yearly volume of crypto donations it received grew by 1,558% in 2021, compared to 2020.
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In addition, the average crypto donation was approximately $10,455, as opposed to the average cash donation of $128, or 82 times greater value per transaction. The Giving Block currently helps more than 1,000 mission-driven organizations, charities, universities, and faith-based organizations of all sizes to accept cryptocurrency donations – and says it has helped them raise millions.
Orangutan Outreach is one such organization that utilizes The Giving Block's platform to raise donations through crypto. The non-profit's mission is to protect, rescue, and help rehabilitate critically endangered orangutans. Founder and executive director Rich Zimmerman said that 2021 was a turning point for the organization's stance on crypto donations.
"We started accepting crypto around early 2020 and found very little overlap between our traditional donor base and our crypto donor base," he said. "[The crypto space] is a brilliant new world of people, many of whom are interested and care about the issues and actually make donations."
But Zimmerman said that what really got the ball rolling on their crypto journey was when last summer NFT pioneer, Bored Ape Yacht Club (BAYC), made a string of donations that equated to the largest contribution to Orangutan Outreach in the non-profit's history. Those donations sparked a greater interest in the NFT space, and Julius was born.
"Julius is our Bored Ape Ambassador, and he has become our representative and avatar across our social media, putting our name out there to people who otherwise would not have known about us or what we do," Zimmerman said.
He added that it's important to note that Julius is privately owned and was not purchased by Orangutan Outreach, adding that the cartoon ape NFT is used strictly for marketing and fundraising purposes. Julius spearheads the 'Bored in Borneo' Initiative, which involves orangutan conservation and massive reforestation work across Indonesian Borneo.
The Giving Block's report noted that NFT might be the single more significant development from 2021 as far as charities and crypto go, with more than $12.3M in donations made from known NFT projects.
Orangutan Outreach is hardly alone in accepting crypto; other charities like UNICEF, St. Jude, Save the Children, and others have also begun to accept cryptocurrency donations, and so do all 10 out of the top 10 charities listed as America's Top 100 Charities of 2021 by Forbes.
However, crypto donations have gotten some backlash because of the massive amounts of energy blockchain mining uses. For example, the annual use of electricity to power just Bitcoin alone is reportedly 134 TWh.
"We are aware that there are issues, and we hope and expect that the technology will continue to improve," Zimmerman says. "However, we look at crypto as a revenue stream, and we don't have the luxury of saying no to someone who wants to adopt an orangutan with Ethereum," he adds.
"Education and awareness are how we approach the NFT space," Zimmerman says. "There are people that want to do good with whatever money they have, and we have to acknowledge that."
But Orangutan Outreach isn't the only animal-focused non-profit that has utilized the crypto space: recently the UK division of the World Wildlife Fund (WWF) began to sell NFTs themed around endangered species to finance conservation efforts. The move was almost immediately met with backlash on social media, and the organization chose to discontinue selling NFTs shortly after.
"This work with NFTs was planned as a trial to test a new fundraising stream. We agreed with our partners to bring this to a close," a WWF spokesperson said. "We recognize that NFTs are a much-debated issue and we all have lots to learn about this new market, which is why we will now fully assess the impact of this trial and reflect on how we can best continue to innovate to engage our supporters."
And just before that, in January, the non-profit Mozilla Foundation said it was going to 'pause' the ability to accept cryptocurrency donations after one of its founders criticised its willingness to accept 'planet-incinerating' cryptocurrency.
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Riley Adams, a licensed certified public accountant and senior financial analyst at Google, told ZDNet that there are ways for charities to work around the unethical implications of crypto.
"If the concerns mount for the environmental concerns posed by crypto, actively shortlisting which coins a charity will accept based on environmental impact can virtue signal their dislike for pollution while also accepting financial resources for their efforts," Adams said. "Choosing which [crypto] to accept or decline is a step around the environmental concerns some coins pose.
For example, there are more sustainable crypto options such as Nano, Ripple, and Cardano that use less energy than cryptos like Bitcoin. In addition, Ethereum is currently working on upgrading its system to a proof-of-stake, which uses less energy than the proof-of-work method the blockchain uses, by Q2 of this year.
Adams added that cryptocurrency is simply just another method of storing value that can be liquidated to fund charitable causes.
"Crypto donations are an inevitability as more people dabble in the asset class and tap into an inner need to give back to charity," he said.
Zimmerman also sees cryptocurrency as an inevitable asset, not only to his organization, but the world of non-profits moving forward. He said that just as PayPal changed the game for fundraising by allowing online donations over sending cash and checks in the mail, crypto is doing the same thing.
"Crypto is here to stay," he said. "As we like to say at Orangutan Outreach, crypto is the key that unlocks the cages."