David Shorenstein | Philanthropy And Blockchain Technology: How are They Related
With the COVID-19 pandemic impacting people regardless of borders, it might be time to look for a borderless solution to philanthropy. Enter blockchain technology, which powers Bitcoin and other cryptocurrencies. This tech was created to solve some of the problems with currencies that belong to specific nations.
Although the COVID-19 pandemic has provided plenty of opportunities for both individuals and organizations to donate to those who are in need, the idea that blockchain technology, which powers Bitcoin and other cryptocurrencies, can be used for philanthropy has already been around for several years. In 2017, for example, the Pineapple Fund was created with the goal of raising cryptocurrencies that could be distributed to 60 different nonprofit organizations. Pineapple Fund quickly raised the equivalent of USD 55 million in just five months, proving that cryptocurrency was capable of raising funds and that its users were interested in helping.
Some well-known traditional nonprofits have tried their hands at cryptocurrency trading, too. The Red Cross, Save the Children, United Way, the Wikimedia Foundation, and the Electronic Frontier Foundation have all allowed donors to contribute via Bitcoin or other cryptocurrencies in the recent past. And Fidelity Charitable reported receiving USD 69 million worth of cryptocurrency donations in 2017 alone. Some coins technologies, including Clean Water Coin and Pinkcoin, have been created for the sole purpose of supporting nonprofit organizations.
Jump to 2020, and we see various organizations responding to the crisis created by the spread of the novel coronavirus. Stella, the organization behind a cryptocurrency known as Lumens, announced that it would match any donations made with its proprietary Lumen tokens. The Giving Block, which enables nonprofits to accept donations via cryptocurrency started #CryptoCOVID19. Finally, the cryptocurrency platform Paxful pledged to help ensure that communities in Africa received supplies such as PPE to deal with the pandemic.
The fact that both organizations and philanthropists find cryptocurrency useful shouldn’t be a surprise. Donating with cryptocurrency doesn’t require tax paid on capital gains. And nonprofit organizations can reduce overhead costs, especially international fees, that are associated with accepting donations when they use cryptocurrencies. Knowing that more of their money is going directly to the cause can encourage some people to donate — more frequently and more generously.
This blog was previously published on July 15, 2020 at DavidShorenstein.net