The holidays are an ideal time to give back, and the rise of cryptocurrency has opened up even more possibilities for charity endeavors. This was emphasized at Giving Tuesday 2021, the Tuesday after Thanksgiving when the nonprofit fundraising portal The Giving Block raised almost $2.4 million in cryptocurrencies.

Some in the industry anticipate that crypto donations will continue to rise as crypto philanthropy becomes a new subsector of the cryptocurrency economy. Alex Wilson, the co-founder of The Giving Block, said that the group collected roughly $4 million in crypto donations last year and expected to receive over $100 million this year.

According to Wilson, this surge is partly attributable to the fact that donating crypto is more tax-efficient than donating money. “Anyone who donates by Dec. 31 will be eligible for a deduction for the tax year 2021. So this is a fantastic approach to counterbalance some of your advantages.” According to Wilson, the Giving Block presently accepts crypto donations from over 1,000 NGOs, including St. Jude, Save the Children, and United Way. “We have a lot of agreements going live next year, and we expect our growth to pick up. We expect to process approximately $1 billion in donations and work with over 6,000 NGOs next year.”

For the holidays, there are several cryptocurrency giving campaigns

While a handful of NGOs have begun to accept cryptocurrency donations, it’s worth noting that cryptocurrency philanthropy initiatives are being launched this Christmas season.

For example, Upbring Innovation Labs, a Texas-based nonprofit dedicated to advancing technology in the nonprofit sector, created the Give Big TX Crypto Fund in early December. According to Ryan Park, Upbring’s vice president of innovation, the fund is a collaborative cryptocurrency effort including twelve Texas-based nonprofits:

“You can think of this as a ‘cause fund.’ The cause here is to make Texas a better place to live. This is also about showing nonprofits that they can adopt new Web 3.0 technologies to advance. The larger goal overall is to see Texas emerge as a leader in crypto philanthropy.”

According to Park, the Give Big TX Crypto campaign collaborates with Austin Pets Alive, Big Brothers Big Sisters Lonestar, Catholic Charities of Central Texas, and eight other groups. He also mentioned that the Texas Blockchain Council, a 501(c)(6) organization, is a part of this project because of the group’s work in developing blockchain across many businesses in Texas.

According to Kelsey Driscoll, senior innovation program strategist at Upbring, the campaign will accept over 40 different types of cryptocurrency for donations through Dec. 31, all of which will be processed by The Giving Block. “When donations are made, The Giving Block converts them to US dollars automatically, so accepting crypto has been just as easy, if not easier, than receiving fiat donations,” she explained. Driscoll also mentioned that the r/Bitcoin subreddit group would match Bitcoin (BTC) donations given to any of The Giving Block’s recognized charities.

This month, Pawthereum, a decentralized community-run enterprise that supports animal shelters, announced the launch of a philanthropic cryptocurrency campaign. Pawthereum’s 12 Days of Crypto Giving campaign, according to John Weathers, allows crypto donations to be made for specific programs that support animals in need. The Pawthereum project is a fork of the Grumpy Cat Coin joke cryptocurrency, which collected $70,000 in crypto money for the Sterling Animal Shelter in Massachusetts.

Pawthereum has raised $25,000 for Muttville Senior Dog Rescue, a San Francisco-based animal shelter that cares for dogs with special needs, thanks to crypto donations. According to Weathers, since the campaign began on Dec. 14, close to $400,000 in cryptocurrency has been given.

This year, NFTs are also being used to raise funds. Given that the market for NFTs is predicted to expand to $17.7 billion by the end of 2021, this industry is hosting one of the season’s major crypto charity events. This public auction, known as Right-Click, Give!, is hosted on the NFT platform Opensea. All proceeds from the auction will go to Blankets of Hope, a nonprofit that gives warm blankets to the needy and teaches kindness to children in schools.

As an ardent NFT collector, Mike Fiorito, co-founder of Blankets of Hope, is well aware of how welcoming the NFT community is as a whole. As a result, he anticipates the emergence of more NFT-focused humanitarian projects. “There are a lot of generous folks in the NFT field who are generating fortunes — big and small — and want to give back,” he said.

Park also mentioned that the Give Big TX Crypto campaign allows NFT artists to collaborate directly with NGOs to give money from nonfungible token minting. “Many NFT drop artists want to collaborate with NGOs, and this is an opportunity to do so. As a result, two NFT initiatives have agreed to donate the proceeds from their mints to our cause.”

Will charity cryptocurrency campaigns become popular?

Although there are presently only a few philanthropic cryptocurrency campaigns, the advantages of cryptocurrency donations may lead to broader usage in the future.

While crypto-assets donated to a registered nonprofit in the United States are exempt from capital gains taxes, there are other technological advantages. When it comes to crypto donations versus money, for example, Nawzad Amiri, a community leader at Pawthereum, remarked that the transparency afforded by a blockchain network, as well as the speed of transactions, is amazing.

Furthermore, according to data from The Giving Block, crypto donors may be willing to donate more to charity, with the average bitcoin donation size on The Giving Block being $11,000. According to Giving USA, the average charity donation for Americans in 2020 will be $737.

While the advantages may be obvious, education appears to be the most significant barrier to adoption. Even though Texas is becoming one of America’s greatest crypto capitals thanks to its welcoming attitude toward blockchain and mining power, Park said it has been challenging to recruit Texas NGOs to the Give Big TX Crypto campaign:

“We reached out to about 60 nonprofits and are partnering with 12 total. It seems like this would have been a shoo-in but there is still a long way to go in terms of educating the world on the potential of crypto philanthropy.”

Another issue worth highlighting is that, while NFTs may appear to be significant donation assets, tax deductions are questionable. Fiorito said he’s still figuring out whether donating NFTs is a tax-deductible event. “Because we are so early in the NFT space, this is a hazy region,” he said. Because of this ambiguity, the Right-Click, Give! Auction is now accepting cryptocurrency donations via The Giving Block.

Crypto philanthropy has opened up new doors of opportunity for youth ready to give back despite the challenges. For example, Park pointed out that many of the NGOs involved in the Give Big TX Crypto campaign had a donor base that was over 70 years old. The average age of crypto users is 38 years old, according to data from The Giving Block, as Wilson pointed out:

“The people donating here are individuals that live and breathe Web 3.0 or that have held crypto for a long time. A big piece of this now is just educating those people that this opportunity exists.”