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Are NFTs the future of fundraising?

Published by Cat O Broin on

Unless you’ve been living under a rock, chances are you’ve heard of NFTs. But how much do you really know about them? For most of us, these three letters conjure up a jumble of disjointed factoids: ugly monkeys selling for vast sums of money while the rainforest burns. But there’s a lot more to NFTs than you might know, and they hold incredible fundraising potential. We caught up with Mikey Deegan of Mint Studios to learn more.

 

First things first, what is an NFT?

NFT stands for non-fungible token. The non-fungible part means an NFT is unique, one of a kind, and can’t be duplicated. “But how?” we hear you ask. The NFTs most of us have seen (or think we have seen) are digital images or videos, and we all know those can be copied. So, what gives? It might be more helpful to think of the NFT as the envelope that holds the piece of digital art. That envelope also holds other information about it, like the chain of ownership, contract details, copyright, and more. The envelope can’t be duplicated and the token lives on a secure blockchain. There’s a lot more to it, but you can find a more detailed explainer here.

 

So, what do NFTs have to do with fundraising?

Charities across the world are already benefitting from NFT sales, whether or not the organisations themselves are aware of it. Many NFT creators donate a portion of sales to charities they support, and some have even donated NFTs in much the same way as they might donate a physical asset. Brands have also begun partnering with nonprofits for hugely successful auctions; selling its first NFTs, Coca-Cola raised over half a million dollars for Special Olympics.

Engaging with the NFT world can bring other benefits for your organisation, too. NFT communities are highly engaged with one another – and could be highly engaged with your cause. While you may be familiar with collectible NFTs like the images and videos mentioned earlier, NFTs can open many more doors. Utility NFTs can function like a ticket to an event or the key to a community, granting access and unique benefits to the holder only. Collectible NFTs may also possess utility benefits. One example might be an NFT sold by a conservation nonprofit. The NFT could name the holder as the adoptee of an endangered animal giving them naming rights, and providing them with updates on how their adopted animal is doing, as well as access to a community of other adoptees where they can discuss conservation, talk to staff at the nonprofit about their work, and provide direct feedback. The holder of the NFT is encouraged to be emotionally and intellectually engaged with the cause, increasing retention and lifetime value.

 

But what about the environmental implications?

Most NFTs are based on Ethereum, a cryptocurrency that uses huge amounts of power in its energy-intensive verification system. It is this power use that has driven the valid environmental concerns around NFTs and cryptocurrencies. There are alternatives, however. Solana is another cryptocurrency gaining traction in the NFT world, and it’s one with a far lower environmental footprint. The energy use of a single Solana transaction is estimated to come in at 1,837 J. For comparison, keeping a LED lightbulb on for just one hour uses 20 times that much. The company achieved carbon neutrality in 2021, and other crypto developers have made promises to reduce their impact.

 

Getting started

It’s one thing to know a little more about NFTs, but another to get involved. The first thing to know is that your organisation will need to have a digital wallet set up in the relevant cryptocurrency in order to take part in transactions (as well as to receive cryptocurrency donations, but that’s another blog post!). Your organisation can then get involved in the space through a number of ways:

  • Ambassador collaboration: If your organisation has a well-known ambassador with a strong following or fan base, that person can create a piece of digital art for auction to their audience
  • Approach existing creators: If you know of an NFT creator who already supports your organisation or whose values you know align with your cause, you can approach them directly. Many creators donate a portion of their sales to causes anyway, and doing so can improve their performance at auction, so it can be a win-win situation. If the creator has a following they can share their passion for your cause with, they can help you reach huge new audiences, too
  • Use your creative assets: Some organisations own creative assets, such as iconic logos, that can be sold as NFTs
  • CSR: Brands, especially bigger brands and household names, are exploring the NFT space. Because the space is community-based, avoiding accusations of cash-grabbing is important for brand reputation. Partnering with a charity while they explore and experiment is a great way to fulfil CSR obligations as well as improving brand image

As with any new venture, the best step to take is the first one. Reach out to other nonprofits who have had success in the space, spend an afternoon on YouTube, or do some reading. Whether or not crypto-philanthropy is right for your organisation is up to you, but if it is, you don’t want to miss out.

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44 Comments

cupcake 2048 · January 13, 2022 at 07:33

Hello, a very interesting article. However, As I know, there are no legitimate NFTs on scam sites, so if you purchase one, you are just throwing your money away. What’s worse, scammers can record all the credentials you submit on the sites. What do you think?

    Ray Crompton · January 13, 2022 at 20:47

    Please give me an example of a charity here in Queensland that has taken up this concept
    Regards
    Ray Crompton

      Cat O Broin · January 14, 2022 at 10:12

      Hi Ray, we don’t have a list of charities that are involved across the world, but if you Google it you will find some information. Social enterprise firm Little Phil (based in QLD) is working on a project to support charities to take advantage of this kind of fundraising, so they may have more info also.

      Ntombenqaba Precious Petros · January 17, 2022 at 16:33

      Has any charity from South Africa take this?

    Cat O Broin · January 14, 2022 at 10:13

    We don’t have any experience purchasing them, but would recommend anyone interested in this kind of fundraising do their research thoroughly and work with partners who can advise them.

Girija Shankar Choudhary · January 14, 2022 at 14:26

I don’t know this type of fund raising.
I have some old Indian coins which I need to sale/auction and raise funds for our NGO. If you seriously help me, you are welcome.

basketballstarsunblocked · February 18, 2022 at 05:24

A good point is that we do not have a list of charities operating around the world, but if you look on Google you will find some information.

five nights at freddy's · February 15, 2023 at 04:08

Nice article that taught me something. This post is the best one on this important subject

slope unblocked · March 13, 2023 at 08:41

It can serve as an ongoing record of how your contribution is being put to use in the world, updated in real time.

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I have read many other blogs, but yours is the only one that has persuaded me, and I hope that you will continue to share more insightful content with readers in the future.

Coffee Funded · June 25, 2023 at 21:22

I have been reading about NTF’s but had not considered how they might help in fundraising. What a new concepts. I am going to continue to read about this.

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papa's pizzeria · July 3, 2023 at 05:59

NFTs are special digital tokens that can never be replicated and include information about digital art, such as ownership and copyright. As some artists offer a percentage of purchases to causes they favor or donate NFTs as tangible assets, charities have already profited from the sale of NFTs.

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capcut apk · August 18, 2023 at 19:24

It’s also important to note that the landscape of technology and trends can change rapidly. While NFTs might offer innovative possibilities for fundraising, several factors need to be considered:

Connections · August 21, 2023 at 02:53

Charities can benefit from cryptocurrency and NFTs in a variety of ways. Some charity in the United Kingdom already accept cryptocurrency donations or the proceeds of NFT sales.

andrea catalogos · September 24, 2023 at 21:16

They will no longer return to the way they were before. For me, NFTs were just temporary, some invested without knowing

dino game · October 11, 2023 at 06:04

Collectible NFTs may also have functional value.

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Thank you for informing us of this important information. I wait for new news from you.

CapCut Video Editor · October 25, 2023 at 11:43

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kadashika · December 6, 2023 at 09:32

A very informative article.

Nihal · December 9, 2023 at 19:33

An informative article. Like this

Doppelstabmatten Zaun · January 8, 2024 at 11:09

As we navigate this potential future, I’m curious to see how organizations will leverage NFTs to tell their stories, connect with donors, and, most importantly, make a meaningful difference.

Here’s to the intersection of technology and philanthropy, paving the way for a new era in fundraising!

yalla shoot · January 9, 2024 at 23:48

Informative post, thanks for sharing…

heardle · February 1, 2024 at 03:20

This ensures that the ownership and authenticity of the digital asset can be verified and cannot be easily duplicated or forged.

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