What Is the Impact of Crypto on Philanthropy

Traditional charity differs substantially from crypto philanthropy. Donor demographics, financing structures, and even the motivations for donating are all shifting as a result of these variances.

The increasing frequency of these crypto gifts suggests that this kind of giving will have a long-term impact on the charity sector, and may even revolutionise philanthropy. The availability of cryptocurrency for charitable giving has already prompted fresh waves of younger people to investigate philanthropy and aided smaller charities in competing for donations, but these may only be the beginning steps as digital assets become more ingrained in our lives.

Skyrocketing crypto donations

Last year was by far the most successful in terms of cryptocurrency donations. According to Fidelity Charitable, a nonprofit that assists contributors on charitable giving, 45 percent of cryptocurrency investors donated to charities in 2020, compared to 33 percent of all investors.

In comparison to $28 million in 2020, Fidelity Charitable got roughly $331 million in cryptos. Giving Block, a crypto donation platform, announced $69 million in total donation volume last year in its annual report, a staggering 1,558 percent increase over 2020.

The simplicity with which cryptos can be sent to any area of the world allows charitable organisations to have contributions from all over the world. Many worldwide charities have begun to accept cryptocurrency donations. To deal with cryptocurrency, UNICEF developed CryptoFund, a new financial entity. Several large organisations, including the Red Cross and Greenpeace, have begun to accept cryptocurrency.

Nonprofits that are unable to obtain money owing to government restrictions benefit from cryptocurrency donations. WikiLeaks, an international non-profit that distributes news leaks, was banned by the US government in 2010, and its funding was restricted by Visa (V), Mastercard (MA), and PayPal (PYPL). WikiLeaks is now receiving millions of dollars in cryptocurrency donations. Despite its meteoric rise, cryptocurrency philanthropy remains a specialised type of giving that differs in many ways from traditional techniques.

Cryptocurrency users are, on average, much younger than traditional philanthropic givers. Over 60% of cryptocurrency users are under 40 years old. The average age of crypto users in the United States is 38, while the average age of donations is 64.

In 2014, United Way, a global nonprofit organisation, began accepting cryptocurrency. According to website analytics, the average user is 45 to 65 years old, and 80 percent of them are female. Meanwhile, the average age of visitors to United Way’s crypto donation site is 25 to 35 years old, with males accounting for 80% of the total. Cryptocurrency is attracting a big number of young individuals to philanthropy.

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