Although they’ve been around for a few years, non-fungible tokens (NFTs) only became a pretty big deal in 2021. Almost every industry now has the potential to adopt NFTs, and these unique new assets are indeed the perfect medium for charities to raise funds in a safe, easy and transparent way.
Charities rely primarily on donations to provide the funds they need to continue their work. People can also donate and receive unique NFTs, such as digital artwork or collectibles, which can be traded on the open market.
This provides key benefits for both donors and beneficiaries of charitable giving. In this article, we will be discussing seven ways NFTs can be used for Charity.
What is an NFT
NFT is the acronym for non-fungible token, and it is a way of making any form of data tangible. Using a blockchain and its ability to create immutable records, specific images, songs, and 3D models, anything digital really can be “tokenized” to make it unique from all other instances of it. Once “minted,” NFTs can then be held, traded or sold in a transparent and verifiable way to everyone.
Seven Ways NFTs Can be Used for Charity
Some have already seen the potential in this shift and are engaging with it. For example, the artist Beeple auctioned off one of his “Everydays” collections, named “Ocean Front,” and donated the US$6 million proceeds to the Open Earth Foundation to combat climate change. Then look at Ellen Degeneres, who recently held her own series of NFT auctions, raising a sum of over US$33,000 for the World Central Kitchen, a food-relief foundation. Frankly, there are many more examples such as this, and likely even more coming in the near future.
2. Viral Content
This movement of artists and celebrities leaning into the trend is fantastic and highlights the potential for the space. Still, they stand as one-time events and don’t truly tap into the charitable fundraising power that NFTs have. To highlight what we mean, first think of some of the biggest charitable viral videos that the internet has produced in recent years, like the Ice Bucket Challenge in 2014 that brought in over US$135 million for ALS research. Alternatively, the Great Guide Dogs Virtual Tea Party raised money to support the services that companion animals can provide. These events are powered by content, videos and images that are spread virally and urge others.
3. Royalty System
Even more creative revenue streams are possible, too, such as having a royalty system that gives a return every time a specific video is watched or a song is played. Working in conjunction with artists, businesses, entertainment outlets and more, countless types of content could be generated and monetised and able to bring in far greater inflows of funding. The possibilities are huge and have only begun to be explored.
4. Traditionally Designed Auctions of NFT Items
Admittedly, not every cause is necessarily ready to begin engaging with NFTs as it can be an intimidating space. For the foreseeable future, traditionally designed auctions of NFT items can still do tremendous good and should continue to grow. However, spreading awareness of even more advanced possibilities is essential to bringing in new and more diverse offerings that allow regular people to support the organisations they care about and provide relief where necessary. Who knows, in time, this could even become the industry standard for raising funds and awareness for causes of all kinds.
5. An Ambassador to Create an NFT
Maybe you have a great ambassador for your charity who has a strong following. You could get them to create some artwork (digital art, film, music) and then auction it off using a marketplace such as Rarible, OpenSea or Foundation.
The process for minting an NFT differs slightly from site to site, but this “how to” guide by Foundation gives an example of what’s involved. Most marketplace platforms require users to use a cryptocurrency, so you’ll need to set up a digital wallet in the relevant currency to be able to use it.
Take Edward Snowden, American whistleblower and President of the Freedom of the Press Foundation. In April 2021, he auctioned off an NFT on Foundation, which raised more than $5.4 million.
6. Collaborate with Existing NFT Creators
If an NFT creator wants to donate auction proceeds to charity, they can auction it off using their preferred platform. They’ll need to set the payout address to your organisation’s cryptocurrency wallet address.
There can be big bucks involved in NFTs. In March 2021, digital artist and NFT creator, Beeple auctioned off “OceanFront”, which raised $6 million for the Open Earth Foundation.
7. Work with a corporate partner to create NFTs
This can be a win-win for both charity and corporate: driving brand awareness for both and raising funds for the charity. In the US, for example, Taco Bell sold 25 taco-themed NFT GIFS (NFTacoBells) to support the Taco Bell Foundation’s Live Más Scholarship.
The NFTs sold out within 30 minutes, with one selling for $3,646. The foundation will also receive 0.1% of every subsequent sale, meaning the foundation will continue to benefit long after the initial auction.