You’ve already prepared your direct mail and email messaging for GivingTuesday and December 31st, but has your nonprofit developed an effective strategy for engaging Millennial and Gen Z donors? One new way to reach this group is to try incorporating NFTs in your year-end fundraising campaign.
Donating cryptocurrencies like Bitcoin and Ethereum has become the fastest-growing charitable giving trend for young donors, and NFTs are indisputably one of the most exciting features of the crypto ecosystem. In recent years, NFT sales have reached new heights. In the first three quarters of 2022, for example, NFT sales reached $24.3 Billion.
More and more, NFT creators have become philanthropists that support causes including Ukraine humanitarian aid, LGBTQIA+ rights, and mental health services. As a result, it’s never been easier for nonprofits to reach a new type of donor, the crypto donor, by tapping into the excitement around NFTs.
What are NFTs?
NFT stands for “non-fungible token,” which is used (a) to store a piece of data on a blockchain, which can be thought of as the platform for, and public record of, cryptocurrency transactions, and (b) to validate the ownership of that data. An NFT holder owns the unique data, or item, associated with it.
Digital art is the most popular use case for NFTs today, but an NFT can be used to represent any unique item—whether it’s a work of art, a piece of music, sports tickets, or even the completion of an educational course.
The rise of NFT fundraising
Increasingly, NFT creators are using their platforms and profits to establish successful charitable giving initiatives, often in direct collaboration with the nonprofits they support. Last year, we at The Giving Block processed crypto donations worth more than $12 million from the NFT community.
Today, many of these projects launch with a commitment to donate from day one. For example, some will pledge to give 10 percent of sale royalties to a nonprofit in perpetuity. Others may donate a lump sum of crypto, organize a community vote to decide which cause to support for their next collection, or co-host a charity auction with a specific nonprofit.
Many popular NFT projects, creators, marketplaces, and platforms including the Bored Ape Yacht Club, World of Women, Woodies, ArtBlocks, CryptoPunks, and NiftyKit have all made or enabled in-platform charitable donations to support important causes.
Why year-end is an ideal time for an NFT fundraising campaign
Before you finalize your year-end strategy, here are a few reasons why you should think about including an NFT fundraising effort in your campaign:
1. Crypto donors tend to be highly charitable
Crypto donors are relatively affluent: the per capita annual income for crypto users has been calculated to be $111,000. That fact, coupled with a finding by Fidelity Charitable that cryptocurrency users are also a highly generous bunch, should get nonprofits excited about reaching crypto users. According to the Fidelity report, crypto users are more likely (45%) to have donated over $1,000 to charity compared to all investors (33%). In 2021, this community donated crypto worth at least $400 Million to charities.
2. The year-end giving season sees the highest crypto donation volume
Similar to cash donors, cryptocurrency donors often give in November and December. Many of them are thinking about getting tax deductions, with the added benefit of donating non-cash assets, which could enable them to reduce or offset capital gains taxes that they would otherwise pay.
Additionally, the crypto community has its own unique charitable giving days, like #NFTuesday and Crypto GivingTuesday, which fall in the last few months of the year and boost the visibility of all nonprofits that are actively fundraising cryptocurrency.
3. Everyone appreciates a token of gratitude
Donors often like to get something in return, and NFTs are a perfect way to reward every donor with something unique. From the consumer perspective, NFT collectors like to purchase NFTs with a charitable giving component, in the same way that conscientious consumers will purchase from companies with a “buy one, give one” model or another philanthropic pledge.
As you think about improving your donors’ giving experience, consider whether incorporating NFTs into your campaign can leave a positive impression and help build relationships with both existing supporters and those just getting to know your mission.
4. NFTs help a new demographic of donors feel welcome
The crypto user base, which includes NFT creators and collectors, is growing fast; at the start of 2022, there were 300 million users worldwide. The overwhelming majority of users are Millennials and Gen Z, groups that are often difficult to steward as donors.
But while crypto and NFTs may seem niche, adoption has spread quickly. A Bank of America study released in October 2022 found that 47% of U.S. investors under the age of 43 have invested in cryptocurrency.
Nonprofits finding that Facebook fundraisers and email outreach are not performing as well might try NFT fundraising to connect with younger donors in their preferred communications channels.
NFT fundraising ideas for your nonprofit
Nonprofits have used NFTs to fundraise in several innovative ways, including:
- Hosting an NFT charity auction with a single project or a collection of artists
- Getting a commitment from an NFT project to donate a percentage of royalties
- Asking an existing corporate charity partner to coordinate an NFT fundraiser for you
- Coordinating a charity event specifically for an NFT’s community of collectors
- Collaborating with an NFT project to create a unique collection
- Creating your own NFTs and selling them to support your mission
These methods require varying levels of knowledge and experience, so it’s a good idea to do some research, connect with other nonprofits who have already had success in this area, or reach out to crypto fundraising experts.
Actions you can take today to start preparing for your first NFT fundraiser
If you haven’t explored accepting cryptocurrency donations yet, now is a great time to start. Here are six steps you can take if you’d like to add some NFT-related fundraising to your year-end fundraising campaign.
- Talk to your leadership team about accepting crypto donations. Depending on your nonprofit’s bylaws, you may need to amend your gift acceptance policy so that it specifically mentions cryptocurrencies.
- Find a solution that fits your team’s fundraising goals. Not all crypto donation platforms are alike. Are you looking for a DIY method to accept crypto, or do you need a service that provides the technology, expert support, and crypto fundraising advisors?
- Ask your current donors. Find out if your current supporters are familiar with crypto and NFTs. Have any of them bought an NFT to support a nonprofit?
- Become inspired by what others are doing. Hop on Twitter and follow hashtags like #DonateCrypto and #NftsForGood, or search “charitable nft projects” on Google to find examples of successful nonprofits and NFT collaborations.
- Be a champion for NFT-related charitable giving. Collectively, nonprofits should view all NFT fundraising projects as wins for the sector. A simple like, comment, or retweet can help make this fundraising strategy more mainstream.
- Reach out to NFT projects. There’s still time to connect with NFT projects about year-end collaborations. The time to start these conversations is now!
If your nonprofit wants to watch from the sidelines this year, that works too! Be sure to cheer on the success of other organizations experimenting with NFT fundraising, and give a public show of support. When you’re ready to start fundraising with NFTs, you’ll have a keener sense of campaigns that have resonated with those valuable Millennial and Gen Z donors.
Pat Duffy is the Co-Founder of The Giving Block, an all-in-one cryptocurrency fundraising solution trusted by thousands of nonprofits.