Let us introduce you to the pioneers in crypto philanthropy, present you with unique projects, and explain why Solana is a much better choice than Ethereum regarding decentralized philanthropy.
Old Donation System is OUT, Crypto Philanthropy is IN
Philanthropy is charitable giving by individuals and organizations to worthy causes and includes donating money, time, and other forms of altruism. The start of the pandemic has only enhanced the existing global problems and contributed to more poverty, world hunger, and poor living conditions in general. It has never been so difficult for an average person, who’s affected as well, to turn to philanthropy, but it has never been more needed.
It’s a myth that only vast amounts of money can make a difference. Every penny, in the right hands, is valuable. Now, we’ve come to the first problem.
Photo Illustration: Freepik
You’ve probably experienced being stopped on the street by someone representing a charity organization asking you for a donation. You either gave them a few bucks just to brush them off or were suspicious and wondered where the money would go. And we don’t blame you. If you don’t see how your money contributed to the cause, how can you be sure you’re not just throwing it to the wind?
Citizens need to question the old system. Luckily, we have evolved enough to develop new ways of helping those in need.
If you could choose a cause to which you want to contribute, to get in touch with people you’re helping, it would be a much more meaningful relationship towards philanthropy, wouldn’t it?
If you agree with the previous question, we have good news: Web 3.0 made that possible.
Crypto philanthropy differs significantly from traditional ways of giving. These differences are changing donor demographics, funding models, and even the reasons for giving.
Tanvi Ratna, CEO of Policy 4.0
How does Crypto Philanthropy Work?
According to the Fidelity Charitable report, Crypto philanthropy has been especially popular among millennial crypto investors who are a ‘charitably inclined‘ generation.
- 9 out of 10 millennials think of charitable giving as an essential part of their lives.
- ¾ of surveyed millennials consider themselves philanthropists.
Moreover, their study found that 45% of crypto owners donated at least $1,000 to charity in 2020 compared to 33% of general donors. What’s more, #CryptoGivingTuesday was a viral hashtag on Twitter for quite a while.
However, 46% of crypto charity donors said finding an organization that accepts crypto was complicated. Luckily, that’s where DAOs come in to help.
Let’s simplify the current landscape – what NGOs were in Web 2.0 and DAOs are in Web 3.0. Well, at least when it comes to philanthropy.
Members of a community that shares interests and values join forces to run a DAO. That’s why DAO is usually centered around a cause that members believe in. The aim of DAOs is to be computer programmed, without the need for human intervention or controlling force. But we’re not there yet. Since there’s no authority figure, understandably, DAOs use democratic voting for every decision.
Let’s see how the DAO of Honey Badges works. This DAO funds global changemakers – individuals who are usually not a part of traditional grant-making processes. Not only that, but they lack access to scholarship programs. Nonetheless, they are exceptionally impactful humanitarians, making a real difference in their communities.
“We have an NFT collection of 10,100 pieces designed to fund global changemakers. The purpose is to create a community of people who care about giving back. Not only that, we want to find a sustainable way to do it. We channel all royalties from our secondary sales into the community wallet. Then we split those up each month and distribute them to global changemakers who are already making the world a better place. They just needed stage funding to scale up their operations and maximize their impact”, said G. D. Anderson, the Founder of Honey Badges, in the podcast ‘Women of Web 3.0’.
Screenshot: Honey Badges
In other words, your donation, no matter the amount, is your voice (or your vote, if you will) that allows you to choose who receives the funding.
Examples of Successful Projects
NFT hype around digital art taught us that artists can receive around 10% royalties from secondary sales. Consider that in another environment, and you’ll see how it can be a huge potential for charities.
For example, ‘The Cova Dignity Collection’ gathered female artists only. Their mission was to donate the initial sales price and royalties to charity. As a result, these charities raised thousands of dollars.
“Why would I donate to a charity organization that has offices worldwide when I can give a peer-to-peer grant to somebody in the space? For example, that can be a Nigerian activist and artist who needs an iPad. I can literally transfer that amount from my account to their account. Moreover, there are no tax rates or middlemen. And I know the exact impact it will have. We need to ask ourselves, is there a better way to do it in this new landscape?” wonders G. D. Anderson.
Additionally, fundraising in a traditional sense takes insane amounts of time, energy, money, and a devoted team. But in Web 3.0, the whole process is optimized and time-efficient.
Another example emphasizes the trend of anonymous crypto donors. There are many reasons why people would want to hide their identity. Some of them are emotionally charged, whereas others just don’t want that kind of attention to overshadow the cause.
Photo Illustration: Freepik
In one of their articles, Coindesk referred to one LGBTQ+ charity that received a huge crypto donation. Members were confused why would anyone want to keep such a great deed anonymous. As it turned out, it was a gay man who had never made previous donations because he was closeted and was afraid his identity would be revealed. Thanks to crypto, he could make a change while still keeping his privacy untouched.
Why do Charities Use Solana instead of Ethereum?
Before we conclude, it’s crucial to accentuate another aspect of crypto philanthropy related to its cost and environmental impact. G. D. Anderson explained why they opted for Solana instead of the more popular choice, Ethereum.
“We went with Solana, which is Carbon neutral because we wanted to make a choice that would represent the values of our project – accessibility, environmental benefits, and cross-chain literacy. The latter means that once women enter Ethereum, they never move, while 27 crypto bros make money on other crypto chains. So, our mission was also to bring more women into this new blockchain space. As a result, around 1,000 women have successfully joined Solana”, says the Founder of Honey Badges.
Source: G. D Anderson
But there’s another, maybe even more important, side to it. They work with communities in Africa. So, to onboard them, let’s say to Ethereum, it would take around $200 for the initial setup. However, with Solana, buying their first set of NFTs goes down to only $6.
“If you mint something with Solana, it uses the same energy as two Google searches. So, for us, it was a no-brainer. Moreover, many artists have had problems working with companies and projects on Ethereum because they have spent so much time and energy getting themselves in better positions regarding environmental impact. So how can they turn backward and work on a blockchain detrimental to the environment?
Solana is the answer because we can do it ethically. Brands that care should put their money where their mouth is”, she concludes.
