For the past decade, crypto has been associated with illegal activities, and politicians have stayed away. Is the perception now changing?
A Reuters report published on Oct. 8 claimed that Japan’s internal affairs and communications minister, Sanae Takaichi, confirmed to ministers in the country that crypto donations are not subject to financial regulations.
However, in the same announcement, Takaichi mentioned that donating cash or securities directly to a politician or a campaign is illegal. Only through technicalities in classification have crypto assets been able to fly under the radar of regulatory ordinance. As a result, politicians in Japan can receive individual crypto campaign funding without reporting the donations publicly.
Crypto regulation in Japan
Notably, Japan is one of the few countries to legally accept crypto. However, the country’s Political Funds Control Law, which controls crypto donations, doesn’t include crypto assets. There are two ways to look at this scenario.
The first way is through acknowledging that technology is outrunning regulators. Even though the Japanese Financial Services Agency proactively regulates crypto and has made it taxable for individuals, incorporating it in the entire constitution will take time — loopholes still exist and years of regulatory efforts are needed to cover all the gaps.
The second way is that laws governing individuals seem to pass with relative ease. Making cryptos taxable was advantageous for the government, resulting in the law being passed swiftly. However, legislation that gives politicians more power, like receiving unlimited anonymous funding through legal loopholes, will likely be overlooked for a long time. In an email to Cointelegraph, Alexey Ermakov, CEO and founder of financial services platform Aximetria, expands on this outlook:
“Governments and corporations around the world create and lobby artificial financial restrictions for people, in order to maintain full control over their money and make even more money on these restrictions, forcing people to use only those financial instruments that they can control, i.e. banks. The situation in Japan is just another instance to support this view.”
There are others who believe that documenting donations on blockchain could lead to an increased trust in the system. The transparency afforded by cryptocurrencies can make them beneficial to politicians, some of whom have struggled with them concerning financial contributions as well as the identities of their donors. Raising campaign funds with crypto would make their donors and donations a matter of public record.
Crypto donations for politicians in the U.S.
The United States Federal Election Commission has provided guidance on how politicians can receive Bitcoin (BTC) as a contribution. Unlike Japan, these donations have to be disclosed as donations. The trend of politicians embracing crypto donation began with Republican gubernatorial candidate Andrew Hemingway way back in 2014. The same year saw Dan Elder, who was running for the U.S. House of Representatives in the state of Missouri, becoming the first congressional candidate to fund his campaign solely with Bitcoin.
Kentucky Sen. Rand Paul became the first presidential candidate to accept Bitcoin for funding his 2016 campaign. Although Paul had expressed skepticism toward crypto, it was a logical political move considering the grassroots, libertarian support he fostered. In the 2020 election, after the decision by Rep. Eric Swalwell from Californian to withdraw from the presidential primary race, Andrew Yang is the only candidate that remains who accepts crypto donations.
The 27-year-old Agatha Bacelar, a Stanford engineer and designer running against Speaker of the House Nancy Pelosi, announced that she will be accepting cryptocurrency donations — including Bitcoin, Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC) and USD Coin (USDC) — through Coinbase to raise funds.
Numerous others in the U.S. have also made efforts to raise donations through crypto. Other countries have politicians raising funds through crypto too. For example, in Russia, opposition figurehead Alexey Navalny raised over $3 Million in Bitcoin donations.
Is it a marketing ploy?
Political fundraising through crypto could be used as a marketing tool more than a financial one. Candidates who accept crypto also do it to make a political statement. While Yang looked to strengthen his tech savvy image, Paul did so to gain more libertarian support. Talking about Yang accepting crypto, principal of Shipkevich PLLC and derivatives attorney Felix Shipkevich told Cointelegraph:
“This has been reported as a marketing ploy to appeal to a younger, more tech savvy audience. Yang’s acceptance of crypto could have positive side benefits however, including adding a layer of accountability around his donations as blockchain permanently records every transaction and the identity of the donor.”
A 2018 survey conducted by Clovr reported that 62% of eligible American voters believe that crypto donations could be used illegally in the U.S. political system — although the same poll showed that 60% want crypto political donations to be legal.
Some politicians like Hillary Clinton have rejected crypto donations in the past, for similar reasons that politicians accept cryptos. She was trying to appeal to the population that doesn’t trust crypto.
Crypto donations not restricted to political campaigns
Crowdfunding through crypto appeals to its inherently decentralized nature. The popularity of initial coin offerings and initial exchange offerings are a testament to it. And donations through crypto are gaining favorability, even in large organizations.
On Oct. 8, 2019, the United Nations Children’s Fund (UNICEF) launched a crypto fund. It announced that it will accept Bitcoin and Ether to support open-source technology benefiting children and young people around the world. Other prominent aid agencies that accept donations in digital assets are American Red Cross and the U.N. World Food Program.
The decentralized infrastructure provided by such crypto funds offers nonprofit organizations the advantage of bypassing expensive fees and middlemen traditionally required to move large amounts of cash overseas quickly. Additionally, tracking donations becomes easier and has the potential to allow donors to see how their money is used. On charities accepting cryptos, Ermakov said:
“In the context of donations, cryptocurrency plays, as a rule, a different function. Charitable foundations should regularly publish reports on their activities, indicating the sources of donations and how the money is being spent. Secondly, donating money to charitable organizations does not imply any kind of privilege neither political nor economic — this is very important.”
As global charities realize the benefits of donations through cryptocurrencies, the taboo associated around cryptos will likely diminish in the public’s eye. The software infrastructure around crypto also has to improve, and stories of hacks should be out of the news cycle to help with the perception. However, once adoption of cryptocurrencies spreads in the public domain, there is no doubt that politicians will start to look at raising funds through crypto.
Independent public charity Fidelity Charitable has received $100 million in cryptocurrency donations since 2015.
Independent public charity Fidelity Charitable has received $100 million in cryptocurrency donations, according to its recently published report.
In its “2019 Giving Report,” Fidelity Charitable illustrated account development throughout 2018, and provided insights into its growth since its establishment. Generally, the number of donors reached 204,292 in 2018, while back in 2009 the company had 51,918 accounts.
Eliminating capital gains taxes
When it comes to digital currency contributions, Fidelity received $106 million worth of cryptocurrency donations since it began accepting cryptocurrency in 2015, which includes $30 million in 2018. The report further notes:
“Though cryptocurrency values cooled off considerably by the end of 2018, they began the year at a peak. Fidelity Charitable’s ability to accept cryptocurrency donations, including bitcoin, allowed these donors to eliminate any capital gains taxes and give the full fair market value to charity.”
In 2017, Fidelity reportedly received $69 million — which made it a record year for cryptocurrency donations — while in 2016, the value of crypto donations amounted to only $7 million.
Some other philanthropic organizations around the world have also embraced cryptocurrency donations. Earlier in August, South Korean holding company SK C&C unveiled plans for a donation platform that is based on a Ripple blockchain fork. Moreover, the platform will support a stablecoin linked at a 1:1 ratio to the won, as well as a utility token.
A charitable crypto campaign dubbed “Airdrop Venezuela” registered around 60,000 verified beneficiaries and raised $272,000 since its launch in fall 2018.
Crypto developers in Iran have created a charity platform for crypto donations in an effort to bypass United States sanctions.
Volunteer cryptocurrency developers in Iran have created a blockchain platform called IranRescueBit, which allows people to make charitable cryptocurrency donations to aid regions in the country in recovering from destructive flooding.
Al Jazeera shared the news in a report on Aug. 14. According to the report, the platform supports donations in Bitcoin (BTC), Ether (ETH) and Litecoin (LTC). The government is reportedly not involved in the project.
IranRescueBit reportedly allows donors to dodge American sanctions that have insofar prohibited international donations to the Iranian Red Crescent Society, which is a non-governmental humanitarian society within Iran.
According to the report, the advantage of cryptocurrencies in this case is that no centralized authority is needed to verify the transactions due to the decentralized nature of crypto confirmations.
IranRescuebit executive director Hamed Salehi told Al Jazeera that the platform’s campaign is hoping to facilitate one month of crypto donations before using local exchanges to convert the cryptocurrencies into Iranian rials.
Once the conversion is complete, Salehi said the proceeds would be sent to a local bank account of the Iranian Red Crescent Society. Salehi commented:
“We hope that IranRescueBit can turn into a platform that could be employed either by the community or by the IRCS should the need ever arise again in the future.”
Record rainfalls in April gave way to destructive flooding that resulted in 70 deaths in 13 provinces with the highest casualties in Fars, Lorestan, Golestan and Hamedan, according to CNN.
Blockchain platforms for charity
As previously reported by Cointelegraph, the South Korean holding company SK C&C recently unveiled a scheme for a blockchain-based donations platform. As per the report, the platform will allow users to make donations and in return receive incentives tokens, which can apparently be used to buy merchant items.
However, regulations and technological challenges pose barriers to an official launch. SK C&C head Lee Sun-min explained:
“Since SK is a company, we cannot pursue profits in won stablecoins. Regulatory issues are not solved, too […] It’s hard to build a platform ecosystem […] Not just a single company can do it. We are currently looking for a company to build a platform ecosystem.”
Major cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin to its perpetual swap market insurance fund in a show of support.
Cryptocurrency exchange OKEx has donated $4.5 million in Bitcoin (BTC) to its perpetual swap market insurance fund as a show of support for the Warren Buffett Power Lunch.
More cushioning for traders
In a press release shared with Cointelegraph on July 23, the Malta-based crypto exchange revealed its contribution to the perpetual swap market insurance, whose amount is equivalent to what Tron’s Justin Sun paid to have lunch with Warren Buffett.
Andy Cheung, head of operations of OKEx, commented on the contribution saying that “the Power Lunch is a significant initiative to advocate the value of Bitcoin, blockchain, and digital assets to traditional finance leaders on Wall Street.” Cheung added:
“We wanted to support blockchain development in our own way and, more importantly, put our customers first. That’s why we decided to place our resources where our customers can directly benefit.”
The insurance fund is used to pay the amount of default value on a margin call before the clawback event is triggered. So the bigger the insurance fund, the less likely the clawback would be occur. The clawback mechanism would, therefore, act as the last line of defense if a large-scale systematic event occurs. Insurance serves as a cushion to protect trader’s profit from reaching the last defended line.
“The insurance fund minimizes the uncertainty and trading risk of which traders’ expected profit would be taken out, aka clawback risk,” OKEx explains.
However, as Cointelegraph reported earlier, the Tron Foundation is postponing the Warren Buffett lunch to an unspecified date due to founder Justin Sun falling ill with kidney stones. Nevertheless, the given donation plan will not be affected, according to OKEx.
Cryptocurrency donations taking off
The charity sector has been increasingly adopting digital currencies, with leading industry players having donated in a number of projects worldwide. This month, decentralized insurtech firm Etherisc launched a blockchain-based insurance platform for farmers in Sri Lanka through a partnership with the insurance company Aon and the charity Oxfam.
The Binance Charity Foundation announced an alliance of 47 organizations to make a token geared towards women’s health. Binance claims that a blockchain-based means of distributing charity will address inefficiencies and transparency issues that are purportedly present in traditional means of charitable giving.
Tron founder Justin Sun must postpone the Warren Buffet charity lunch due to medical reasons.
The Tron Foundation is pushing back the Warren Buffett Lunch and press conferences to an unspecified date.
According to an official Twitter post, Justin Sun — who successfully procured the lunch with Buffett by winning the affiliated charity auction — is currently out of commission due to kidney stones, and associated parties have agreed to reschedule the lunch.
In June, Tron founder and CEO Justin Sun won a charity auction on eBay to have lunch with Buffett, the famously successful investor and CEO of Berkshire Hathaway. Sun’s winning bid was apparently $4,567,888 — the highest bid in the event’s 20 year history.
On July 19, Circle CEO Jeremy Allaire accepted Sun’s invitation to join him at the lunch. In addition to Allaire, Litecoin creator Charlie Lee will also reportedly attend the event.
Warren Buffett has notoriously voiced some incendiary anti-cryptocurrency views. Last May, Warren said that cryptocurrencies will end badly, and called Bitcoin “probably rat poison squared. “
More recently, Warren claimed in February that Bitcoin (BTC) is a delusion, apparently because blockchain does not depend on BTC or actively produce something. Warren said:
“You can stare at it all day, and no little Bitcoins come out or anything like that. It’s a delusion, basically.”
The Miami Dolphins have partnered with Litecoin to support the altcoin as the team’s official cryptocurrency.
American professional football team the Miami Dolphins announced that Litecoin (LTC) is now the team’s official cryptocurrency, according to a press release on July 11.
The Miami Dolphins and Litecoin have also partnered with Aliant Payments, a crypto merchant services and payment processing firm, to enable crypto payments for the team’s upcoming 50/50 raffle, which reportedly donates half of its revenue to charity.
Cryptocurrency users will reportedly be able to buy raffle tickets with LTC and Bitcoin (BTC), and can do so online or via in-stadium kiosks at Hard Rock Stadium.
LTC and BTC are cryptocurrencies with similar technical underpinnings. Bitcoin remains the number one cryptocurrency by market cap with a total MC of over $201 billion at press time, while Litecoin clocks in at fourth with a cap of over $6.37 billion, according to data provided by Coin360.
In addition to playing a role in the aforementioned raffle, Litecoin will reportedly be appear in Dolphins in-game branding and an array of advertisement opportunities.
Charlie Lee, the creator of Litecoin and managing director of the Litecoin Foundation, hopes to use this partnership as a way to educate the public on LTC and cryptocurrencies in general:
“This collaboration propels Litecoin in front of an audience of millions of people around the world at a time where adoption of cryptocurrencies continues to gain momentum and the ecosystem is able to support real world use cases in ways previously not possible. We see this as a powerful way to raise awareness and educate people about Litecoin and cryptocurrencies on a tremendous scale.”
As previously reported by Cointelegraph, Portuguese sports club SL Benfica opened up payments via cryptocurrency for tickets and merchandise in June. The club partnered with cryptocurrency service Utrust to facilitate this new payment option. SL Benfica now accepts Utrust’s native token (UTK) as well as BTC and Ether (ETH) as payment options.
Digital money has been gradually transforming the world’s charity landscape, involving governments and traditional nonprofits.
The technology that underpins cryptocurrencies has been gradually entering the charity sector, purportedly providing more transparency and trust to the industry — especially given a decrease in people’s trust in charity organizations, where the public is increasingly concerned about how charities spend raised money.
Governments and blockchain projects embrace charity space
Governments around the world have been showing increasing interest in blockchain deployment and digital currency adoption for philanthropy, although few of them have implemented clear regulations toward the new type of currency at the legislative level.
Recently, the British Virgin Islands — a United Kingdom overseas territory in the Carribean — partnered with blockchain firm Lifelabs.io to launch an alternative cryptocurrency-enabled payments infrastructure for residents across its network of islands to ensure that residents can continue access essential goods and services in the event of a humanitarian crisis.
Andrew Fahie — premier and minister of finance of the British Virgin Islands — said that blockchain-based financial innovation “comes at a pivotal time for our people and our economy, while the memory of recent natural disasters remains fresh in our minds and hearts, and the pressure for increased economic efficiency keeps mounting.”
The mayor of the South Korean capital, Seoul, introduced a five-year plan for developing the blockchain industry in the city last October. The project entitled “Blockchain City of Seoul” contains a number of measures for promoting and developing blockchain-related initiatives and education in the city from 2018 to 2022.
Last September, China’s Ministry of Civil Affairs (MCA) revealed plans to implement blockchain as part of an overhaul of its charity tracking system. The MCA’s four-year plan through 2022 specifically pledges to “explore the use of blockchain technology in charitable donations, charity tracking, transparent management” and elsewhere.
Officials were set to “build a tamper-proof charity organization information query system and enhance the authority, transparency and public trust of information publishing and search services.” The plan confirmed that the blockchain tech component was chosen to “complete the new round of the ‘Charity China’ platform’s upgrade.”
Recent years have seen a number of blockchain and crypto-focused organizations — from well-known to newly formed ones — stepping into the charity industry as well. Just recently, news broke that a charitable campaign dubbed “Airdrop Venezuela” — which is set to enable direct transfer of $1 million in cryptocurrency donations to the country’s citizens — registered 60,000 verified beneficiaries and raised $272,000.
The campaign leader, professor Steve Hanke, underscored that the project aims to demonstrate how crypto can be used by relief agencies globally to securely and transparently deliver funds and aid to people in need. As the country struggles a still-ongoing political crisis and ongoing economic turmoil, bitcoin (BTC) trading volumes in Venezuela were reported to have reached an all-time high in February of this year.
In the United States, the Bail Bloc Initiativestarted using cryptocurrency raised through charity to help people get out of the U.S. Immigration and Customs Enforcement (ICE) pretrial incarceration last November. ICE is a law enforcement agency of the federal government of the U.S., the mission of which is to monitor cross-border crime and illegal immigration.
The Bail Bloc set a goal to help charged immigrants pay their bail with money raised through cryptocurrency mining. The initiative released an app that consumes a small portion — from 10% by default to 50% optionally — of users’ computing power to mine monero (XMR) once it is installed.
Leading cryptocurrency exchange Binance revealed in February that its philanthropic arm, BinanceCharity Foundation (BCF) — which was first launched in October 2018 — rolled out its charity campaign “Lunch for Children” in the capital of Uganda, Kampala. According to the program, the organization is set to provide two meals a day during the full year of 2019 to more than 200 students and school staff.
In late 2018, the BCF opened a new fundraising channel on its blockchain-powered donation platform. The program is conducted in support of terminally ill patients and disadvantaged children in Malta and Gozo.
The CEO of cryptocurrency exchange Coinbase, Brian Armstrong, announced the launch of a charitable initiative dubbed “GiveCrypto.org” to “financially empower people by distributing cryptocurrency globally,” last June. GiveCrypto.org intends to raise funds from crypto owners and distribute small amounts to people who live in emerging markets — more specifically, to those going through financial crisis.
A bitcoin-only charity called the Pineapple Fund that was established by an anonymous donor contributed 5,104 BTC to 60 charities around the world in 2017, supporting a variety of projects, from clean water supply in sub-Saharan Africa to digital rights protection. At the time, the donated digital currency was exchanged into $55,750,000.
The progressive adoption of digital currencies makes traditional nonprofit organizations more flexible in attracting funds from new sources. According to a report by the largest donor-advised fund in the U.S., Fidelity Charitable, the organization received over $30 million in cryptocurrency contributions in 2018 and $106 million since the program’s launch.
In 2017, Fidelity reportedly received $69 million — which made it a record year for cryptocurrency donations — while in 2016, the value of crypto donations amounted to only $7 million. Fidelity notes in the report that digital currency donations “eliminate any capital gains taxes and give the full fair market value to charity.”
Recently, the world was appalled by the massive destruction of the 800-year-old French cathedral Notre Dame de Paris following the devastating fire that engulfed the church on April 15. Days after, an array of companies, organizations and individuals donated millions of dollars to reconstruct the damaged cathedral, with the international cryptocurrency and blockchain community reacting promptly by launching donation campaigns as well. The French crypto community also launched a cryptocurrency donation campaign dubbed “Notre Dame des Cryptos” to help rebuild the cathedral. The team behind the campaign emphasized that many people around the world want to fund the reconstruction, with bitcoin being a global and universal cross-border solution that is reliable against censorship.
Blockchain’s potential to ensure fairer, more equitable aid and distribution of donated funds has been recognized by leading organizations around the world, including the United Nations, the Red Cross and Save the Children, and the Notre Dame case is just a local example of how effectively blockchain has been helping raise charitable donations in recent years.
United Kingdom-based Charities Aid Foundation (CAF)recognizes digital currency and blockchain as the technologies that “have some fascinating features that could have a huge impact on charities and charitable giving,” and points out their “potential for ‘radical transparency’ of donations, and the possibility of making it easier to get aid money to where it is needed.”
Commenting on blockchain integration into internal processes of charity organizations, Rhodri Davies, head of policy and program leader at CAF, told Cointelegraph:
“Radical transparency through the use of decentralised ledgers (either using crypto or some form of tokening) bring the potential for enhancing trust among donors by giving far greater certainty over how money is spent — this would be particularly valuable when giving cross-border into jurisdictions where there are often justifiable fears about corruption and mismanagement.”
However, Davies noted that radical transparency may cause problems, as well as that “many nonprofits already face challenges convincing sceptical donors about the need to spend money on core costs (which are seen as ‘overheads’ or ‘admin cost’) — if those donors were able to see where their individual donations went within an organisation, this is likely to exacerbate the problem as there would probably be many instances where a donor would not be happy that THEIR money wasn’t going to the perceived ‘front line.’”
How blockchain and crypto may transform the charity space
Recent years have marked a significant progress in the adoption of digital currencies and blockchain in philanthropy by some governments and international organizations. Indeed, blockchain enables donors to see what path their donations came from — from the moment it was contributed to the moment it was spent — purportedly ensuring a high level of transparency and eliminating misreporting.
The blockchain-powered project GiveTrack, backed by bitcoin nonprofit organization BitGive, was created with the objective to let donors trace transactions on a public platform in real time, thus being aware of the final destination of their donations. Over the life of the platform, it recorded fund flows to projects featured from Code to Inspire, Desafio, Run for Water and America Solidaria. BitGive — which supports 12 cryptocurrencies — carried out global campaigns, including Medic Mobile, the Water Project, Save the Children, Techno, Fundación Parlas and Team Rubicon for Tornado Relief.
Davies stressed that charities also need to be careful what they put on a ledger:
“For instance, if a grantmaker is funding LGBTQ rights in a country where homosexuality is still illegal (e.g. Uganda) and they use a blockchain-based platform to move money, they would need to be very careful that they didn’t unwittingly publish information that allowed organisations or individuals to be identified and arrested.”
News broke in 2015, when nonprofit media outlet ProPublica reported about inappropriate expenditures of donated funds that the Red Cross received in the course of the Lamika project, which was aimed at building of hundreds of permanent homes for those affected by the earthquake in Haiti’s capital city, Port-au-Prince, in 2011. The Red Cross had reportedly received nearly half a billion dollars, while only six houses were built as of 2015. “The Red Cross won’t disclose details of how it has spent the hundreds of millions of dollars donated for Haiti. But our reporting shows that less money reached those in need than the Red Cross has said,” the news outlet argued.
Notably, the survey “Trust in Charities and the Overseas Developments Sector” prepared by research consultancy firm nfpSynergy shows a 6% fall in people’s trust in charities in 2017, wherein 54% of 1,000 surveyed adults said they trusted charities “a great deal” or “quite a lot” compared with 60% a year earlier. Blockchain is set to cut out middlemen and issues presented by bureaucracy, as well as a lack of administrative expertise, which could subsequently improve the reputation of charities.
Francesco Nazari Fusetti, social entrepreneur and founder of Ethereum blockchain-based token AidCoin and full-service platform CharityStars, which was designed to allow charitable organizations to raise funds, told Cointelegraph that “charities must keep in touch with their donors all the way through the project, and keep updating them about the new milestones reached” in order to prove that a success story is true, as well as to ensure the work is sustainable. Nazari Fusetti continued:
“Adding financials and proofs of payment definitely helps to create a success story, but only with crypto and blockchain we can aim to give full transparency about the use of funds.”
Davies made an example of the use of decentralized autonomous organization (DAO) structures that purportedly enable social movements to coordinate and operate more effectively at scale:
“We have already seen a growing trend for such movements to take the form of loose networks rather than traditional centralised organizations (e.g. Black Lives Matter, #MeToo, the climate strikes). Often these movements face challenges in terms of maintaining focus and momentum, or carrying out practical action, and the additional structure provided by a DAO might enable them to overcome these challenges but without having to adopt traditional approaches.”
Among other challenges blockchain can purportedly help solve are slow settlement times for transferring funds from philanthropy organizations to beneficiaries and the volatility of contributions made in foreign currency or securities. Although price volatility of digital currencies poses the risk that donations could be worth something different the moment it is needed, it also applies to foreign currency markets.
Last October, Binance released a report on crypto donations to provide relief for west Japan following devastating floods in mid-July, stating it had raised $1.41 million in various types of ERC-20 tokens at the time. Volunteer service provider Open Japan — which received 169.85 ether (ETH) (5.3 million yen, or $47,257, at that time) from Binance — said that “it was carried out instantly, and after confirming the transfer we were able to convert it to Japanese yen. Receiving this donation left us with a deep impression of cryptocurrency: both its growing effect on our world and its potential.”
Digital competence of charities
Bitcoin is currently the leading cryptocurrency in terms of charitable donations. While no exact figure is available for the amount of bitcoin that charities received in 2017, it was certainly in excess of $100 million, eXeBlock’s survey dubbed “Eight Ways Charities are Cashing in on Cryptocurrencies” says, and further adds:
“For U.S. donors, making charitable contributions in cryptocurrency is a good tax planning strategy because if the IRS considers these currencies as property for tax purposes, meaning that upon liquidation, any appreciation of the assets are subject to capital gains tax. However, if the cryptocurrency is donated prior to be being converted to dollars, the donor receives a tax credit equal to the market value of the asset at the time of donation. There is no tax on cryptocurrencies that are converted to cash in a donor advised account. This approach increases the donation size by up to 21%.”
Speaking about major obstacles that stand between a charity and its mission, Nazari Fusetti named fundraising to be the biggest issue for charities nowadays. This is, according to him, why charities are keen to explore new tech opportunities to attract new donors.
Sharing his experience of working with charities, Jorge Mejia, assistant professor of operations and decisions technologies at the Kelley School of Business at IndianaUniversity, told Cointelegraph that charities are “often not led by tech-savvy leaders, but I think they are getting better over time. Particularly, because many charities have realized they need some online presence to tap into the charity crowdfunding market. I think a large gap for charities is obtaining volunteers that want to work on the tech side of things.”
Meanwhile, among 5,352 nongovernmental organizations surveyed, 72% accepted website donations, with only 1% accepting bitcoin, and only 3% had a digital wallet. In the United Kingdom, only 15% of surveyed charities have been through the full digital transformation process and have embedded it, while 45% did not have a digital strategy at all.
In 2018, the survey showed skills to be the second-biggest barrier (51%) for charities, following funding (58%). Over half (53%) reportedly saw their digital strategy skills low, and 55% rated themselves as fair or low at keeping up to date with digital trends.
Notably, 73% of the surveyed charities said that they had low to very low skills in artificial intelligence (AI), which is up from 68% a year earlier. Also, 62% of the survey participants reportedly rated their digital fundraising skills as fair to low, with 58% saying their digital governance skills as fair to low.
Nazari Fusetti argued that “through blockchain we could score a life changing goal for charitable organizations.” However, the general trend shows that charities are reluctant to tech adoption:
“Generally charities are reluctant to tech adoptions but there are some cases, especially with big brands such as UNICEF, which show the opposite. Innovation takes time, skilled employees and financial capital which are limited resources to small charities. Therefore it makes it more difficult for them to embrace new technologies.”
Davies stated that technologies such as augmented reality (AR) and virtual reality (VR) have already entered the charity sector, as these technologies can purportedly be deployed to craft compelling narratives and drive empathy. According to Davies, a number of nonprofits already use AR and VR in their fundraising and awareness-raising.
The key findings from TechTrust’s “Digital Survey 2018” report, which surveyed 1,262 charity organizations, show that in 2017, the majority (58%) of charities did not incorporate digital into their overall strategy, with 14% of those with no IT staff being from large multinational companies.
Of them, 82% reportedly hold sensitive data that is not to be shared and are aware of the General Data Protection Regulation (GDPR). Also, 27% of the surveyed said they would upgrade their IT infrastructure, and only 9% of charities were planning to reduce their spending on IT infrastructure. Of the surveyed charities, 31% did not have applications in the cloud, 9% did not have remote access to their customer relationship management (CRM), and 27% saw benefit in cloud software.
According to the International Fund for Agricultural Development, “transaction costs to send remittances currently exceed $30 billion annually, with fees particularly high to the poorest countries and remote rural areas.” The World Food Program — the food-assistance branch of the United Nations and the largest humanitarian organization fighting hunger — claimed that, through the implementation of blockchain, it managed to reduce fees for international payment transactions, which let the program to save around $150,000 a month.
Mejia argued that philanthropic organizations can strive to record and track their successes and failures using mobile and web apps, and added:
“A charity no longer needs to depend on a small but influential number of donors but can actually reach millions of people through the web. However, I think to be successful online, charities need to document their ability to deliver value. They need to be able to show potential donors that they can truly solve problems for people in need. […] The question is whether they can do it consistently. I have always felt that there is too much distance between donors and charities. For example, if I donate $10 for an emergency relief effort, why can’t I get some assurance that the money was used properly?”
Justin Sun has won an eBay charity auction to have lunch with renowned investor and Berkshire Hathaway CEO Warren Buffett.
Tron (TRX) founder and CEO Justin Sun has won an eBay charity auction to have lunch with renowned investor and Berkshire Hathaway CEO Warren Buffett. The news was revealed in a press release shared with Cointelegraph on June 3.
Sun reportedly bid a record-breaking $4,567,888 to win the charity auction, which has been held by Warren Buffett for the past 20 years.
Bloomberg reports that the winner, who had previously been unnamed, will be able to bring seven friends along for lunch with Buffett at a steakhouse in New York.
All proceeds from the auction benefit the San Francisco-based non-profit GLIDE Foundation. As the press release notes, GLIDE focuses on fighting injustice and inequality on behalf of economically deprived and oppressed communities in need, including the homeless, those from ethnic minorities or of LGBTQ orientation.
Buffett’s wife is reported to have been a GLIDE volunteer before her passing in 2004, since which the investor has upheld his own commitment to the foundation, reportedly raising over $30 million to date in auction proceeds.
In a statement, Sun emphasized the importance of contributing to a foundation whose work provides holistic programs for the local community, noting that:
“BitTorrent and TRON’s US headquarters are in San Francisco, and bidding on this charity auction was a key priority for our team. I’m proud to have my bid donated to GLIDE, a foundation that provides critical support for our local homeless community.”
According to the press release, the auction was hosted in cooperation with the “eBay for Charity” initiative, which enables members of eBay’s online community to support their chosen charities both donate platform-derived proceeds and additional contributions to various causes. The initiative has reportedly raised almost $912 million for nonprofits via the e-commerce community to date.
In her own statement, Karen Hanrahan, CEO and president of GLIDE, underscored that 100% of Sun’s contribution would be used “to help people overcome barriers such as homelessness, addiction, hunger and social isolation and reach their full potential.”
As reported, Sun also recently offered to personally deposit 7,000 BTC to compensate the loss incurred by the major hack of top crypto exchange Binance last month. The offer — alongside other similar offers from industry members such as Coinbase and QKC — was gratefully acknowledged but declined by Binance CEO Changpeng Zhao.
For some in the crypto community, Sun’s charity lunch with Warren Buffett will recall the investor’s much-publicized negative view of decentralized cryptocurrencies. While Buffett is well-known for this scathing stance — memorably characterizing bitcoin as “probably rat poison squared.” He has, however, recently made more positive comments in regard to blockchain.
The Binance Charity Foundation has signed a Memorandum of Understanding with the NGO Safe Future, launching a project focused on education improvements.
BinanceCharity Foundation (BCF), the charity arm of major cryptoexchange Binance, has signed a Memorandum of Understanding (MoU) with Safe Future, a non-governmental organization (NGO) in Uganda focused on local education improvements. Binance announced the development in an official blog post on May 30.
The Binance for Children Special Impact Education Project Uganda reportedly aims to provide a number of new supplies to schools in Uganda, such as solar panels, sanitary pads, school supplies, LED screens, as well as breakfast and lunch for students.
According to the CEO of Safe Future, Mula Anthony, these developments will reach 100,000 students and 160 schools in the region. As shared in an official Twitterpost shared on May 28, Anthony said the project has begun with the installation of lighting kits in two Kampala schools.
As previously reported on Cointelegraph, the BCF previously launched its pilot charity campaign “Lunch for Children” with the stated aim of providing breakfast and lunch to students in Kampala throughout 2019. As per the recent announcement, the project has since expanded to include 10 schools in Kampala and Jinja. The charity arm of Binance reportedly intends to ultimately aid one million students in Africa, in countries such as Rwanda, Kenya, and Ethiopia.
In April, the BCF opened a cryptocurrency donation channel to fund the rebuilding of the Notre Dame cathedral. The program, called “Rebuild Notre-Dame,” had received thousands of dollars via bitcoin (BTC), ether (ETH), and Binance’s internal token Binance Coin (BNB).
Britain’s youngest self-made billionaire pledges more than half his wealth to charity.
The co-founder of crypto derivatives exchange BitMEX, Ben Delo, has joined over 200 other billionaires by pledging to donate the majority of his wealth to charitable causes.
The Giving Pledge, founded by Bill and Malinda Gates along with Warren Buffet, is an initiative for the super-rich to commit more than half their wealth to charitable causes. In December of last year, Coinbase CEO Brian Armstrong became the first crypto entrepreneur to sign the pledge.
BitMEX’s Delo, who is 35, wrote in his pledge in April that he will use his fortune to “safeguard future generations and protect the long-term prospects of humanity.” To this end, Delo seeks to direct his attention — and his finances — to “navigate the challenges and opportunities posed by new technologies in the upcoming century.” He went on to highlight the causes of his concern:
“Our distant ancestors did not possess technology that could cause human extinction. We do. Nuclear security cannot be taken for granted. The prospect of extreme climate change is real. Looking forward, advanced technologies such as artificial intelligence and synthetic biology will pose new and complex challenges.”
Last year, Delo became Britain’s youngest self-made billionaire. Despite his fortune, Delo said he mimics the frugal lifestyles of United States billionaire investor Warren Buffett. After graduating from Worcester College, Oxford in 2005 with a first-class degree in mathematics and computer science, Delo went on to co-found one of the largest crypto exchanges in the world, BitMEX, in 2014.