Despite being around for a few years now, non-fungible tokens (NFTs) only became a pretty big deal in 2021. Now virtually every industry has the potential for NFT adoption, and these unique new assets are actually a perfect medium for charitable organizations to raise funds in a safe, easy and transparent fashion.
NFT is the acronym for non-fungible token, and it is basically 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 way that is transparent and verifiable to everyone.
Many charities have already benefited from this new technology, but it’s only the beginning. Thanks to the power of smart contracts, NFTs can basically be programmed to act in various ways, such as guaranteeing royalties every time one is sold. This opens up even more powerful avenues and products that charities can tap into for fundraising.
NFTs for charity
Obviously even long before NFTs, charitable auctions weren’t anything new. What makes the blockchain version of these events so powerful, however, is that everything can now be done online and in a decentralized manner. There is far less overhead in terms of setting up such an auction, and thanks to the nature of a decentralized ledger, the funds can have a clear and transparent history of where they end up.
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” collection, named “Ocean Front,” and donated the US$6 million proceeds to the Open Earth Foundation in an effort 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 a great many more examples such as this, and likely even more coming in the near future.
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, which raised money to support the services that companion animals can provide. These events are literally powered by content; videos and images that are spread virally and urge others to take place.
Now, imagine if an NFT was applied to this charitable viral content. With some of this content being viewed millions of times, applying an NFT to these videos or images would enable them to be bought and resold, auctioned, or even have a royalty paid to the charity each time it’s viewed, a potentially more lucrative way to use NFTs to maximize fundraising efforts.
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 song is played. Working in conjunction with artists, businesses, entertainment outlets and more, countless types of content could be generated and monetized, and able to bring in far greater inflows of funding. The possibilities are huge, and have only begun to be explored.
Admittedly, not every cause out there 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 organizations 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.
In general, NFTs are opening the door to new types of fundraising, all while solving some of the issues of the existing systems. Charitable organizations need to continue to take note, as there are so many possibilities that they could take advantage of. Some of the obstacles do still need to be addressed, but there is really no reason any group couldn’t begin leveraging this technology to their advantage today. As soon as leaders in the space become aware, there’s a good chance we’ll see even more auctions like the one we’ve outlined above, not to mention entirely new takes on how to raise funds for charitable causes.