Bitcoin for Good
Have you ever wondered how cryptocurrencies might be leveraged in the social sector and how your organization could benefit from them? Man on A Mission Consulting presented at Foundation Center West on just this, cryptocurrency and its benefits for the social sector. In his talk, Bitcoin for Good: Digital Currencies and Blockchain for Nonprofits, Paul Lamb discussed how nonprofits and foundations are currently using cryptocurrencies, and how social sector organizations might start adopting them.
Here are our top five takeaways from Lamb’s talk:
- Because cryptocurrencies are independent from financial institutions, donations are more immediately processed and available for nonprofits’ use. Cryptocurrency donations can, in most cases, be quickly converted into dollars upon receipt. Some nonprofits have experienced challenges with conversion times; however, this depends on the conversion or “wallet” provider.
- Blockchain, which is used to secure cryptocurrencies, can also help donors better track the impact of their dollars and increase transparency. There are blockchain systems now in development (i.e., Givetrack.org) which allow a bitcoin donor to see in real time how the nonprofit is spending their donation. This will help donors see how their dollars are used, and help nonprofits with reporting.
- A few foundations and funds, such as the Silicon Valley Community Foundation and the Fidelity Charitable Giving program, are using cryptocurrency to make grants. As with donations , if grants are given in cryptocurrency, they can more quickly be converted into dollars for the nonprofit to use.
- Cryptocurrency is birthing a new type of donorship, and has already given rise to a new kind of donor-advised fund. The Pineapple Fund is an anonymous donor organization that has already allocated $56 million to various charities. In the future, we may see types of Distributed Autonomous Organizations (DAO) that operate cloud-based tokenized donation and charity management systems. Through a DAO, donors could vote on where donations are made and even drive the development of independent projects based on majority token rule.
- This is new, uncharted territory, not just for the social sector, but for society as a whole. There are many lessons to learn about how best to use these technologies, and many discoveries to uncover about how they may impact the social sector.
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