A new model of giving, dubbed “crypto philanthropy” by the burgeoning web3 movement, is changing the way donors fund nonprofit work focused on their favorite causes.  

Crypto philanthropy is setting a new precedent in the efficiency and transparency of charitable donations, but the most significant hurdle continues to be a gap in education, both among nonprofits and potential donors. Most 501(c)(3) organizations do not have the resources or technical experience to directly accept cryptocurrency, and the vast majority are unaware of publicly available infrastructure that can be used to simplify the process. Similarly, many holders of digital assets aren’t aware of their ability to donate their crypto or non-fungible tokens (NFTs) to nonprofits, and may not know of the potential tax benefits of giving assets without needing to liquidate them first. 

According to Fidelity, more than one-in-three young investors (35%) currently own some form of cryptocurrency, compared to 13% of all investors. However, only one-third (33%) of crypto holders reported having donated digital assets to nonprofits, and nearly half (46%) of these donors felt it difficult to find charities which directly accepted cryptocurrency donations. 

A new cohort of donors is emerging, with crypto holders eager to donate appreciated assets for social good. Meanwhile, nonprofits are always seeking new approaches to fundraising, and sources of revenue. Endaoment, a 501(c)(3) community foundation built for the crypto community, is designed to bridge this gap and meet these needs.

Just like a traditional community foundation, Endaoment encourages and manages charitable giving, specializing in donations of digital assets. The Endaoment web app accepts over 1,000 tokens in their native form, and hundreds more are accepted over-the-counter. Donating cryptocurrency in its native form could allow donors to offset their capital gains taxes while simultaneously taking a tax deduction*.

Donors may choose to contribute to donor-advised funds (DAFs), community funds, or directly to nonprofits with an industry-low 1.5% fee (.5% when giving into a DAF, and 1% when granting to a nonprofit). This structure showcases a financial incentive for throughput, and challenges the traditional narrative of DAF providers taking quarterly fees based on assets under management, with little incentive for active grantmaking.

Endaoment allows donors to sort based on NTEE code but for those looking to specifically fund vetted social justice nonprofits, we recommend they visit Giving Compass' social justice nonprofit directory.

Once donated, all gifts are liquidated by Endaoment to U.S. dollars and wired directly to the recipient nonprofit’s bank account at no charge to the organization. This levels the playing field for nonprofits, allowing them to benefit from a new asset class and donor base without ever needing to custody or engage with cryptocurrency directly.

This method offers a familiar and approachable introduction to cryptocurrencies for nonprofits. Endaoment is a crypto-native organization, and is working to leverage the advantages of blockchain technology which powers cryptocurrencies towards improved transparency, equity, and scale of impact. 

Simply put, a blockchain is a public ledger of all transactions within a network, giving anyone with sufficient knowledge the ability to view an entity’s activities. This means that all money flowing into Endaoment’s accounts, and all grants distributed to nonprofits are visible on-chain in block explorers like Etherscan, without any personal identifying information.

Just as Decentralized Finance (DeFi) translates traditional banking systems’ control over lending products and money into the hands of everyday users, Endaoment aims to alter the notion that only large nonprofits with multi-million dollar budgets can reap the benefits of new technologies. 

Donors can now utilize any digital asset in service of the causes they care about, knowing that any nonprofit, both small and large, can benefit from these gifts. Together, our community is building an equitable ecosystem of impact which offers a low-barrier of entry for any nonprofit into the world of crypto philanthropy. 

Please consider these next steps for using crypto for social good:

  • Join Endaoment’s community to learn more and interact with other donors and nonprofits in our ecosystem
  • Open a donor-advised fund (DAF)
  • With a crypto wallet,  “deploy” (or onboard) your favorite nonprofit onto the Endaoment platform
  • Email donors@endaoment.org with questions

*Note: Endaoment does not give tax advice. Please consult a tax professional when determining how a gift of crypto could affect your taxes.