Giving Compass' Take:
- Chloé Meley explains how the ultra-wealthy are supporting nonprofits through NFTs, but are worsening existing inequities in philanthropy in doing so.
- What role can you play in addressing inequality in philanthropy?
- Learn more about inequity in philanthropy.
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The first ever Tweet, published on 21 March 2006, was “just setting up my twttr”. Fifteen years later, in March 2021, this piece of internet paraphernalia with no apparent value sold for almost three million dollars.
The buyer, Malaysian businessman Sina Estavi, now owns this intangible relic of the early days of social media as an NFT (non-fungible token): a unique digital certificate of ownership that represents objects like memes, songs, artworks, and more. NFTs are bought and sold on digital marketplaces with all kinds of cryptocurrencies and are stored on a list of recorded digital transactions known as a blockchain. They cannot be duplicated, and derive their value from their rarity, essentially acting as a collector’s item.
Following in the footsteps of their tangible artwork counterparts sold at auction, these digital tokens are increasingly used in charitable giving. Twitter CEO Jack Dorsey donated the proceeds of the NFT sale to Estavi to GiveDirectly, a non-profit organisation that sends money to people across the world living in poverty. And he’s not the first to leverage this new technology for philanthropic purposes.
In the past few months, celebrities, artists, and other wealthy donors have taken part in the NFT boom to support good causes, either by donating the proceeds of NFT auctions – which come in crypto format, rather than regular currency – to charities, or gifting NFTs directly to nonprofits. Lindsey Lohan donated the proceeds of her NFT sale to Save the Children, while digital artist Mike Winkelmann auctioned off a piece worth $6 million for the Open Earth Foundation.
This surge in the use of NFTs in fundraising is raising questions about how this new technology is fuelling existing issues associated with philanthropy, which has been proven to benefit the wealthy through tax deductions, shape policy priorities to reflect the interests of a small powerful group, and focus disproportionately on the symptoms rather than the causes of societal issues.
Read the full article about NFT philanthropy and inequity by Chloé Meley at Huck Magazine.