2022 wasn’t the best year for crypto. At least not in terms of downward trends in prices, news coverage and general public perception. For all intents and purposes, it seemed like the industry was on shaky ground and uncertainty was in the air. But that’s all part of the cycle, except where crypto philanthropy is concerned. This is one area in which the crypto ecosystem continues to boom.
The 2022 Forbes 30 Under 30 list turned the spotlight on Giving Block co-founders Pat Duffy and Alex Wilson. The founders started the Shift4 company crypto philanthropy platform in 2018. The platform has attracted numerous nonprofits over the past few years. According to reports, the average nonprofit on the platform raised $26,000 through soliciting crypto gifts in 2022 alone. Some nonprofits on the platform raise millions of dollars for philanthropic initiatives.
According to Duffy, tax incentives to choose crypto instead of cash are one of the major reasons donors are continuing to support nonprofits offering crypto options to their benefactors. For the second year running, there have been more ‘donate crypto’ than ‘donate stocks’ Google searches. This is down to the fact that an increasing number of crypto users are becoming more aware of asset-giving strategies. Learn how to use your crypto assets with the help from our cryptocurrency guides.
Whether another reason for the continued boom in crypto philanthropy is down to crypto continuing to be one of the decade’s top-performing assets or the largely digital native user base remains to be seen. Whatever the reason, more donors are donating crypto than stocks online. Leaving crypto philanthropy untouched by last year’s pummeling of the industry. Half of the Forbes Top 100 Charities raise funds through crypto and non-fungible tokens (NFT). The result is that the nonprofit sector has become a leading industry in the adoption of crypto.
Duffy explained that it’s possible to measure if changes in crypto giving are outperforming or underperforming the whole crypto market. The Crypto Philanthropy Index (CPAI) makes this measurement possible. The index compares the total amount of crypto donated via the Giving Block to the average bitcoin (BTC) price over time.
Duffy found that crypto philanthropy has outperformed crypto markets every year since they started tracking it in 2020. 2022 saw a 41% increase in crypto donations compared to 2021. Crypto donors gave a collective $172 per every dollar in bitcoin’s market value.
By combining historical donation data from the Giving Block with several years of bitcoin price data, Duffy can predict the growth of crypto philanthropy over the next decade. Given that most experts expect the crypto market cap to rise over time, he predicts that crypto philanthropy will continue to increase.
Using bitcoin price data from the last five years and CPAI data from the last three years, he forecast that charitable crypto giving will channel as much as $10 billion to nonprofits by November 2032. And that’s only through the Giving Block. In today’s terms, crypto would account for approximately 2% of all charitable giving in the U.S.
Duffy explained that this year offers opportunities to bring together the biggest players in crypto and in the charitable sector. Together, they’re paving the way for more empowered nonprofits and greater acceptance of crypto around the world.
