Anonymous Crypto Donors Are Changing Philanthropy

In 2021, crypto users were crowned the most charitable investors on the planet. To those outside of crypto that might not mean much, but after years of reading hypocritical attack pieces from the traditional financial sector, it’s pretty heartwarming to see the world acknowledge that we’re more generous than our critics.

Open Twitter today and you’ll find thousands of people tweeting about their crypto donations to charities. Enter “#CryptoGivingTuesday” in the search bar and you’ll see hundreds of charities thanking crypto and NFT projects donating millions of dollars to make our world more beautiful.

Pat Duffy created The Giving Block with co-founder Alex Wilson in 2018, developing solutions that charities, universities and other nonprofits use to fundraise cryptocurrencies like Bitcoin. You can donate here as part of The Giving Block’s “Bag Season.”

The crypto community understands that these donors (let’s call them Loud Crypto Donors) – with their Twitter Spaces, live streams, NFT drops and partnership announcements – are one of the most powerful forces behind the mainstream adoption of crypto, having won over millions of normies through by plastering their crypto giving initiatives all over the internet.

But these Loud Crypto Donors are only part of the picture. Behind the scenes, Private Crypto Donors are winning the quiet war for donor privacy rights in the nonprofit sector. As someone with a crypto fundraising platform, I want to tell you why this matters…a lot.

Why does donor privacy matter?

Before getting into crypto, I worked in the nonprofit sector. I learned a lot about what makes donors tick. I also learned about a magical concept called “donor stewardship”, using donor data to get donors to give bigger and more often.

If you’ve never worked for a nonprofit you wouldn’t know this, but fundraising costs nonprofits a lot of time, energy and money (and then donors get mad at this expense, calling it “overhead”… but don’t get me started). Donor stewardship is important for nonprofits. Using data to target existing donors is easier than earning new ones, allowing them to spend less time and money fundraising.

Read more: Crypto-Philanthropy Is Here. What Will It Do? – Joe Huston

The more than 1,000 nonprofits I’ve worked with directly have appeared to use this data ethically. Most simply collect it for fear of accepting an ISIS donation unknowingly (though expecting nonprofits to catch ISIS with their donor forms is like expecting Starbucks baristas to catch stolen credit cards before Visa can).

As a result, the nonprofit industry has developed an appetite for your data, collecting it and using “wealth screening” companies (who have become some of the fastest growing companies in the sector) to compare it against growing databases and determine how much money you have.

For a nonprofit trying to fundraising efficiently, these types of services are heaven-sent, helping them grow their budgets and their impact. Today, the majority of great charities don’t accept anonymous gifts since that’s the norm. But if you’re like me, you probably don’t love the idea of the personal information you put in a donation form ending up on server farms designed to “steward” you into being more generous – even if it’s for a great cause. Furthermore, the ability to donate to charities anonymously empowers donors to support an important cause without fear of embarrassment or persecution.

Which brings us to Private Crypto Donors.

The Real-World Impact of Donor Privacy

Although interest in Crypto Philanthropy surged this year, it’s been around for years. Many of us remember the first major wave of Crypto Philanthropy during the 2017-18 bull market, with Ashton Kutcher donating crypto on the Ellen Degeneres Show (back when we still liked her) and a private donor created the Pineapple Fund, giving $55 million in Bitcoin to 60 charities (the Pineapple Fund was our inspiration to start The Giving Block). The Private Crypto Donor behind the Pineapple fund pushed dozens of nonprofits to accept anonymous donations for the first time, many of whom received multi–million dollar donors that transformed their organizations.

Shortly thereafter, I discovered the importance of Private Crypto Donors first hand when an LBGTQ charity we support received its first major crypto gift. It was a lot of money, and the nonprofit was confused about why one of their largest donors wouldn’t want credit for their gift. About a week later, we received a short note from the donor’s Protonmail. He was a closeted gay man and, because we was afraid of having it tied back to him, he had never donated to an LGBTQ charity before. I’m not ashamed to admit that when we first began championing accepting gifts from Private Crypto Donors, I never considered any experience like the one this man was having. I simply felt that donors deserved the opportunity to give without being pestered with mail or putting their personal information at risk. His story was the first of many.

Read more: Crypto: The Gift That Keeps On Giving (to Charity) – Dan Kuhn

Over the years, donor after donor has written to us thanking us for our anonymous option, with their stories opening our eyes to a range of human experiences that are often erased from the philanthropic experience. These Private Crypto Donors are the most passionate philanthropists I’ve had the honor of meeting, from human rights actors fighting against oppressive regimes, to women in Afghanistan who could never get a male guardian to authorize an AFN donation from their bank account (you read that correctly – most women in Afghanistan can’t have their own bank account).

Fast forward to 2021 – crypto prices have hit all-time highs, and millions of crypto investors are learning about the tax advantages of donating crypto for the first time. This has driven millions of dollars into the nonprofit sector from Private Crypto Donors, including perhaps the most famous donation in our platform’s history.

In October, a donor took our Crypto Giving Pledge anonymously before donating $3.5 million ETH to Médecins Sans Frontières/Doctors Without Borders (MSF). The reason this donor wanted anonymity wasn’t quite as emotionally charged as other cases, but it was yet again an interesting human experience. They had made money in crypto – a lot of money – for the first time in their life. To date, they had lived a quiet life and wanted to keep it that way. They weren’t willing to risk sharing their identity with a nonprofit whose marketing team could accidentally toss their gift into their social plan and, with a tweet, change the way their friends and family treated them forever. They came to us, donated anonymously, wrote a beautiful letter about MSF that left our team in tears, then vanished.

Since 2018, we’ve shared the (de-identified) stories of these Private Crypto Donors with the nonprofits we serve. As a result, over 90% of our nonprofits leave the anonymous option on in our widget, despite the fact that any of them can turn it off at any time. As a result, crypto is getting nonprofits into more than just blockchain – it’s getting them into privacy rights, as some of the biggest nonprofit brands are accepting anonymous donations for the first time to take advantage of the crypto trend.

Moral of the story

Though I understand the motivation of nonprofits who mandate donor information, I hope we continue to move toward the normalization of donor privacy. Though data collection is helpful in reducing a charity’s fundraising expenses, nonprofits are creating unnecessary friction by forcing everyone to do so, and boxing out a lot of good human beings who deserve the right to support a great cause without sacrificing their right to privacy.

If you’re a Loud Crypto Donor who’s building big, flashy charitable crypto initiatives – thank you for your service as a crypto adoption warrior. If you’re a Private Crypto Donor, thank you both for your generosity and for your role protecting privacy rights in the nonprofit sector. And if you’re a nonprofit who excludes anonymous giving if your gift acceptance policy, I hope this piece has at least convinced you to keep an open mind.

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