Man on A Mission Consulting, gave a presentation at Foundation Center West on cryptocurrency and its benefits for the social sector. In his talk, Bitcoin for Good: Digital Currencies and Blockchain for Nonprofits, Lamb defined and identified cryptocurrencies and blockchain technology. He gave examples of how nonprofits and foundations are currently using these technologies, and he also provided ideas of how social sector organizations which are new to cryptocurrencies 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; and cryptocurrency donations can in most cases be quickly converted into dollars upon receipt. (Note: some nonprofits have experienced challenges with conversion times; however, this depends on the conversion or “wallet” provider.)
- Blockchain, essentially the transparent, secure data platform for cryptocurrency, can also help donors better track the impact of their dollars. There are blockchain systems now in development (e.g., 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 aforementioned, 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.
- We are very much at the forefront of cryptocurrency and blockchain technology. 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.
For more information on cryptocurrency and blockchain technology use in the social sector, check out Lamb’s list of resources here and his recent post on Medium. If you have any experience implementing cryptocurrency or blockchain technology in the social sector, please let us know in the comments below, or tweet at us, @FCSanFrancisco!