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Five Steps to Giving for the New Crypto Philanthropist

August 26, 2021 - By

The boom in cryptocurrencies (such as Bitcoin and Ethereum) has not only created new fortunes, but it has also given way to a new segment in the world of philanthropy. Generally younger, tech savvy, and with a higher appetite for disruption, risk, and data, this group may be poised to bring philanthropy in innovative directions and manners.[1] As they start this journey, new philanthropists should consider the why, the what, the how, and the who, as they develop a thoughtful and effective approach to their giving. Rockefeller Philanthropy Advisor’s Philanthropy Roadmap questions offer a great starting point.

  1. Why are you giving?

Understanding the “why” is the first step to crafting a philanthropic strategy. Shortly after the crypto bubble in 2017, the bitcoin-based Pineapple Fund made news by anonymously donating US$55 million worth of bitcoin to 60 nonprofits. The fund’s anonymous founder identified their “why” very broadly, saying: “If you’re ever blessed with crypto fortune, consider supporting what you aspire our world to be :).”

The donor gave to organizations focused on innovative approaches to technology challenges, medical research, poverty alleviation, and conservation efforts.[2] Their “why” was simply based on an aspiration for a better world, and on the realization that their new wealth gave them a platform to advance innovative solutions. You may similarly choose to give away some of your crypto fortune based on your faith, family heritage, or any other reasons.

  1. What do you want to achieve?

Much of the original interest in cryptocurrencies came from a shared belief that the economy needed new technologies to address who benefited from prosperity and growth. A bit of research and a great deal of curiosity are necessary as you work on defining the good you want to achieve in the world now that you are in a position to help others. For instance, you might find it more manageable to start small, by looking in your backyard: can your giving help boost prosperity or reduce poverty in your own community today?  Through this research, you may find that that supporting minority or women entrepreneurs is one approach to achieve this. The issues you discover may end up being central to your philanthropic vision or could serve as a gateway to other meaningful causes.

  1. How do you think change will happen?

Philanthropic giving can often be a bet on how to move the needle on an issue, and crypto investors appreciate the long-term value of a bold investment. You may choose to bring that approach to your giving, investing in ideas and people that may take years to manifest, like making grants to early childhood education that take a generation to realize. Alternatively, you may mobilize massive sums of money, quickly, to provide food and rent relief during a crisis, such as COVID. You may fund research and advocacy to bring attention to an issue that deserves the attention of policy makers and other philanthropists, such as Universal Basic Income, or other social programs. Other decisions to make may include how concentrated you want your efforts to be, and whether you prefer one-time donations, grants, impact investments, or other charitable vehicles to do this.

  1. How will you assess progress?

The complexity of establishing causal linkages may be a familiar story for many crypto enthusiasts, who have watched news and tweets give way to sudden volatility across markets. Indeed, this patience with complexity and resilience of belief may also serve you well when studying the impact of your philanthropic ventures, and the types of data that may best reflect their success. Fortunately, the philanthropy sector has a whole range of evaluation tools (from Process to RCTs) to satisfy your appetite for data and details as you assess the success of your ventures.

  1. Who will join you?

While many crypto donors choose to remain anonymous, others may find a more overt involvement with causes and funded organizations to be an illuminating and humbling journey. Some may choose to work with family members, while others may prefer to go it alone. Still many will seek to openly engage with experts and opinion leaders as they start their philanthropic journey. You may ask yourself:

What role do you want to have in your philanthropic ventures?

Do you have expertise or knowledge you could contribute to your circle of causes?

How public do you want to be?

Bringing the mindset of crypto investing to Philanthropy presents untold opportunities to elevate new causes and approaches, or to bring a fresh pair of eyes to long-standing social challenges. You may find that the practice of giving is not simply a windfall to people less fortunate than you but is instead an effective and thoughtful way to continue building the world you want to see.



Photo by Jeremy Zero on Unsplash


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