How to use Bitcoin to promote social change
The definition of “cypherpunk” is about social change, not gambling
Hi there,
I hope you’re all doing amazing and feeling festive as Thanksgiving approaches. I’m excited to finally share my Human Rights Foundation Nonprofit Bitcoin Guide, with all the practical tools, steps, and answers you’ll need to know if you want to use bitcoin yourself. Today, I’m also going to describe, in detail, even more ways to use cryptocurrency to donate to nonprofits.
On a personal note, I can’t express enough gratitude to artist Jill Blutt, writer and community organizer Leora Schreiber, poet Elad Arnon, and technologist Yotam Bar-On for their contributions to the Matriarch NFT project published via OpenSea. We raised roughly 0.515 ETH ($818 as of October 30, when we started allocating funds) and 0.00519834 BTC ($107 as of October 31), and learned how to support nonprofits with a variety of fintech tools.
Managing crypto assets
We allocated 10% of the proceeds to Jill, who went above and beyond all expectations to incorporate community feedback into her artworks. I granted myself 10% wiggle room (rounding for fees and price fluctuation, etc), so that my portion could cover administrative costs. Whenever possible, we donated bitcoin or ether or NFTs directly. When the nonprofit preferred dollars, I also used an exchange to convert the digital assets into dollars then used a credit card to donate.
Yotam Bar-On distributed one of the remaining NFT portraits (Queen Salome) on October 29, 2022, to At The Well (a nonprofit recommended by community contributor Dalia Katan) using a Rainbow wallet address that I helped the organization set up, then I sent 10% of the fundraised ETH to At The Well’s same Rainbow wallet address.
Bar-On also sent the last remaining NFT, via OpenSea, to a project supporter from the Matriarch’s community Telegram group. In addition to the four sales, this completed the distribution to the project’s core contributors and community.
On November 3, I moved that BTC donation fund and donated it through The Giving Block (a great resource for finding nonprofits that accept bitcoin) to HIAS inc via the address 1D9GfQGnUp2e2Ef2wFbrg89S2H7Hz8VTRF. It would have cost less (in fees) if done directly from cold storage, something I’ll keep in mind for next time.
Acting on community feedback
During the first week of November I sent the remaining ETH to an exchange platform, liquidated it for dollars and used a personal credit card for two donations chosen by the NFT collectors themselves, the National Council for Jewish Women and the Center for Reproductive Rights. This concludes the Matriarch charity experiment, which garnered these actionable insights, if you want to turn digital assets into funding for social good:
Minting on OpenSea makes it very difficult to transfer to a Gnosis Safe (Ethereum wallet), although NFTs minted elsewhere don’t have that issue. Since Gnosis wallets only supports “unsafe transfer,” while OpenSea only uses “safe transfer” options, consider minting elsewhere, if you want people to be able to hold NFTs in a multisig wallet.
The OpenSea auctioneer needs to accept the highest bid before it expires or the NFT won’t automatically transfer. So, the best way to “set and forget” is to list it for sale, not to list it as an auction.
Bitcoiners are unlikely to buy Ethereum NFTs, yet they are willing to donate in BTC to a charity NFT project. NFTs and bitcoin fundraising are not mutually exclusive.
Tax liabilities and transaction fees make it more expensive to donate to charity with crypto than donating dollars. The main benefit garnered is international flexibility, not speed nor convenience.
Final Results
With a personal investment of $1,000 dollars, the group NFT experiment garnered roughly $844 worth of cryptocurrency to donate. It raises the question of whether fundraising this way, rather than simply sending dollars, brought $156 worth of value beyond money to the donation.
I would argue the project offered more than $156 worth of marketing value and awareness for nonprofits (as many people recommended their favorites via group chats, so participants learned about nonprofits that we hadn’t known about before). The NFT project (modestly) increased these nonprofits’ visibility among crypto users, opened new opportunities for the nonprofits themselves via education and training (in the case of At The Well), all in addition to meaningful engagement between donors and other community participants. This experience felt very different than writing a check.
Given that At The Well staff learned (with hands-on, free consulting) how to work with digital assets, and all project participants learned about new tools and opportunities, it’s easy to argue there was $156 worth of social value enabled through this fundraising method and that the lower number than the original investment does not constitute a loss. What do you think?
Learning from bigger DAOs
Although we weren’t able to donate an NFT to ChoiceDAO, due to the OpenSea compatibility issue mentioned above, I think they are a fascinating Ethereum fundraising club focused on reproductive rights. ChoiceDAO co-founder Sahar Afrakhan confirmed our experience that it actually costs a lot of money and labor to set up a DAO; it is not an easy or quick way to attract money.
“Our founding team worked nearly full-time for about a month to set up our DAO's structure, tooling, governance, and community operations. Startup costs weren't prohibitive, but everything came out-of-pocket (we are 100% volunteer run). We paid upfront for tooling and a legal structure. We were able to get free support from our lawyers and processing partners,” Afrakhan said. “We were given office space by a VC firm in Manhattan and spent nights packed into their conference room during the first week.”
ChoiceDAO has dozens of contributors, including eight keyholders, hundreds of people in the group chat and a mutlisig wallet with more than $16,000 worth of cryptocurrency. Here are some recommendations from Afrakhan based on her experience with ChoiceDAO (tips which are also applicable to bitcoin and dollars):
Legal and set up costs are expensive. Fundraising is always a gamble, so do not use funds to set up a DAO if you can’t afford to lose those assets (including lost labor hours).
Accept donations in the form of skilled labor hours (compliance work, marketing, etc), materials, and space.
For keyholder and contributor coordination, try tools like Discord, Slack, Twitter, email, and Telegram (or open source equivalents, if you prefer).
Try platforms like Change and The Giving Block, which make it possible for activist organizations to receive funds in their preferred form (cash or crypto).
While I’m no tech expert, I hope that you’ve come away with a few new tools and ideas to try out when it comes to charitable giving this winter holiday season. I’ll have a ton of magazine and career updates for you all in December. In the meantime, please always feel free to email me your questions or suggestions.
Until next time, take care everybody!