A New Way to Get Crypto Gifts
Mega-donations of cryptocurrencies continue to grab headlines — but many nonprofits are still uneasy or unsure about how to get in on the action.
Now a new nonprofit giving platform is making it as easy as accepting a gift from a donor-advised fund. Endaoment sponsors DAFs built on the Ethereum blockchain, the world’s most actively used platform supporting smart contracts, a program that automatically completes a transaction when pre-agreed criteria are met. The idea is to create an easy way for people to give cryptocurrency without the hassle of selling it first and for U.S. nonprofits to accept it as cash.
The idea is the brainchild of 30-year-old Robbie Heeger. In 2016, he and his brother created a donor-advised fund at the San Francisco Jewish Community Federation and Endowment Fund. At the time, Heeger was working at Apple and got in the habit of making regular contributions of the company’s stock to the DAF.
Several years before, he had begun dabbling in digital currencies, making investments here and there. When Heeger left Apple at the end of 2018, he no longer had the same supply line of company stock to fund the DAF. More of his assets were in cryptocurrencies.
When he approached the federation in mid-2019 about making a gift of some lesser-known crypto coins, “they kind of looked at me with this 100-yard stare,” he says. “We really want this gift but don’t know how to handle it,” he recalls the federation’s staff telling him.
At that point, something clicked for Heeger, who had been learning to code. He got back to his federation contacts with a proposal: “What if I approached you with software that allows you to take the gift?” They said, “If you can bring us the software, we can help you to make it happen.”
Joy Sisisky, the federation’s chief philanthropy officer, wanted to make it happen, she says. “Instead of saying, ‘No, we can’t,’ we said, ‘Great. Let’s figure this out together.'”
The software Heeger built allowed him to make a gift of cryptocurrency and convert it to cash that the federation could easily accept. Even charities that were once wary of accepting digital currencies say that finding a way to accept them has the added perk of helping them appeal to young male donors who tend to use cryptocurrency but are elusive as supporters for many nonprofits.
Heeger also saw how blockchain technology could disrupt some commonly cited complaints about DAFs. For instance, fund sponsors benefit financially the longer a donor keeps money in a DAF rather than sending it to charity. And there’s a lack of transparency about how much wealth flows into and out of the funds. Heeger launched a pilot in February 2020 that worked not just to make it easy for donors and charities to transfer cryptocurrencies but also to provide more of a window into the money flowing into and out of DAFs.
Since then, donors have contributed more than $2.5 million to Endaoment funds and have distributed more than $1.8 million to nonprofits. Heeger hopes this is just the beginning.
“We want to demystify the process of accepting a crypto gift,” he says. “We want to see money flowing from crypto into the hands of organizations that need it.”
Endaoment joins an array of third-party entities springing up to help nonprofits accept these gifts. Groups like the Giving Block, Every.org, Engiven, and BBB Wise Giving Alliance’s GiveSafely platform all facilitate the transfer of cryptocurrencies to charity coffers. Those firms, as well as many major DAF-sponsoring organizations, tend to accept only a handful of the most popular cryptocurrencies, like Bitcoin, while Endaoment accepts around 150 types of coins.
Endaoment has also launched pooled “community funds” that enable owners of specific digital tokens to support nonprofits collectively and vote on who receives those funds. (The name Endaoment is a play on decentralized autonomous organization, or DAO, a crypto-based organizational model that aims to democratize decision making among its members.)
Read more about how Endaoment works — and how nonprofit fundraisers are responding to gifts of digital currencies and talking about this form of giving with donors.