Words: DALAL ALSHARHAN
Photography: MAISOON AL SALEH, THE FIRST ARABS
Crypto philanthropy is on the rise as nonprofits look to tap into new donors. But will it catch on in the Gulf?
A growing list of international charities are turning to cryptocurrencies and NFTs to reach new donors, find alternative funding sources, and explore faster and more cost-effective ways to raise and disburse money. Save the Children, WaterAid, and CARE are just some of the nonprofits raising millions of dollars through crypto to respond to a range of crises, from conflict in Afghanistan and Ukraine, to drought in Somalia, and extreme weather events in the United States.
According to The Giving Block, a US-based crypto platform, half of Forbes’ Top 100 Charities now regularly fundraise using crypto and artworks in the form of NFTs (non-fungible tokens), and within the next decade, total crypto donations are tipped to exceed US$10 billion.
Transparency and immutability, lower transaction costs, and the ability to cross borders more easily have all played a part in the growing popularity of crypto donations. It is also a way for charities to connect with new donors.
The Giving Block says there are currently 300 million active users in the crypto market with an average age of 38 years – compared to regular charitable donors who are typically in their sixties.
Crypto donors also give more. According to Fidelity Charitable, a US-based Donor Advised Fund (DAF) provider, the average crypto donation last year was nearly 31 times larger than the average online gift ($204).
In parts of the Gulf, the crypto scene is booming. Dubai alone is now reported to be home to more than 700 crypto companies and the governments of the UAE and Saudi Arabia are proactively working to create a supportive regulatory environment.
In early June 2023, Bybit, the world’s third largest crypto exchange, which recently moved their headquarters to Dubai, donated Dhs1m ($272,000) to the American University of Sharjah for a scholarship fund to support computer science and engineering students get into fintech and blockchain.
Yet regional interest in crypto philanthropy remains muted.
YallaGive is the first blockchain-enabled crowdfunding platform operating in the MENA region, and to-date it has raised closed to $19m from the hosting of 5,000 charitable appeals. It is currently exploring the possibility of accepting crypto donations, according to head of strategy, Nabil Boubker.
“The potential for making donations through cryptocurrencies is immense, as it provides unique opportunities in the realm of fundraising and financial transactions,” he tells Philanthropy Age.
Cryptocurrencies, he says, due to their “decentralised and secure” nature can “provide a means for individuals and organisations to engage in borderless, peer-to-peer transactions with reduced fees and increased transparency”.
In 2022, Al Jalila Foundation became the UAE’s first healthcare charity to accept crypto donations, which has so far included $16 million in tokens from the founders of Quint, a UAE-based Decentralised Finance (DeFi) firm, to establish the Quint Bone Marrow Transplant Centre at the Hamdan Bin Rashid Cancer Charity Hospital in Dubai.
Indeed, for all the enthusiasm about crypto philanthropy, and its great potential to tap into new donors, it is not risk-free. One issue is the volatility of cryptocurrencies, which are not regulated by central banks.
Nonprofits, which already face a myriad of compliance challenges, feel understandably wary about engaging with these funds and potentially exposing themselves to reputational and financial risk.
“Cryptocurrencies, despite their advantages, are relatively new and can be subject to volatility and regulatory uncertainties,” explains Boubker from YallaGive, who says it is crucial that proper safeguards and regulatory frameworks are put in place to “harness the full potential”. Greater awareness through education about how to use cryptocurrencies to donate and fundraise will also be key, he adds.
There is also the environmental footprint to consider. Some NGOs have rejected crypto donations altogether as contradictory to their mission due to the impact crypto mining has on the environment.
Despite these concerns, Pat Duffy, co-founder of The Giving Block, remains confident in the future of crypto and how it can enable philanthropy. “Uncertainty like this is nothing new for crypto,” he writes in an article for CoinDesk, and he believes that the sector had not just weathered the storm following the FTX collapse, but in fact “thrived”.
“We all know the cycle: every few years, crypto is declared dead as prices drop… But there’s one area of the crypto ecosystem that continues to grow strongly, despite the ups and downs in asset prices: philanthropy. (And) through rain, sleet and SBF, nonprofits continue to march uphill to fundraise crypto,” he notes. – PA
A longer version of this article was originally published by Philanthropy Age and has been reproduced with permission.
Original link: English or Arabic
en
ar
 (1).png)
