Cyptocurrency donations to charity took a big leap in 2021 | Notes on Nonprofits
I had the pleasure of attending a recent meeting of the Big Bend Chapter of the Association of Fundraising Professionals. It was wonderful to gather again in person to network and discuss trends in giving beyond the personal check.
The speakers were J. Dion Guest, Senior Director of Gift & Estate Planning at the FSU Foundation, who discussed helping donors leave a legacy through a bequest or other gift in their will or estate plan. Liza McFadden, CEO of Liza & Partners, addressed crypto-currency and financial trends in philanthropy.
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I asked Liza to provide more information on these emerging strategies to help philanthropists, foundations, governments, and nonprofits work together to meet community needs.
Crypto and other trends
Following the money is a sport in philanthropy, and one that changes constantly. Perhaps the most obvious trends are the impact of crypto donors, and the proliferation of nonprofits accepting the donations.
Jamie Dimond, CEO of JP Morgan, once famously described cryptocurrency as “a fraud” and “worse than tulip bulbs”, but there is no denying the influence when almost 10% of Americans own some cryptocurrency!
Giving Block, one of the organizations that helps nonprofits to accept cryptocurrency, shared that more than $70 million was donated via its platform to nonprofits last year.
Larger nonprofits like Susan B. Komen, best known for their “Race for Cure” make crypto giving simple via a drop-down menu listing the types of cryptocurrencies they accept.
Public related investments
Another financial trend is the growth of public related investments, aka PRI. A number of large foundations provide PRIs which are mission or social investments that foundations make to nonprofit or for-profit entities with an expectation of repayment but at a very modest rate of return.
PRIs can be issued to support affordable housing, historic preservation, economic development including entrepreneurship and micro-businesses, charter schools, health clinics, and so much more.
As an education advocate, one of my favorites is the Lumina Foundation which describes their impact investing strategy as “advancing racial equity and making opportunities for learning beyond high school available to all.” Talk about driving money strategically for good!
Social impact bonds
One more slowly moving trend is the use of social impact bonds. They are quite a bit trickier to implement. On the front end, it's pretty simple: investors come together to solve some type of social problem, and if outcomes are met, a governmental entity agrees to pay back investors at a small rate of interest in return for designing a program that has a deep return on investment for the community.
Let’s use housing the homeless, which is a critical issue, as an example. In Anchorage, Alaska, the program, Home for Good, launched in July 2019 to serve Anchorage residents with persistent homelessness and significant mental health challenges.
The outcomes for success? Real, exact measures on the reduction of use of emergency medical services by the homeless, true measures on the coordination between providers and more.
With investors looking over the shoulders of the providers, this interaction of business acumen, philanthropic heart, and government focusing its money on the most vulnerable citizens, creates an interesting triangulation of drivers for success.
I once heard a lovely expression, “I’d rather wear flowers in my hair, than diamonds on my neck.” So, Jamie Diamond (all puns intended), I’ll not bicker on the volatility or capricious nature of cryptocurrency, but I do hope some of those errant funds help the philanthropic world.
Mark your calendar for May 19 for a networking event hosted by the AFP Big Bend Chapter from 4:30 to 6:30 p.m. at Island Wing.
Liza McFadden is an executive advisor to philanthropists and CEOs; she serves on numerous boards including the Children’s Services Council, The Village Square, Boy Scouts (Suwanee River Council) and Florida State Parks Foundation. She can be reached at lizamcfadden@lizapartners.com. Notes on Nonprofits is published by Alyce Lee Stansbury, CFRE, President of Stansbury Consulting. Send your comments and questions to notesonnonprofits@gmail.com
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This article originally appeared on Tallahassee Democrat: Nonprofits: Cryptocurrency donations and other trends in philanthropy
