Video Q&A: Trends in cryptocurrency fundraising

- Hello, I'm MJ Bobyock from SEI Investments. SEI is an outsource chief investment officer. And we work with many nonprofits to help bring them investment and other solutions to their endeavors in nonprofit work. Today, we have with us Scott Holdman who is the chief transformational officer at the Impact Foundation in Fargo, North Dakota. The Impact Foundation serves charities and donors in the community at large by helping with coaching and training to help them achieve their greatest impact. And we also have Heather Bennett who's the vice president of partnerships and philanthropy at Direct Relief foundation. Direct Relief is a charity in Santa Barbara that helps the community that is encountering hardships from disasters. So we're gonna have two experts today talking with us about the use of cryptocurrency in donations. We've seen an increasing trend. According to the August 2021 Momentive Poll last year, we have one in 10 people in the US already investing in cryptocurrency. So we're seeing this increased use like stock donations of using cryptocurrency in the fundraising space. We're gonna start with Scott and just talk in general about crypto in fundraising and what he is seeing there. And then we'll jump to Heather and get some more detail on what Direct Relief has done.

- Yeah, cryptocurrency is one of the best tools that we can use for prospecting and cultivating relationships, particularly with millennial and gen Z donors. Although it is not just them, it is a growing demographic and it's a difficult one for fundraising. And so this tool, which is no longer a could-be, it is now here. It has been here for several years. And although it may seem like it was overnight, it's been building to this point that it is really ubiquitous. And so this is an opportunity. It's not anything to be scared of. Most organizations are moving towards accepting cryptocurrency. There are intermediaries to help you. And also as a trend, most donors are using them. Almost every single large donor-advised fund organization now accepts crypto. So it's definitely a trend that we need to be paying attention to, MJ.

- We used The Giving Block, their 2021 annual report for a number of interesting stats. The per capita annual income for crypto users is over $100,000, about $111,000, which is a significant amount in terms of fundraising efforts. The average age, to your point Scott, of the crypto donor is 38 versus 64 for the average donor, just in general in the nonprofit sector. And about 45% of crypto donors donate at least a thousand dollars to charities each year versus only about a third of the average public that donates about a thousand dollars a year online. So we see significant increase in the denominator, as well as the numerator if you will. Heather, what led you down the path to wanna start accepting cryptocurrency donations at Direct Relief? And when did you formally begin the process?

- Yeah, thank you. That's a great question. We started accepting cryptocurrency in 2015 following the Nepal earthquake. It was a devastating emergency situation and people were reaching out to Direct Relief to see how they could support the response effort. Cryptocurrency came up as an alternative where people just wanted to give in a method that made sense to them. So we see donations of cryptocurrency no different than stock or real estate or any other types of assets. We really just began accepting it in 2015 and it's grown ever since.

- Did you find it hard to educate yourself and the board on the process?

- At first, to Scott's point, it's a little bit terrifying of the unknown. And so for us, there was a lot of literature, some webinars that we just got up to speed on. And we didn't take the position where we had to become experts in the technology aspects of cryptocurrency, or really understand how it works. We've been able to use an intermediary through The Giving Block to be able to help understand the charitable giving side of cryptocurrency. So for us, it was more of a donor experience and making it a flexible method for people to donate, versus really understanding the ins and outs of crypto.

- Interesting. According to a study, 49% of millennials own crypto. Have you been able to build your donor base in that size segment, or that age segment of the donors?

- Yeah, we've been able to really look at younger philanthropists, the millennials, peoples in their twenties and thirties as part of a broader digital strategy. We do a lot of video game streaming on Twitch and YouTube. And this is an aspect to reach that population, and it's been very successful.

- Interesting. I read in The Giving Block that the average crypto donation is about $10,500, versus one-hundredth of that with the average online donation. Has this been a fruitful endeavor for Direct Relief? Have you seen the level of donations you expect increase?

- Yeah, we've seen since we've been accepting crypto in 2015 we've definitely seen an increase in the number and the dollar amount of the donations. Again, for us, this is still a new space. We're still figuring it out. We do work with The Giving Block as an intermediary to really understand the landscape and to see how we can really move forward more in the digital space.

- Do you see anything changing in the future, different trends that you would project?

- Yeah, I don't know if it's as much as a trend in terms of just all the different varieties of cryptocurrency. And then moving into NFTs, the non-fungible tokens, I think that's a space where we're starting to see a lot of uptick around especially people creating NFTs to benefit charities. So we're working in that space and we're looking at some growth in that area.

- Scott, how about some other trends we're seeing across the fundraising landscape? What are you seeing more generally?

- Yeah, well, and just on the note of cryptocurrency, I mean, it's reached a sustained valuation of over $2 trillion last year. So just to put that in a perspective, that's a major trend. But the trends that we're seeing just broad-based in fundraising is, again, really an increase in personalization and segmentation. As our tools with technology get more sophisticated, we got different ways of giving. What we've seen is really greater personalization and segmentation of your donors. And so this is one of those avenues that creates a really great personalized pathway for giving for your donors.

- Well, thank you, Scott, thank you, Heather, for joining us today. That was some great insights into the use of cryptocurrency and the way it broadens your donor base and donor experience in the nonprofit landscape. Thanks everyone for joining us.

- Thank you.

- Thanks MJ.