Episode 4 — A conversation with Alyse Killeen, Interim President of BitGive, the first Bitcoin and blockchain non-profit charity, about the rise in crypto philanthropy.

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Chitra Ragavan
Chief Strategy Officer

Alyse Killeen
Interim President

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Trust but verify. That classic journalism adage is being applied with a twist today in the philanthropic space as a growing number of donors are demanding unprecedented levels of transparency and accountability when giving to charitable causes.

This new normal in giving has put non-profit charities under pressure to restore and retain the trust of their funders, a trust that studies show have been deeply eroded due to a number of factors ranging from bureaucracy and inefficiency, inadequate reporting, or in many cases, just plain fraud, theft, and other malfeasance.

This lack of trust is a major hurdle for non-profit foundations today even as their mission has become more complex and their resources scarce.

A 2015 survey by The Chronicle of Philanthropy noted that one in three Americans are skeptical of non-profit charities. And according to the blockchain platform AidCoin, “43% of people don’t trust charities.”

That’s a dismal statistic that many nonprofits are determined to overcome and rebuild trust with the donor community so that they can continue to do good and help those in need.

It’s no surprise then that many of these nonprofits are seeking both new sources of funding and new mechanisms of transparency and accountability to woo donors of all stripes. And so, they are turning to cryptocurrency and its underlying immutable digital ledger or blockchain technology to create a track and trace mechanism for charitable contributions worldwide. According to the Forbes article linked to above, last year, non-profit charities raised an estimated $274 million online in the U.S., “up from $180 million in 2016 and $10 million in 2012 when it first began.”

A growing number of conventional charities, including the American Red Cross, Save the Children, UNICEF and The Water Project, just to name a few, are accepting crypto contributions.

Another exciting development in crypto philanthropy is that numerous cutting-edge blockchain platforms are springing up to leverage blockchain technology to provide donors with real-time traceability of their contributions so that they can actually see how, when, and where their money is being spent.

Last year, one crypto juggernaut CEO got in the game, inspired by The Gates Foundation in the traditional giving space and other examples of philanthropy in the crypto industry, such as Ripple’s pledge of $100 million for philanthropy, and the Pineapple Fund, which has anonymously donated to charity a record 5104 bitcoins (BTC), worth $55 million. Brian Armstrong, CEO of Coinbase, pledged to raise a billion dollars for charity over the next two years, through Coinbase’s non-profit arm, GiveCrypto, starting with a $10 million goal for 2018.

But crypto-philanthropy is by no means a new idea. BitGive, the first Bitcoin and blockchain non-profit charity, is celebrating its fifth year in operation. I invited BitGive’s Interim President and Member of the Board of Advisors, Alyse Killeen to our studio in Venice, California, to talk about crypto for good.

As Founding Partner of StillMark, a venture capital group, Alyse has been a pioneer in funding promising blockchain technology projects and is a respected thought leader in the space. And she’s bringing all that expertise and credibility to bear in crypto-philanthropy.

We had a wide-ranging conversation about how BitGive and other organizations are giving donors the transparency they have long hungered for so that they can determine the real impact, if any, of their charitable contributions, big or small.

We talked about the complexities and challenges of using digital assets to do good, especially in developing nations. Alyse was candid in addressing what she called the “magic bean problem,” arising when charities receiving crypto donations are short-sighted in transferring digital assets to the receiving communities, and as she puts it, “giving for the sake of giving.” Alyse says often, these charities lack a clear idea of the mechanisms that are in place on the ground in underdeveloped economies to convert crypto into local fiat to buy products and services that have real world impact, instead of merely grabbing the headlines.

We talked about whether or not charitable organizations have the expertise and resources available to provide secure and successful deployment of crypto funds. And we discussed the importance of rigorous treasury management practices that are a must in order to buffer against volatility and down market periods like the one we’re in now.

Clearly, groups such as BitGive are poised to provide tremendous value at a key moment in the history of philanthropy because all indications are that crypto donations are on the upswing.

Case in point: According to a CoinDesk article, last February, Fidelity Charitable announced a ten-fold increase in crypto contributions — from seven million dollars in 2015–2016 to $69 million in 2017 — making it “the fastest-growing asset class accepted by the firm.” The article cited Fidelity as saying the contributions came from 169 different donors and grew “140 percent faster than other options, such as real-estate, shares of LLCs and bags of grain.”

That’s just one example. As cryptocurrency gains wider adoption, global crypto-donations are likely to skyrocket as millions of individuals use the power of fractional currency to do exponential good in the world.

It was an inspiring conversation with Alyse, held during the Season of Giving. So be sure to join us!

And be sure to tune in to our podcast next week, when crypto forensic accountant Jeff Neumeister walks us through the intricacies of crypto taxes. I’m sure that’s very much on your mind. How can it not be? It’s January and your taxes are looming!

Topics Covered

  • On BitGive’s fifth anniversary and why this foundation is a milestone in the philanthropic movement.
  • How crypto philanthropy works at the ground level
  • How market movements impact communities’ giving practices
  • What are the trends in crypto philanthropy?
  • How blockchain and cryptocurrency be used to build trust in the giving process
  • Do foundations know how to manage this sophisticated digital asset
  • The importance of treasury management and how it impacts crypto philanthropy
  • How blockchain powered platform like BitGive’s launch of GiveTrack provides real-time tracking of your donations and is a cheaper, faster, more secure way to donate to charity with greater accountability for non-profit charities.
  • What are some of the challenges of crypto philanthropy — both as the giver and as the receiver?
  • Any special tax implications?
  • Are charities embracing this esoteric digital currency as a funding source?
  • Do nonprofits have the technical expertise to track and report and forward the contributions without theft or loss?
  • What are some of the other non-profits in space — early adopters?
  • Frauds or scams? How can charities and donors protect themselves?
  • How should people get started in crypto philanthropy and what are some of the dos and don’ts.
  • Top three takeaways

About Your Host, Chitra Ragavan

A little background about me — I’m the Chief Strategy Officer at Gem, a Los Angeles-based crypto portfolio startup. Prior to Gem, I was Senior Counselor to the CEO of Palantir Technologies. Before entering the software startup world as advisor to CEOs, I was a long-time journalist at WTTW/Public Television in Chicago, National Public Radio (NPR) and U.S. News & World Report Magazine (U.S. News).

My goal is to provide independent and thoughtful analysis of the events and news shaping the industry.

By way of full disclosure, I am a crypto investor. If we ever mention a specific cryptocurrency in the context of a discussion, I will fully disclose my investments, if any, in that currency and expect the same from my guests. I’ll avoid any and all conflicts of interest in the course of these discussions.

You can learn more about me on LinkedIn, my website, or my Instagram.

Enjoy your crypto journey, unicorns!

Chitra Ragavan