Running with Unicorns, a Crypto Podcast by Gem
Running with Unicorns, a Crypto Podcast by Gem

Running with Unicorns Ep. 4

Crypto Philanthropy Packs a Punch / Alyse Killeen, BitGive

January 3, 2019

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

“I think when done right, [the best part about crypto philanthropy] is that transparency is used to catalyze excitement for giving and catalyze a connection between the donor and then those affected by their donations.”

– Alyse Killeen, Interim President, BitGive

In This Episode
BitGive Interim President, Alyse Killeen joins us today to talk about how non-profit charities are increasingly accepting cryptocurrency as donations, and how these digital assets are revolutionizing global philanthropy. She describes how the process works and why blockchain technology and cryptocurrency are an important way to increase transparency in tracking how foundations are using your donation. Alyse talks about the birth and growth of BitGive, the first Bitcoin and blockchain non-profit charity, which just celebrated its fifth anniversary. She describes some of the complexities of donating crypto assets, both for givers and receivers and the “magic bean” challenges foundations confront in converting these contributions into something that’s truly useful to those in need.

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

Guest Contact Information
Alyse Killeen
Founding Partner, StillMark Co.
Interim President, BitGive
Website | LinkedIn | Twitter

Questions and Comments
podcast@gem.co

🎙️Would you like to be a guest on our podcast?

Send us a booking request.

Chitra: Hello and welcome to Running with Unicorns, your portal to all things crypto. I’m Chitra Ragavan, Chief Strategy Officer here at Gem. We hear a lot about the dark side of cryptocurrency. Well today we’re going to talk about crypto for good – how to donate cryptocurrency to help those in need. It’s an important thing to think about as you’re mapping out your 2019 charitable contributions. Joining me is Alyse Killeen, she’s founding partner at StillMark, a venture capital group dedicated to blockchain and cryptocurrency projects. And she’s interim president at BitGive, the first bitcoin and blockchain nonprofit charity.

Chitra: Alyse, welcome to the program.

Alyse: Thank you for having me.

Chitra: It’s great to have you – tell us a little about yourself and how you got involved in blockchain and cryptocurrency and then also how you got involved with BitGive.

Alyse: Sure, so my background is in research and stats – so I came from an academic background. From there, I was a PhD drop-out, and dropped out to get into venture capital. I worked at two large venture funds in Los Angeles and was focused on enterprise technology and infrastructure tech. So in 2013 when I discovered Bitcoin, I discovered it as a new form of infrastructure technology. I really became passionate about the simplicity and the beauty of the technology itself and then also it’s very apparent application in both developing and developed markets. So I decided to become a VC that was focused on Bitcoin technology and blockchain technology specifically.

Chitra: And then how did you come across BitGive?

Alyse: Sure – so Connie Gallippi – who is the founder and Executive Director of BitGive – was very early in the space. She came into the Bitcoin space and ideated on her participation and developed BitGive as something that was really catalyzed by the San Jose conference in 2012 and so, as some of the first executive women in the space, we were quick friends. So I’ve known Connie since 2013 probably within the first couple months of really being present in the ecosystem and have been formally working with her and BitGive for the past 5 years as a member of the board of directors.

Chitra: There was a recent article in Blockchain Beach about charitable crypto philanthropy and they quoted one of the other nonprofit organizations for cryptocurrency as saying that 43% of the public does not trust charitable giving to nonprofits, so that seems like a really significant statistic so it would really seem that if you have all of these transactions on the blockchain and there is complete transparency and immutability of these transactions that’s being recorded that perhaps that might result in greater trust and confidence in the system.

Alyse: That’s what we’re hoping. And that’s why Connie has been focused on Bitcoin specifically as a transparent and a uniquely immutable ledger and so what BitGive aims to do is to recognize opportunities in the technology as they apply to nonprofits to introduce both the technology and best practices for processes set to the nonprofits. So really BitGive’s work is introducing a global network of nonprofits to Bitcoin and to technology that can make their work both impactful and more efficient.

Chitra: Now, BitGive is the first nonprofit charity for Bitcoin and blockchain now in it’s 5th anniversary. But now there are a lot of other organizations that accept cryptocurrency as charitable contributions.

Alyse: Yes that’s right and that’s one of the most exciting pieces of historical work that BitGive has done. So our first campaign which proceeded my time at BitGive was a fundraise for save the children in response to a typhoon event in the Philippines. So we were raising money for a children’s relief fund. At that time 2013 save the children could only accept donations in fiat currency. So though BitGive explained the technology to save the children and raised the money and resources in Bitcoin we had to convert to USD prior to giving to save the children. So just the year after that, prior to 2014, save the children introduced an opportunity now for folks to donate in Bitcoin directly. And so one of the organizations and one of the worlds largest nonprofits that BitGive was able to introduced to the technology of Bitcoin.

Chitra: So how does it actually work if I want to donate some cryptocurrency to a charity how does the process work? Is it just like any other form of contribution?

Alyse: Sure so – today what you’re able to do is go to the GiveTrack website and GiveTrack will introduce the projects that we’re working on currently. Right now there’s 4 listed, and you can do a deep dive on the project prior to donating. So you’ll be able to click on the project, understand who both the owners of the project and the organization are, understand the milestones, and then have transparency on how much that fundraising project has attained. So an example would be – one of our projects now is a project called run for water that’s an organization based in Canada but active in Ethiopia and introducing water access in areas that are otherwise challenged in that way. You could log on, research the project owner which is Melissa Quinn, also a Canadian working at a nonprofit called Left, and really be able to access information that might be relevant to your decision to donate all through the BitGive platform. Then if you were to donate you could do so directly through the platform and continue to track your dollars at work.

Chitra: I see and so it’s a pretty simple process.

Alyse: It’s a pretty simple process. The aim of BitGive is that it continues to get easier as the infrastructure that enables nonprofit giving through cryptocurrency matures. So there are friction points of course. The technology, the hard infrastructure is still maturing and developing and then the soft infrastructure – the people on the ground. The ability to create liquidity from Bitcoin to a local fiat currency where you’re giving your Bitcoin is still important and an opportunity for advancement. And so, BitGive tracks that and reports back to the community and through our relationships with both our formal and informal partners in the cryptocurrency community really what’s missing and what could still be developed to help bitcoin really have a broader global reach – including in the least developed communities across the globe. So places where people are unbanked – not just underbanked – where even having access to any sort of modern institution would be uncommon, it’s important for us to build both hard and soft infrastructure to use cryptocurrency in those places too.

Chitra: So when you say hard infrastructure and soft infrastructure what do you mean by that?

Alyse: So by hard infrastructure really I just mean core protocol infrastructures and then the adjacencies to that. So things like secure wallets or wallets that can be used on a flip phone vs an iPhone. For instance one of the technology advancements that has happened over the lifespan of BitGive that was important for BitGive and something that it was able to introduce to it’s nonprofit partners is multi-signature wallets, which allows for the nonprofit to put a business process in place and a logic in place that creates, that replicates and advances systems they would’ve already used to secure or to assure that funds are moved securely and in a trustful and purposeful way. There will be other advancements similar to that, that will allow for other nonprofits to have an easier implementation of the technology, something that replicates more closely what people are already doing – and then advances on efficiencies. And then soft infrastructure I refer to as the ability for folks to actually directly use cryptocurrency rather than needing to exchange it. And or the ability for people to more easily access liquidity in their community. So for instance to give bitcoin to a family in Venezuela – to give cryptocurrency to a family that doesn’t have access to traditional institutions and that is in dire need, is almost like giving them magic beans. So folks need support to be able to access resources for livelihood – so giving them something that they can’t exchange for those resources is perhaps more self indulgent than BitGive wants to be. So what BitGive wants to ensure is that giving people cryptocurrency, they can use it in the very near term for the resources that their family needs to survive and thrive. Whether that be for food resources or water or for resources that can help them expand on their own ability to produce traditional revenue.

Chitra: But how do you do that – if I give cryptocurrency to a foundation, do you then give that same cryptocurrency to that family or do you convert it into the local currency and then give them the equivalent?

Alyse: BitGive empowers the nonprofits working in the local space to make those decisions, which is why BitGive works as a foundation rather than projects that BitGive directly manages themself. So for instance, BitGive now on the GiveTrack platform now has two projects that are live in Chile. Both of those projects are managed by local Chilean nonprofits. So BitGive will distribute Bitcoin funds on the Bitcoin blockchain of course to those nonprofits and then those nonprofits will choose how to distribute those funds in a way to access resources that were declared for the project. For instance, one of the projects is to acquire athletic gear for disadvantaged and lower socio-economic status children in Chile – and the idea of that is it catalyzes confidence and connection to a community and helps build more empowered members of the community in the going forward. Now in that local community one can’t acquire a soccer ball or a playing space through an exchange of bitcoin – hopefully in the future it will be the case that there can be those direct purchases made. But the local nonprofit will need to find liquidity exchange bitcoin for the local currency and then make a purchase in that way. So that’s an example of where infrastructure can still be built, both hard infrastructure and soft infrastructure that creates greater efficiency – does that make sense?

Chitra: It sounds very complicated – so is it even worth the hassle at this point? Given how complicated cryptocurrency is, and it takes a certain level of sophistication to understand it so… is there a lot that’s being lost in the translation here? I mean, by the time it gets to that local level? And where does the money go? It just seems very overwhelming.

Alyse: I think that’s one of the reasons why BitGive has spent time focusing on smaller nonprofits, and folks that themselves are in startup mode and are excited to build. What BitGive found is that nonprofits and team members have been really excited to use the technology and it creates a more efficient experience in so many ways – and in meaningful ways that move the needle for nonprofits. For instance, the transfer of funds can happen much more quickly and it also happens with a lower fee burden, so that in and of itself moves the needle for these nonprofits. Instead of in more remote areas having to pay a 15-30% fee on a transfer of funds, they’re just paying the transaction fees on the Bitcoin blockchain which would save them the vast majority of those fees, but also to be able to accept a transfer upon a completion of a fundraising campaign after a day at the longest. It could be an instantaneous transfer and generally speaking it saves a week or more than that for the non-profit, so I think those are things that folks who are operating especially small nonprofits or those responding to acute disaster are worried about in their day to day management, and then finding liquidity is something that BitGive helps them with. So prior to launching a campaign or choosing a partner, Connie and the team are really considering what resources are locally available for folks to actually use Bitcoin or to be able to find liquidities.

Chitra: So they’ll convert it into the local currency.

Alyse: That’s right and the onboarding to multi-signature wallets or the processes necessary to use the technology is all done in advance by BitGive.

Chitra: I see. So you actually find that this is something that is working? It just seems like there are a lot of obstacles and frictions to succeeding.

Alyse: Sure and that may be, I hope it’s not in the way that I’m describing it. I think the friction points to succeeding are really twofold right now. One is that with market volatility, donors are more interested to donate bitcoin based on bitcoin’s market performance, so that’s a friction point. It can be harder for campaigns to raise money in bitcoin in a down market, whereas in early 2018 it was much easier. And the other friction point, the most acute friction point is in finding liquidity to access local resources for cryptocurrency. But frankly to have access to a new donor set, to a more engaged donor set – engaged because there’s transparency in the process and deeper communication is such an opportunity for nonprofits that we haven’t found there to be – folks haven’t seemed to be deterred by the extra step of converting bitcoin to their local fiat to access resources.

Chitra: So you’re saying that it has opened up an avenue of new donors for you?

Alyse: Well BitGive has always worked with Bitcoin donors – but it has opened new donors for non-profits that accept most of their capital in fiat currency.

Chitra: So a lot of people think that cryptocurrency is essentially a purview of the wealthy, so when it comes to crypto donations do you have to give large amounts or can you also give small amounts? You know, fractional donations, given that you’re dealing with fractional currency?

Alyse: BitGive has been really blessed to have large donors participate and that has fueled much of what we do and the building of GiveTrack. But GiveTrack was really built for folks giving 5 to 20 dollars a couple times a year. So the ideal donor, the ideal user is a millennial or a generation z individual that has become active in the cryptocurrency space, that can log onto the platform, review 4 to 6 projects on the platform and decide what they feel passionate about and give five dollars. And if that person then comes back in a couple months to review our projects again and consider giving another five dollars, that’s really who GiveTrack was built for.

Chitra: So it really goes to the essential philosophy of cryptocurrency in some ways, do you think?

Alyse: Absolutely, so the idea of bitcoin and cryptocurrency is that everyone can participate in the ecosystem, everyone has access to the blockchain ledger freely and fairly and without judgement – GiveTrack and BitGive mean to leverage that technology in the truest way and according to the principles of bitcoin. Give track was built to allow folks to be able to participate, to share a couple thousand dollars for a nonprofit, but also for folks to share a couple dollars or twenty dollars as they have it, and those repeat 20 dollar donations are really what drives forward BitGive.

Chitra: And because of the fluctuations in the value, sometimes you may give 20 dollars and it might amount to a lot more if the market is up.

Alyse: That’s right and that was really what BitGive – one of the ideas that BitGive was founded on was, folks coming into the ecosystem in 2013 or 14 and startups in the ecosystem during those years that were surviving on a shoestring budget could give a small portion of their profits or of their earnings to BitGive that would then be a steward of that capital and pass it along to nonprofits. Of course one of the value props of Bitcoin in its’ early days – and these count as early days – was that the value of a Bitcoin can go up in price so if you give 20 dollars worth of Bitcoin, that 20 dollars can become worth 25 or 30 and that nonprofit can reap the reward of that gain.

Chitra: Of course the flip side of that is also true, when the market is down…

Alyse: It is true, and BitGive aims to manage both the opportunity and the risk inherent in market fluctuation in Bitcoin.

Chitra: And it would seem that because of the volatility in these markets that you want to have very strong treasury management in place so that you don’t lose the value of the funds if the market goes down – how are you managing that?

Alyse: Internal to BitGive?

Chitra: Mhmm.

Alyse: That’s a good question, I don’t know how much of that is transparent or not, and so I suppose I’ll say this – BitGive has been really fortunate to have in addition to its board of directors a really strong advisory board. BitGive takes two things very seriously – one that you asked specifically and one that you alluded to. So the first that you asked specifically is the management of cryptocurrency against market cycles and how to make sure that the opportunity in Bitcoin for growth and value of the asset is something that BitGive takes advantage of while at the same time not being overexposed to down markets. This is something that both the board of directors and advisory board are built to account for and then second, which I think was implied by your question, is the security of funds if they are held in cryptocurrency. That’s something that I have worked with BitGive closely on, but Bitcoin’s leading experts on the subject are the ones that have put our processes in place so that funds are secure.

Chitra: So that’s really a kind of important aspect of this, because as you know cryptocurrency is so prone to hacks and scams and theft if it seems like a lot of nonprofits now have to put in place very seasoned technical people who can understand this and who can you know build the security models so that your funds are not vulnerable to some of those threats.

Alyse: So BitGive has that in place for themselves and helps the nonprofits that we work with that are using cryptocurrency to put that in place as well. So we use technology like multi-signature wallets, and partners that are security providers and established security providers in the space and BitGive aims to be instituting the frontier most looking best practices for security and then to pass those along to the nonprofits we work with in a way where they can adopt and manage it independently after BitGive’s onboarding.

Chitra: When done right, what’s the best part about this new kind of philanthropy?

Alyse: Oh, that’s a fantastic question. I think when done right, what it looks like is that transparency is used to catalyze excitement for giving and catalyze a connection between the donor and then those affected by their donations. For instance, BitGive did a project around building a well at a girls school in Africa. And that project provided incredible transparency because BitGive’s Connie Gallippi the Executive Director herself is on the ground there were videos shared of the project and there was tracking of milestones achieved vs dollars given and the hope is that donors then feel more connected to the girls and the school that will actually benefit from their dollars, rather than just an annual communication from the non-profit they gave to, which is how non-profits and foundations typically work in the traditional ecosystem. What BitGive wants to do is modernize that both through the adoption of technology and then through the adoption of technology and then through new processes and communication that the technology encourages.

Chitra: And then when it’s not done right what does it look like?

Alyse: When it’s not done right in the cryptocurrency space specifically? Well I think when it’s not done right there’s not a consideration given for the folks on the ground, the folks we are trying to give to, which is kind of the magic bean problem I referenced earlier which is giving someone a cryptocurrency almost seems like just to say you’ve given it to them without a way for them to use it and there’s many people that are in such great need that to give them magic beans without a way for them to use the magic beans for vital resources, you know, is quite indulgent for the folks doing that sort of work. You know, perhaps it’s a first step and it’s something that can mature, and this is why BitGive has wanted to be really transparent and communicative about what we have done, so that other organizations can learn from those processes and works.

Chitra: And what’s the largest most successful crypto fueled project in the world that you know of?

Alyse: I’m very biased, but I think and believe that it will be GiveTrack. And the reason is this – GiveTrack is meant to catalyze a newer generation of donors, I think it will speak to a younger generation of donors, and it’s not meant to engage donors once, but it’s meant to show the way that donors can deeply engage over time in a way that there’s trust and affection, frankly, between the donor and the nonprofit and so if that’s able to introduce a new donor class that’s excited to give that understands actually what’s happening when they give, GiveTrack has an opportunity to be the most successful nonprofit project in the space.

Chitra: And in terms of tangible benefits, if you look at the other side…

Alyse: That’s a really interesting question – I’m not sure if I know the answer to that. So Connie and I have talked about this a lot because I think there was a time when BitGive had introduced the largest number of people to Bitcoin and the reason I think that is because BitGive has been working with larger organizations like save the children and save the children touches millions of people every year and through introducing an organization like Save the Children to Bitcoin, you’re introducing millions of folks to the technology, but that said, I think really the way that Bitcoin or cryptocurrency has had the largest effect on developing markets or folks in need is just the introduction of the technology itself, not necessarily a non-profit in it’s own silo or niche. Bitcoin was really introduced as a way for folks to have access to a financial system nd a set of financial tools without going through intermediaries, which allowed for unbanked and underbanked individuals to be included in the first time in a global marketplace. So I think the introduction of Bitcoin itself is really what has been most impactful – and will bring benefit to the largest number of folks.

Chitra: And is there any difference in tax impact for people who want to donate using crypto.

Alyse: I can share resources to work we did in 2015 or 16 I believe on proper tax reporting when you’re donating Bitcoin or cryptocurrencies, and the tax implications. I’m happy to share that link with you and your audience.

Chitra: I think that would be really helpful.

Alyse: And we do see an uptick in giving right as people are getting ready to wrap up their tax year. So it seems as though people are smartly being thoughtful about that.

Chitra: Great do you have any closing thoughts on crypto philanthropy?

Alyse: My closing thought would be that crypto philanthropy has been one of the most well-suited applications of the technology to date. So for folks that are even thinking just simply about the application of Bitcoin and crypto to everyday and necessary uncontrived use – so acute and apparent need – cryptocurrency philanthropy is there and fits into that bubble. So it’s a way to use that technology today to create efficiencies in an existing and necessary system.

Chitra: So usually is it primarily Bitcoin that’s the currency that’s used or can you use other coins too?

Alyse: BitGive is focused today on Bitcoin and always has been, and because Bitcoin is an immutable and transparent and truly decentralized system – it’s the blockchain that we believe and I would argue makes the most sense for nonprofit use.

Chitra: Well Alyse thank you so much it’s been great having you.

Alyse: Thank you for having me.

Chitra: Where can people learn more about you and the work that you do both at StillMark and BitGive?

Alyse: The name of my venture fund is StillMark and you can learn about me at www.alysekilleen.com. BitGive is at BitGivefoundation.org and our five year report is there to provide transparency for donors and for folks considering BitGive and access to GiveTrack is there as well.

Chitra: Great, thank you so much.

Chitra: Alyse Killeen is founding partner of the venture capital group StillMark and Interim President of BitGive, the first Bitcoin and blockchain non-profit charity. I’ve included some helpful links and resources for this episode on our blog. Join me next week for a really interesting episode of Running with Unicorns – crypto taxes. Tax Attorney Jeff Neumeister is my guest, and he offers tons of helpful advice and tips about how you deal with your 2018 crypto taxes and looking ahead to 2019. It’s an episode you don’t want to miss. Until then? Enjoy your crypto journey, unicorns.

Running with Unicorns, a Crypto Podcast by Gem

Running with Unicorns is a crypto podcast and video interview series hosted by Chitra Ragavan, Chief Strategy Officer of Gem. A veteran former journalist with National Public Radio (NPR) and U.S. News & World Report (U.S. News), Chitra interviews crypto thought leaders, regulators, and experts to offer a lens into the rapidly evolving world of digital assets. Designed to appeal to both beginner and seasoned investors, Running with Unicorns is produced at Gem’s headquarters in Venice, California. Our mission is to offer unbiased and independent analysis of the news and events shaping the cryptocurrency movement, industry, and markets and to explore the role that digital currency will play in the future of money.