A non-fungible token, or NFT for short, is a unique asset on the blockchain. NFTs possess individual identification codes that authenticate and distinguish them from other tokens. More simply put, NFTs are a new way to prove ownership of a digital object like a JPEG of an original artwork, a piece of real estate (virtual or physical), or even an MP3 of a song. Because these files exist on the blockchain, every time an NFT is created, traded, bought, or sold there is a record of the transaction. Since these assets can be created (a.k.a. “minted”) and sold on many online marketplaces, NFTs are accessible for collectors around the world. This accessibility has caused NFTs to become a great opportunity for non profit organizations (NGOs) to leverage for fundraising and getting new people in their donor network.
There are many reasons why nonprofit organizations should consider NFTs as a viable fundraising strategy. NFTs allow nonprofits to engage and interact with an affluent and younger audience. A recent survey by Fidelity Charitable found that “crypto donors are disproportionately charitable. About 45% of crypto investors donated at least $1,000 to charity in 2020, compared to only 33% of the general population.” Oftentimes nonprofits don’t even need to create the digital asset; the NGOs can partner with creators who can allot a percentage of their sales to be donated. The most famous example of this is the most popular NFT project of all time called Bored Ape Yacht Club. This project has donated $925,000 to Orangutan Outreach as of August 2021. This is not the only option for NGOs as there have been many successful projects with artwork created by the nonprofits. The benefit of this method is that an organization can keep all the money raised instead of a small percentage. The Red Cross and Make-A-Wish Foundation have run successful projects like this.
The steps to start an NFT project can seem intimidating for a nonprofit but we’ve compiled how to get started and some important steps and elements to consider when starting a project.
An important step in getting ready for an NFT project is making sure that the organization is set up to accept cryptocurrency. Nonprofits can opt for a couple different solutions to handle the cryptocurrencies: leveraging a crypto wallet or using a payment processor; which one to choose will depend on a number of factors:
There are two paths that most nonprofits follow when deciding what they want their NFT to be: original artworks created by the nonprofit or a collaboration with an artist.
When working with an NFT artist, the artist will either donate the pieces of digital art or the nonprofit will receive a certain percentage of the profits generated. Creating a partnership with a well known artist is a great way to immediately gain recognition and interest in the project, especially if they have already experienced some past success in the NFT space.
Nonprofits can also create their own original artworks. A common way for organizations to do this is to create a physical piece and then scan and upload it to an NFT marketplace. The organization can give the original artwork to the NFT owner once the purchase is made. Oftentimes a supporter of the organization who is new to NFTs is more comfortable purchasing a physical art piece and then receiving digital art along with it.
Additional value can be added to an NFT by linking each NFT with some utility. For example, if an organization has a yearly event, the owner of the NFT could receive tickets or some VIP privileges to the event every year. This is a great way to give people who invest in the NFT project some extra benefits and also create a sense of community around the project.
Choosing where to sell the NFT is an important choice in any project. Different marketplaces operate using different crypto currencies and it is important to check if they accept the major crypto currencies or if they only operate using their proprietary coin. The marketplace should at least include the option to buy using ethereum or bitcoin - the two largest and most stable crypto currencies. For a fundraiser, it is important to avoid marketplaces with proprietary coins since it is better to not have to require the donor base to convert their existing coins which would incur a fee for them.
Each marketplace also charges different fees. A typical transaction fee for sellers is around 2-3%. Some marketplaces such as Rarible charge a fee on top of the NFT price per transaction which would be passed onto the donor. Avoiding marketplaces like these is recommended so donors can avoid additional costs associated with their participation in the NFT project.
Some marketplaces are also easier to use than others. For this reason it is recommended to use a very popular, well known, and established marketplace. For running an initial NFT fundraiser OpenSea is a great option. Opensea has a free signup for new users and only charge a 2.5% fee on each transaction. They are the leader in NFT sales and they are built on Ethereum, the 2nd most popular cryptocurrency.
There are numerous options for how the NFTs can roll out onto the marketplace and be purchased. Organizations sell the NFTs by auctioning them off or using a fixed price for each piece. Auctions can either be a timed auction, where there is a time limit to submit the final bid, or an unlimited auction where the organization can opt to end the auction whenever they choose. If a nonprofit believes that its project has gained traction and there is excitement about the release, choosing to do an auction can be advantageous to try to drive prices up.
Consider setting up royalties for each NFT. Buying and selling is a big component of the NFT market so setting up royalties will allow the nonprofit to collect a percentage of the purchase price every time that one of their NFTs is resold. This is a great way to passively earn donations while in between NFT campaigns.
The success or failure of an NFT campaign is heavily dependent on the promotion and documentation of the project. With NFTs being a newer technology and one that people may not be familiar with, an important step of the campaign is to inform the organization, its supporters, and its donor base about the fundraiser and how it works. Some key topics to discuss about NFT fundraising include:
The "NFT Crypto community," according to Token Minds, "refers to a group of people that are actively collecting, trading, selling, and engaging in conversation about Non-Fungible Tokens or NFTs." Building an NFT community from the beginning is pivotal to having a successful project. Most of the buyers of the NFTs will be the people from the nonprofit's community, but the community will also generate buzz and excitement that will bring additional donors to the organization's profile and its cause.
The first thing to establish for the NFT community is the organization's vision. Giving the community a purpose to get behind is critical, and luckily this is the strength of many nonprofit organizations. Being transparent with how the fundraiser helps their cause and where the funds get allocated will get the community to rally around exciting projects.
Communicating effectively is a great way to build community. Social media is an ideal platform to start from and choosing the correct channel that will best resonate with the community is important. A couple options are listed below:
Effective communication will lead to a project getting more buzz with more people involved. Communication will also separate the thrown together NFT projects and the ones with credibility and purpose. With a clear mission behind the NFT project, the excitement of the project will grow organically and exponentially.
Set a launch day and inform the organization's community of the fundraising plans. Nonprofits should make sure to promote where the NFTs are going to be sold and, most importantly, who the NFTs will help. Following the previous steps will help ensure that the launch goes as successfully as possible.
The potential for NFTs to help nonprofits raise funds is a space in the intersection of technology and philanthropy that is continuously evolving. We at Dura Digital are closely following what opportunities and roadblocks any organization should keep in mind considering creating NFTs. Our team is always looking for and exploring ways to apply the latest technology to solve problems and move your organization forward. Contact us today to discuss how NFTs could be an area for your organization to start exploring.
A non-fungible token, or NFT for short, is a unique asset on the blockchain. NFTs possess individual identification codes that authenticate and distinguish them from other tokens. More simply put, NFTs are a new way to prove ownership of a digital object like a JPEG of an original artwork, a piece of real estate (virtual or physical), or even an MP3 of a song. Because these files exist on the blockchain, every time an NFT is created, traded, bought, or sold there is a record of the transaction. Since these assets can be created (a.k.a. “minted”) and sold on many online marketplaces, NFTs are accessible for collectors around the world. This accessibility has caused NFTs to become a great opportunity for non profit organizations (NGOs) to leverage for fundraising and getting new people in their donor network.
There are many reasons why nonprofit organizations should consider NFTs as a viable fundraising strategy. NFTs allow nonprofits to engage and interact with an affluent and younger audience. A recent survey by Fidelity Charitable found that “crypto donors are disproportionately charitable. About 45% of crypto investors donated at least $1,000 to charity in 2020, compared to only 33% of the general population.” Oftentimes nonprofits don’t even need to create the digital asset; the NGOs can partner with creators who can allot a percentage of their sales to be donated. The most famous example of this is the most popular NFT project of all time called Bored Ape Yacht Club. This project has donated $925,000 to Orangutan Outreach as of August 2021. This is not the only option for NGOs as there have been many successful projects with artwork created by the nonprofits. The benefit of this method is that an organization can keep all the money raised instead of a small percentage. The Red Cross and Make-A-Wish Foundation have run successful projects like this.
The steps to start an NFT project can seem intimidating for a nonprofit but we’ve compiled how to get started and some important steps and elements to consider when starting a project.
An important step in getting ready for an NFT project is making sure that the organization is set up to accept cryptocurrency. Nonprofits can opt for a couple different solutions to handle the cryptocurrencies: leveraging a crypto wallet or using a payment processor; which one to choose will depend on a number of factors:
There are two paths that most nonprofits follow when deciding what they want their NFT to be: original artworks created by the nonprofit or a collaboration with an artist.
When working with an NFT artist, the artist will either donate the pieces of digital art or the nonprofit will receive a certain percentage of the profits generated. Creating a partnership with a well known artist is a great way to immediately gain recognition and interest in the project, especially if they have already experienced some past success in the NFT space.
Nonprofits can also create their own original artworks. A common way for organizations to do this is to create a physical piece and then scan and upload it to an NFT marketplace. The organization can give the original artwork to the NFT owner once the purchase is made. Oftentimes a supporter of the organization who is new to NFTs is more comfortable purchasing a physical art piece and then receiving digital art along with it.
Additional value can be added to an NFT by linking each NFT with some utility. For example, if an organization has a yearly event, the owner of the NFT could receive tickets or some VIP privileges to the event every year. This is a great way to give people who invest in the NFT project some extra benefits and also create a sense of community around the project.
Choosing where to sell the NFT is an important choice in any project. Different marketplaces operate using different crypto currencies and it is important to check if they accept the major crypto currencies or if they only operate using their proprietary coin. The marketplace should at least include the option to buy using ethereum or bitcoin - the two largest and most stable crypto currencies. For a fundraiser, it is important to avoid marketplaces with proprietary coins since it is better to not have to require the donor base to convert their existing coins which would incur a fee for them.
Each marketplace also charges different fees. A typical transaction fee for sellers is around 2-3%. Some marketplaces such as Rarible charge a fee on top of the NFT price per transaction which would be passed onto the donor. Avoiding marketplaces like these is recommended so donors can avoid additional costs associated with their participation in the NFT project.
Some marketplaces are also easier to use than others. For this reason it is recommended to use a very popular, well known, and established marketplace. For running an initial NFT fundraiser OpenSea is a great option. Opensea has a free signup for new users and only charge a 2.5% fee on each transaction. They are the leader in NFT sales and they are built on Ethereum, the 2nd most popular cryptocurrency.
There are numerous options for how the NFTs can roll out onto the marketplace and be purchased. Organizations sell the NFTs by auctioning them off or using a fixed price for each piece. Auctions can either be a timed auction, where there is a time limit to submit the final bid, or an unlimited auction where the organization can opt to end the auction whenever they choose. If a nonprofit believes that its project has gained traction and there is excitement about the release, choosing to do an auction can be advantageous to try to drive prices up.
Consider setting up royalties for each NFT. Buying and selling is a big component of the NFT market so setting up royalties will allow the nonprofit to collect a percentage of the purchase price every time that one of their NFTs is resold. This is a great way to passively earn donations while in between NFT campaigns.
The success or failure of an NFT campaign is heavily dependent on the promotion and documentation of the project. With NFTs being a newer technology and one that people may not be familiar with, an important step of the campaign is to inform the organization, its supporters, and its donor base about the fundraiser and how it works. Some key topics to discuss about NFT fundraising include:
The "NFT Crypto community," according to Token Minds, "refers to a group of people that are actively collecting, trading, selling, and engaging in conversation about Non-Fungible Tokens or NFTs." Building an NFT community from the beginning is pivotal to having a successful project. Most of the buyers of the NFTs will be the people from the nonprofit's community, but the community will also generate buzz and excitement that will bring additional donors to the organization's profile and its cause.
The first thing to establish for the NFT community is the organization's vision. Giving the community a purpose to get behind is critical, and luckily this is the strength of many nonprofit organizations. Being transparent with how the fundraiser helps their cause and where the funds get allocated will get the community to rally around exciting projects.
Communicating effectively is a great way to build community. Social media is an ideal platform to start from and choosing the correct channel that will best resonate with the community is important. A couple options are listed below:
Effective communication will lead to a project getting more buzz with more people involved. Communication will also separate the thrown together NFT projects and the ones with credibility and purpose. With a clear mission behind the NFT project, the excitement of the project will grow organically and exponentially.
Set a launch day and inform the organization's community of the fundraising plans. Nonprofits should make sure to promote where the NFTs are going to be sold and, most importantly, who the NFTs will help. Following the previous steps will help ensure that the launch goes as successfully as possible.
The potential for NFTs to help nonprofits raise funds is a space in the intersection of technology and philanthropy that is continuously evolving. We at Dura Digital are closely following what opportunities and roadblocks any organization should keep in mind considering creating NFTs. Our team is always looking for and exploring ways to apply the latest technology to solve problems and move your organization forward. Contact us today to discuss how NFTs could be an area for your organization to start exploring.
2212 Queen Anne Ave. N #923
Seattle, WA 98109
José Ellauri 938
Montevideo, CP 11300
7630 119th Street NW
Edmonton, AB T6G 1W3
2212 Queen Anne Ave. N #923
Seattle, WA 98109
José Ellauri 938
Montevideo, CP 11300
7630 119th Street NW
Edmonton, AB T6G 1W3
2212 Queen Anne Ave. N #923
Seattle, WA 98109
José Ellauri 938
Montevideo, CP 11300
7630 119th Street NW
Edmonton, AB T6G 1W3
2212 Queen Anne Ave. N #923
Seattle, WA 98109
José Ellauri 938
Montevideo, CP 11300
7630 119th Street NW
Edmonton, AB T6G 1W3
