Alex (00:03):
In Afghanistan, it's really hard to get access to the educational system if you're a woman and they've opened up these schools that are teaching women to code, get their own jobs, right. And be much more independent, kind of outside of this ridiculous system, they have they're right where women can't go to school. And in some cases they're even teaching 'em about crypto. They're able to pay them in crypto. You know, when we saw disaster in Afghanistan these last few months or over the last year, when they were getting kind of cut off from the rest of the financial system, crypto was one of the few ways people were able to get aid into the country.
Mike (00:35):
Welcome to Cause and Purpose, the show about leaders, innovators, and change agents working on the front lines to solve some of the world's greatest social challenges. I'm Mike Spear. We've got a special treat in store for you today. While most of our episodes are more about the stories of nonprofit, social enterprise leaders. This week's show is a bit more tactical. Alex Wilson is here, who, along with this, co-founder pat created the giving block and online fundraising platform that empowers nonprofit organizations to accept cryptocurrency and NFT donations from all over the world. We'll cover all the cryptocurrency basics. What is it, why is it important for nonprofits to know about and how organizations can think about and start to engage the growing community of crypto philanthropists out there? Hope you enjoyed the episode, Alex. Thanks so much for joining me, uh, excited to have you on the show and talk about some crypto donations.
Alex (01:25):
Yeah. Mike pumped to be here. Thanks for having me.
Mike (01:28):
How did you get into crypto and, and also, you know, where does your love of philanthropy and your, your interest in social impact come from and, and putting those two together for crypto philanthropy?
Alex (01:39):
Yeah. So it's, it's starts as kind of two different in stories and then they kind of came together. Yeah. Um, so, uh, I was sort of your more typical management consultant before starting the giving block. Um, and we were working with a lot of fortune 500 companies on different emerging tech at the time. It was kind of a mixture of like IOT AI. And back then it was really more enterprise blockchain through my work. I was starting to hear people just mention crypto and Bitcoin a bit more often. And in my free time, you know, back in 2016 and 2017 just basically became obsessed with crypto. Um, and one of the things that really hooked me on it was actually related to sort of the human rights case for Bitcoin and cryptocurrency. Um, as I went down, you know, the Bitcoin rabbit hole and started learning about it, you know, of course people were often talking about it as, as an investment case, right?
Alex (02:31):
Like this is digital goal. This is hedge against inflation, all these other things you hear people talk about. But then I started to discover some of the work that people were doing with Bitcoin in countries like Venezuela, for example, where, you know, they had hyperinflation, they had a really corrupt government. They had all sorts of issues with their financial system there. And people were turning to Bitcoin and other cryptocurrencies as a better alternative to their kind of local currency. And it was that point when I really got, you know, basically hooked on crypto because I could see that use case playing, uh, out, you know, among a lot of different countries, right? It wasn't that people were using Bitcoin to buy coffee at Starbucks in the us. Um, crypto was helping people in countries where they didn't have the stability of the us dollar and our financial system.
Alex (03:14):
So that's where kind of the, the love of social impact in crypto started to overlap. Um, and then that ties in well to how we started the giving block, because around that same time, I got one of my college friends interested in crypto, pat Duffy, who became my co-founder. We went to wake forest together. We were both living in DC together after college too. And I, I dragged him into buying little bit of crypto and tradings and crypto. And he happened to be working at a non-profit at the time. Essentially, I was the crypto guy. He was the nonprofit guy. He knew how nonprofits operated. I knew how crypto worked. And in late 2017, you know, he had the idea of, Hey, why don't we set up the lupus foundation where he was working at the time to start accepting crypto. And then of course, once we figured out how to do it once we're like, all right, this is something we can replicate. Something we can help. A lot of nonprofits do. And ultimately with the lens of this is gonna be a huge donor demographic for nonprofits in the coming years. If crypto keeps growing the way we think it's going to grow,
Mike (04:09):
Give us the elevator pitch, what's the giving block and why should organizations care about it?
Alex (04:14):
I mean, at the highest level possible, we're trying to make it really, really easy for nonprofits that tap into this new a donor demographic of crypto users. And our approach has always been unique in the sense that we don't view this as just another donation method. We really want nonprofits to think about this like a donor demographic, because anyone can figure out a way to accept Bitcoin and plop a donation button on their website, but actually fundraising. It is a whole nother ball game, right? So when we work with nonprofits, we actually want to help them become good crypto fundraisers and have a strategy around building a crypto fundraising program. Of course we wanna supply the product and the technology to make it as easy as possible for them, but we're hoping to, you know, teach them a way to take that a step further and actually ensure that they're building crypto fundraising program.
Mike (05:02):
You know, when you guys launched crypto with the lupus foundation, do they see an immediate lift, you know, donations rolling in right off the bat or kind of, how did that go for them? It
Alex (05:11):
Was a pretty slow process just to get anyone to even consider crypto as a donation method back in 20 17, 20 18, even 2019, since not many nonprofits were doing it. It was quite at the uphill battle for us. So it took us, you know, over a year of just convincing before we could even try anything, but they did see some donations immediately. I mean, this wasn't, you know, millions of donations, but certainly thousands of donations starting to, to come in. And what we're seeing is for a lot of organizations, the longer that they take crypto the, of their return has been because they start to build a brand, get their name out there in the community. So there is a pretty good first mover advantage for nonprofits that are getting signed up now versus ones that wait three to five years when everyone's doing it,
Mike (05:55):
Did this sort of adoption of crypto philanthropy have anything to do with the pineapple fund? How did that impact the awareness of crypto as a tool for making donations in nonprofits?
Alex (06:06):
Yeah, so we, we didn't personally have a direct connection to the pineapple fund, but it was certainly really inspirational for us and was kind of the tipping point of where we were like, wow, this is pretty crazy. This is gonna be a huge deal. Um, when we saw the pineapple fund kind of happening in real time on Reddit in December, 2017. And, you know, you saw the nonprofit skepticism of is this stranger on the internet, really gonna be giving away millions of dollars of Bitcoin, especially when they'd never received a gift of Bitcoin before, or very few of the recipients had. And ultimately what we decided to do was actually interview all of those nonprofits that were a recipient of the pineapple fund and learned what challenges did they have, um, you know, what went well, what didn't go well. And we found a lot of them didn't have a great solution for either accepting the crypto, even as a one-off time gift, or they didn't really have a plan going forward for how they were gonna fundraise additional gifts.
Alex (07:01):
So funny enough, many of these nonprofits got set up to accept crypto for the first time. And many of them ended up switching over to using our platform because it was much more comprehensive, right. It was really the first platform built for nonprofits and we were actually helping them become good at crypto fundraising. Um, so most of those recipients are our clients now, but that was, that was the first sort of public moment of crypto philanthropy. In some ways you could say crypto philanthropy was kind of born with the pineapple fund. Okay. So lots of nonprofits kind of scrambling just to open any sort of wallet or exchange account, just to be able to get the gift in. Some of them did a, a better job than others, because I think there was a lot more to think through than a lot of them realized at the time, since it such a new concept.
Mike (07:40):
Yeah, no, it's awesome. For anybody who doesn't know, I, I guess we should probably give a little bit of background. The pineapple fund was created by some person who is totally anonymous. Nobody knows who they are, where they live, even, you know, their gender or age or anything like that, who just, they ended up making a ton of money on crypto, uh, the tagline on their website. I, I love it says because when you have enough money, money doesn't matter. And they ended up donating 55 million to various causes just out of their crypto bank. So probably the, one of the earliest biggest crypto philanthropists out there.
Alex (08:12):
Yeah, yeah. Such a cool story. And, you know, it's, we wrote a really long form article about it and you know, we're always kind of thinking in the back of our mind, like will a pineapple fund sort of ever come back, right? Or who's gonna be sort of the next pineapple fund. Um, it'll be interesting because they've stayed relatively quiet ever since those donations were paid out. And we haven't heard, haven't heard too much since then
Mike (08:34):
Using cryptocurrency as a way to bank the previously unbankable, uh, essentially giving access to a banking system for people that wouldn't be able to qualify necessarily for Fiat currency banking accounts and stuff like that. Is, is that an area that we can dive into or, uh, yeah. Any thoughts on that?
Alex (08:50):
Yeah, happy to, um, I mean, just to, to kick it off, right. The very concept of Bitcoin is meant to be a way of sort of democratizing money and finance. Um, and a huge part of that is simply the accessibility, right? Anyone with a, you know, a device that can access the internet basically can open a Bitcoin wallet for free and buy, sell trade Bitcoin anywhere are in the world, 24 7, there is no, uh, bank that says or says you can or can't have Bitcoin. Right? So the accessibility alone is, is pretty remarkable. One really cool story on that real quick with one of our clients. I don't know if you've heard of the organization Code to Inspire?
Mike (09:31):
No, I'm not familiar with them.
Alex (09:32):
So they were one of our earliest clients. Actually, they have a, I think a couple schools now in Afghanistan, teaching women how to code, um, because of course in Afghanistan really hard to get access to the educational system. If you're a woman and they've opened up these schools that are teaching women to code, get their own jobs, right. And be much more independent, kind of outside of this ridiculous system, they have there, right where women can't go to school and in cases they're even teaching them about crypto, they're able to pay them in crypto. You know, when we saw the, um, kind of the disaster in Afghanistan these last few months, or over the last year when they were getting kind of cut off from the rest of the financial system, crypto was one of the few ways people were able to get aid into the country. So we saw some really interesting use cases around that play as well.
Mike (10:16):
You guys launched recently a fund, uh, to help people with Ukraine. Is that following kind of a similar strategy?
Alex (10:22):
Yeah, it is. So, I mean, a, a lot of our clients that we work with, even though they might be based in the us, they tend to have international operations, right? Like a, save the children in a direct relief, international mega, um, groups like that. So a lot of them have started taking crypto gifts to fund on their relief efforts in Ukraine. Um, so in this case though, it's a little bit different than the Afghanistan situation, because in this case they're actually taking the crypto, it's being converted to local currency, and then they're using the local currency to buy supplies, you know, deliver cash, however they're normally delivering aid. Um, so a bit different, but in the, yeah, a really quick way to kind of mobilize fundraising efforts around the world.
Mike (11:01):
How, how would you define cryptocurrency and kind of what does it, what does it mean? And what's its role in our economic system.
Alex (11:07):
When I explain what Bitcoin and other cryptocurrencies are more broadly, I think it's really important to focus on what are the, the features and functionality that make it unique rather, you know, like a really technical definition, right? Like most people need to understand how it's helping people, right. How it's improving people's lives more so than understanding how Bitcoin mining works, right. At least in the beginning. Um, and that's the same thing we tell non-profits right. Sometimes people get too caught up in the, the technical details. Um, but it's just like, you know, your laptop or the internet, right. You know how to use your laptop and connect to the internet, but you don't actually know how the internet works. Right. Like, and you don't need to necessarily, as long as you can interact with it. All right. So with Bitcoin, if we use that as an example, you know, at its core, it's meant to be a digital peer to peer cash system so that you and I can transact directly on the internet without having an intermediary.
Alex (12:03):
So there's no bank, there's no payment processes are necessary. It would be, you know, me deciding to send you let's say 50 bucks worth of Bitcoin. And it goes directly into your Bitcoin wallet without needing to go through a middle man, essentially. So it's really the first peer-to-peer money that we've ever had. And it's also unique because it's digitally native right there, there was never, and there is not a physical form of it. It's just digital, um, which also has allowed it to be completely global and borderless in nature. Right? If I send you Bitcoin and you're in another country or another city, it doesn't matter. You know, the BI the Bitcoin wallets will operate anywhere. There's a connection to the internet, essentially, which is also meant that unlike, you know, let's say other trading markets, it's 24 7. If you wanna buy and sell Bitcoin, you can do that 24 7, unlike, let's say a local stock market.
Alex (12:54):
That's essentially open during business hours. A couple of the other key features that has made it particularly popular these last few years is, you know, you see a lot of headlines around things like inflation, um, inflation being a lot higher this year and last year than we've seen in recent history. And a lot of people have turned to Bitcoin as what they see as like a digital, a gold equivalent, or ultimately some sort of store of value. Um, and the reason for that is because with Bitcoin, for example, there's only ever going to be 21 million coins in circulation. It's a fixed number. There's not someone who can just wake up tomorrow and say, actually, I think there should be 31 million. It's always gonna be 21 million. So that certainty in the supply is reassuring for people, right? Especially people in countries where they've seen hyperinflation, right.
Alex (13:40):
That's why I mentioned earlier. It's so popular in places like Venezuela, where their inflation has been so crazy these last few years where their cash has become almost worthless in a really short matter of time. Um, and they see Bitcoin as a way of sort of opting out of that system and having an alternative, that's a bit more stable for them, which, you know, a lot of people complain about Bitcoin and crypto's volatility, but relative to some of those inflation numbers, it's actually relatively stable on a long enough timeframe. It's actually volatile to the upside, not the downside, which is always, uh, I think the opposite of the way people think about it, you know, over the last of a 10 year period, Bitcoin and crypto have been the best appreciating assets in the world. I mean, nothing else has outperformed it. So the volatility really is to the upside, as long as you're not looking at it on a day to day basis,
Mike (14:27):
What are these currencies backed by and how are there more being created while there's still a limit?
Alex (14:31):
Yeah. So on the first point around mining and, and sort of the supply, so out of 21 million only roughly 18 million or so in circulation, those remaining coins to get to the 21 million will be released over. I think it's roughly like another a hundred years. Um, so over time it's slowly being introduced in the circulation, but that end number will remain 21 million. Um, so that's how the minors are, are essentially mining these new coins in the process. And when it comes to setting the, the price of crypto, you know, it's completely determined by buyers and sellers in these markets. So just like stocks, right? If there's more buyers and sellers, the price goes up. If there's more sellers and buyers, price goes down, so it's truly supply and demand driven. Um, there's no like fixed price or, or anything like that on it. And when it comes to, you know, what people always say is like, well, what is it backed by?
Alex (15:23):
Or, or people like to say, it's not backed by anything. Right. And the funny thing is, in some ways it's backed by the technology and kind of the, of, you know, for example, there's only 21 million. You can use it 24 7. Everyone has access to it. It's kind of backed by that functionality and features, but at the same time, it not being backed by a government or an entity at all is also what makes it valuable because they know it's not tied to one country success, one company's success or one individual success. It's sort of this community aspect of it, um, where there's a network effect to, to how successful Bitcoin becomes. So people are investing in that aspect of it. And, you know, for a lot of traditional investors, it's a hard pill to swallow because they wanna invest in equity, in a company, right. Or a currency that's backed by a big government. And this kind of flips that whole model long it's head.
Mike (16:13):
I think it's hard to talk about the coins themselves and the trading mechanisms without talking about the blockchain a little bit and kind of, are you able to define that for us, for, for the audience here?
Alex (16:23):
Yeah. I mean, so if we talk about the term blockchain more broadly, I mean, this is essentially the underlying technology behind Bitcoin and a lot of other cryptocurrencies Bitcoin just happened to be, you know, the first application of it. And now of course the most popular application of it, but there's been now thousands of other cryptocurrencies that also use blockchain that have sprung up since then, but really, you know, when you think about what it actually is, it's, it's really like a public ledger system. Every transaction on these blockchains is permanent and has sort of this permanent audit trail. So you can see every transaction ever since the first Bitcoin transaction, you can follow it all the way back up until today. You can see transactions happening in real time. So it's introduced this, you know, almost like triple entry accounting system in some ways, right, where there's this trans parent audit trail until the end of time. And when those transactions are made, there is no reversing. It, it is truly permanent.
Mike (17:21):
So I've noticed over the past year or so, the major coins have had some pretty extreme fluctuations, like I think Bitcoin and, uh, Ethereum is now about half the value they were back in November. Can you talk a little bit about of volatility and kind of what you expect from the future of, of crypto?
Alex (17:38):
I mean, I would say I am of course biased. And you know, I ultimately think crypto continues to become more popular over time. Like the, the number of people interested in crypto and owning crypto is going up dramatically. You know, it's over 300 million people globally. Now that use crypto. Um, I think we'll continue to see a lot of volatility and, and price swings in both directions. But I do think over time it becomes less volatile as more or people enter the market. And as more money enters the market, I mean, crypto is a, you know, total worth a couple trillion dollars now, or, or maybe slightly less, which sounds like a lot of money, but that's small when you compare it to something like the us stock market, for example. So it doesn't take nearly as much money to move prices up or down because the market is relatively small still. So the larger that market becomes the less likely it'll be this volatile in the future. So some of it is, you know, a maturity kind of thing, right. And you can think of it almost a bit more like high growth tech stocks rather, right. That tend to be much more volatile than the traditional stock market where it's kind of in this early growth phase, early adoption phase, but it's going to kind of mature out of that phase. Eventually. It's hard to say when, but it's, it's probably not going away anytime soon.
Mike (18:59):
Why are there so many coins? I mean, I think giving block, you guys accept close to a hundred different currencies. Are there difference between them? Why is each one unique
Alex (19:07):
In general? You'll continue. I think this see a lot of new cryptocurrencies popping up essentially every day. I mean, because it's such a new industry it's still incredibly competitive and just like you saw a ton of, well, even, let's say the, the nineties going in two thousands, right. With the internet and.com boom, and bubble and all that kind of stuff. Most startups don't make it right. Whether you're to talking about that boom period or in general. Right. I think it's something crazy, like 90, 95% of startups just don't make it. Oh yeah. Um, and you can apply that same kind of thinking to crypto. The majority of them will not make it, but it's hard to say this early on, which ones are gonna stick around. Right. Like at this point it's pretty clear Bitcoin as remain number one. And I don't know how quickly that would ever change.
Alex (19:51):
Um, Bitcoin Ethereum have kind of stayed one and two for, for a while now. And there's a lot of other coins kind of vying for those top spots, but kind of what you were alluding to is some are designed with different use cases in mind. Um, like a lot of people would say you can't even really compare Bitcoin Ethereum because what people are trying to do with them is, is quite different. And then there's other cases like DOJ coin, which it was, you know, literally meant to be a joke. Um, so there was a lot of interesting history and use cases behind each one, but long story short, I think we're gonna keep seeing a lot of new cryptocurrencies and I'm sure there's gonna be popular cryptocurrency in the future that haven't even been started yet.
Mike (20:30):
How do you engage somebody you interested in giving crypto differently than you might through traditional grassroots means or, or, you know, larger philanthropy, major gifts?
Alex (20:40):
I would say one thing nonprofits should always think about is even just the age demographics of the crypto users or the typical crypto users, right? A ton of millennials and gen Zs. You know, these weren't, these weren't, and aren't the donors who are mailing a check every month. These tend to be net new donors and net new dollars. Because when we talk to a lot of these donors, they tell us they actually only donate crypto. And this is the first time they've really started donate in a more consistent, consistent, or meaningful way because so many of these younger donors have the majority of their wealth stored in crypto 83% of millennial millionaires, own crypto, and more than half have at least 50% of their wealth in crypto and nearly a third have at least three quarters of their wealth in crypto. When I first read those numbers, I had to reread it like four times to make sure I was reading that correctly.
Alex (21:35):
Yeah. Because it's such a staggering number. So I would say, keep that in mind when you're thinking about crypto, right. If you're not set up to accept crypto for a lot of these donors, you're just not on the menu and they're gonna essentially go somewhere or else that is accepting crypto. It's very unlikely. Although we do see it sometimes that a donor's going to reach out and try to convince you to accept crypto. Usually they're not gonna take the time to email you and, you know, spend a bunch of time doing that. So that's, that's certainly a big thing to keep in mind with these donors, because a lot of the nonprofits we work with they'll say, well, we've never had someone reach out wanting to give crypto. And it's like, well, yeah, that's because they went somewhere else, essentially. And then they're pleasantly surprised by how many new donors they find willing to give them crypto.
Alex (22:18):
Once they've announced that they now take crypto, that brings up another point too. You know, once you start accepting crypto, if you don't tell anyone you're accepting crypto, you're probably not gonna get a ton of donations. So that's something we help nonprofits with as well. Right? Make sure it's on your website. It's easy to find. You've got good messaging around it. You're weaving in reminders to your existing, digital marketing strategies and campaigns. That is like, Hey, we take crypto now, by the way, did you know, donating crypto can save you money on your taxes. Like, you know, all these different things that kind of keep a drum beat going. And we weaving these things into their existing marketing plans.
Mike (22:52):
How come crypto donations are so much larger on average? Why is the average so much higher? And why has it been increasing year over year?
Alex (23:00):
Yeah. So I mean, one of the biggest driver for crypto gifts in general is just how tax efficient they are for a lot of donors. So for a donors or, and for the, the nonprofit organization, it's very similar to a stock donation or other non-cash donation that's appreciated in value. So for the donor, that means if they're donating Bitcoin, that's appreciated in value. When they donate that to the nonprofit, they don't have to pay capital gains taxes on it, and they get a, a write off that's equal to the fair market value at the time of donation. So for a lot of people in the us, for example, that could be a, let's call it a 20 to 30% difference in how large introduction is and how much they're able to donate. And that's a win for the charity too, because they're essentially getting 20 to 30% more because they're getting those pre-tax dollars.
Alex (23:50):
And as a charity, they're not paying tax on either. So you can see why both sides, you know, love the prospect of getting 20 to 30% more money and it's better tax situation for the donor as well. So what we're finding is a lot of these are going to their financial advisors, their accountants, whoever's helping them, you know, manage their money and saying, you know, I wanna make a donation. What's the most tax efficient way for me to give. And usually these advisors are gonna tell them, you know, donate your most highly appreciated asset first, which for a lot of people tends to be crypto if they've held it, especially for a couple years now. Um, so they end up donating crypto and because it's a sort of a tax incentivized gift in some ways they usually want to donate a larger amount because they're trying to offset a certain amount in taxes. Whereas when someone's donating, let's say a hundred bucks, 200 bucks, or even a little bit more, it's usually not enough to make a huge difference for your tax situ. It has to be pretty sizeable to make a dent in, in some of these investors taxes. So that's part of the reason you're seeing it. It's much more of a strategic gift than it is, you know, a monthly, a hundred dollars gift or something like that.
Mike (24:56):
Do you think there's an opportunity for monthly recurring donations with crypto? Is that something that would even work in crypto or, or not? So
Alex (25:03):
It's, it's not something you can tech do very easily with crypto and that's meant to be a, a feature, not really a bug because crypto transactions are what people refer to as push transactions versus a pool transaction. If you use something like a credit card, you know, when you swipe your credit card somewhere, you enter in your credit card info, you're essentially getting charged on your card for, let's say a hundred dollars and that's something you can set up to happen once a month. And BA basically authorize with crypto. It's a bit different because you as the, the owner of the crypto or the user of that crypto, while it has to essentially approve that transaction every time. So you have to go in, enter in the charities, wallet, address, and click send. There's not a way for the charity to just pull the money out of your wallet every month. There's some interesting ways where we're trying to essentially build around that. That would allow people to set up a monthly recurring donation. If they, for example, prefunded a wallet with a certain amount and sent it to a smart contract. So let's say you put in $1,200 and then you authorized a hundred a month to be withdrawn every 30 days or something like that. So there's some workarounds we're building on, on stuff like that, but kind of the, the basic functionality doesn't allow for that. Unfortunately
Mike (26:15):
I've noticed on, on, on your site as well as, um, I think Coinbase is doing something like this and some of the other folks out there starting to build larger funds, uh, to market and then have people donate to the, the cons set rather than a specific organization, then distribute the funds from there. What what's that dynamic? Like? How, how is it working? You know, kind of, what do you see the future of that as?
Alex (26:36):
Yeah, so something we launched in the fall was what we called cause funds. And we recently rebranded those to be impact index funds, to better align with kind of the, the crypto investor mindset. But the general concept is, you know, we have a couple different types of funds. One is our crypto adoption fund, which is a way for someone to come to our platform, send one transaction and have it evenly split to all of the nonprofits we were with the other way they can donate. If they're not donating directly to a charity is they can donate to one of the cause funds. And for example, let's say you wanna donate to the environmental cause fund your donation to that fund is gonna be split to the, you know, 20 or so let's say environmental groups that we work with, and this is something we heard donors ask for a lot.
Alex (27:19):
And I think part of this is because they are younger donors. A lot of the them don't have relationships with individual brands or organizations yet. And so they just know they want to support environmental causes, but they're not sure which one. And so they rely on us to bring them sort of a vetted group, like an index fund, essentially of nonprofits that they can trust. And it's also really resonated with a lot of donors because this is also a great way for, for some Mueller and midsize charities to get a piece of the action that they might not otherwise when people donate to larger groups because of the sort of brand recognition that they have. Um, so this is a great way for donors to be able to fund a lot of the more innovative ideas that smaller nonprofits are working on while still donating to the larger causes too, and kind of spreading their impact more organizations.
Mike (28:06):
Do the nonprofits in those cases get the donor information, or is that, uh, is that not passing along in the fund context?
Alex (28:13):
In that case we can't, because it would just be, we'd be giving that donor's information to so many nonprofits that I think they'd kill us.
Mike (28:20):
Probably. How else would you round out the profile of somebody likely to donate crypto versus a more traditional donor?
Alex (28:27):
Yeah, I mean, I would say it's, it's changing a bit now and starting to normalize more with the general demographics as it gets more mainstream, but, you know, the early adopters were certainly in the bucket of being incredibly tech savvy, you know, often even working at startups and tech companies and things like that. And based in majors, it is, and we still see a lot of that and they, they tend to be a bit on the wealthier side, I would say because often they had some disposable income to be able to invest in crypto in the first place, or if not, you know, they became wealthy because of crypto. Um, that's certainly a pretty common scenario too, but end of the day, because they are younger. One important thing that comes along with that is that everything they do is, is digital essentially, right? Like they're not gonna, you know, look at the, the flyers that get mailed out, asking for donations, ask people to mail a check. It has to be a very digital strategy to reach these donors. And even, you know, where they hang out on the internet can be a bit different than the other donors. For example, with crypto, the most popular social media channel is actually Twitter, which I know from talking to a lot of our clients is, is very different than what they're seeing with their traditional donors who might skew a bit older and, and use let's say Facebook primarily is something we hear a lot.
Mike (29:40):
Are younger folks signing onto Twitter again?
Alex (29:44):
No, I, I, I think you're, you're right in the sense that, you know, Instagram and TikTok and stuff like that is, is incredibly popular with younger people. I think the reason Twitter became so popular in the crypto community is because it's, as far as I know, always been pretty popular in the broader sort of tech community, sort of the Silicon valley started up community across the country. Twitter has always been a place where, you know, I think people kind of talked and, and hung out kind of the, the geekier crowd for, for lack of a better way of putting it. So that's where you saw a lot of the early adopters and that's kind of hung around, then it started to get the name of, you know, crypto, Twitter, just kind of this subset of the community that just hangs out on Twitter all day.
Mike (30:20):
Yeah. Just give us a, like the top five ways that nonprofits can really take advantage of crypto donations.
Alex (30:26):
Yeah. So, I mean, if you're already accepting crypto, one thing we always tell nonprofits to do is, you know, first of all, you have to talk about it, which we briefly mentioned earlier. Right. So make sure you're layering it into your existing marketing. So if you have a gala coming up or to walk or, or other events, you know, it's, it's not a ton of work to add in a message during that event or around the marketing of it saying, Hey, by the way, we also take crypto now, right. And having that donate crypto button alongside the other ways people can give that's an easy opportunity to get some more donations. And, and that fits in with, you know, this general concept of like, make sure to keep the drum beat going year round, right? This isn't just something you start accepting crypto, and you talk about it once and then, you know, wait for the money to come in.
Alex (31:10):
You've gotta, gotta have a consistent effort around this. And it is very much one of those things where the more effort you put into it, the better your results tend to be. I mean, we, we see a difference in the nonprofits that, you know, put some, an effort to talking about this on social media or newsletters or, or at events and things like that, versus those who just get set up to take crypto and kind of sit back and, and wait for the money to come in. Right. There's, there's certainly a difference in performance because one thing too with these donors is although, you know, they might not get the personal record recognition. They like the recognition of crypto donations more broadly as a concept. And what I mean by that is, you know, they love to see, you know, these large nonprofits that they recognize, like, let's say, save the children, tweet out, you know, saying, thank you for your, let's just say, million dollar Bitcoin donation, right?
Alex (31:59):
Like this is gonna help thousands of kids around the world, an X, Y, Z way. Like, they love that as sort of a legitimizing factor of crypto when nonprofits are, you know, kind of openly thanking crypto donors, even if their name isn't specifically involved or tied to it in any way like that, you know, it kind of helps this cycle of, of making crypto more widely adopted and more widely used. So that's, that's something that's pretty important as well. And some of the other stuff that I would say is really important too, is, you know, if, if organizations are working with us, we see a ton of fundraising around the campaigns that we run to. Um, so stuff like crypto giving Tuesday, NF Tuesday, you know, we've got our year end bag season campaign, um, this week or next week, we're gonna be announcing one of our biggest crypto fundraising campaigns ever, where there's gonna be millions of dollars and matches available.
Alex (32:50):
Um, we'll be able to share more details on that soon, but, you know, making sure you're participating in these, you know, industrywide initiatives where it's way easier to get in front of crypto owners than any other time of the year. Um, and you know, it's important to, to kind of speak up and, and participate in those. And a lot of cases we'll even create marketing toolkits. So that nonprofits have kind of a copy and paste way to, to talk about a lot of this and, and be comfortable that they're not, you know, writing Bitcoin as two words and stuff like that,
Mike (33:20):
Should organizations, do you keep them in the cryptocurrencies or do you translate them to us dollars to put them into your account? Do you have any advice on, on that? Yeah,
Alex (33:29):
I mean, in general, we try to stay out of that decision, um, for nonprofits, cuz we don't want fall into the bucket of giving any nonprofit sort of financial advice. It's really a, you know, something that the, the finance team needs to decide. But what I will say is, you know, most of our nonprofits opt for that automatic conversion and it seems like a huge driving factor of that is because nonprofits are applying the same gift, acceptance policy as they have for stocks or other non cash gifts, which, you know, in most cases says we're converting all the stock donations we get for cash. Right. As soon as we get it. Um, so that's what we're seeing is the most common scenario. But yeah, I would say like 90% or more of our nonprofits offer that automatic conversion to cash.
Mike (34:12):
How did you and pat actually meet, I know your friends from college, but is there, is there a good story to how you guys first connected?
Alex (34:18):
No, there's, there's not really like a, a good story, like the first meeting or anything like that. Just got to know each other in, in college. And, and actually we became more close after college rather than in college. So we were more kind of a, I mean we were friends in college, but we, we certainly got a lot closer after we both graduated.
Mike (34:36):
How do you guys divide the role? How do you make decisions internally? Like, is there a CEO? How does, how does that work within mcg giving block?
Alex (34:43):
Yeah, I mean, it's, it's funny cuz people ask us this all the time and we're kind of like co everything like co CEO. Co-founders like all this kind of stuff. Um, and it's worked out really well for us. Um, you know, in the early days it was very much kind of I'm the crypto guy, he's the nonprofit, but over time we've of course both become experts in, in both fields. And, you know, I would say we've been a great balance to one another because in a lot of ways, pat is much more creative than I am and I'm much more of like keep the trains running and like operationally minded. So it ends up being a good balance of, of kicking is back and forth and you know, he'll come up with an idea, I'll tell him it's doable or it's not doable or I'll come with an idea and he'll tell me it's way too boring or something like that. Right. So it acts as a really good balance. And, and so, you know, we've split a lot of our, our work on a day to day basis based on our strengths essentially, where I'll be a bit more, you know, focused on, let's say like the product side of things or crypto partnerships, whereas he's spending more time with like the sales and marketing teams, for example,
Mike (35:54):
Is there a technical co-founder? I mean the giving block's a product company at the end of the day.
Alex (35:58):
Yeah. Not, not really. I mean, I am somewhat technical, but I'm certainly not a developer or anything like that. Um, and we, we hired, you know, an awesome team for that along the way as we went. Um, and we've got Batal on our team now, who's been with us for a couple years. He's our director of engineering. Um, and he helped us build an awesome product and, and development team, um, that, you know, we pat and I certainly couldn't have done this on our own from a, a technical perspective.
Mike (36:28):
What can we learn from the founding and growth of some of these great organizations that are just interested in social impact in general?
Alex (36:34):
Yeah, I would say for us, I mean, we were just like so naive going into this whole thing. Right? Like, and, and, and you could say this about a lot of like first time startup founders where you always think everything is gonna go so much more quickly than it really does. Right. Like when we started in 2018, we're like, alright, we've got the lupus foundation set up. Our we're gonna have a hundred nonprofits set up this year, whatever number we had in our head. Right. And everything end of the day took a lot longer than we expected it to. Uh, which I would say is I think pretty typical probably at how a lot of startups go. It was very typical. Yeah. It took us way longer than we expected to get traction and, and really have the company hit sort of that tipping point of growth where things really took off.
Alex (37:16):
And I'd also say we sort of under, at estimated like how difficult it is to also just like run a company day to day, right. Like learning how to manage people and teams and hire good, good staff members. Right. Like all of those things that we both hadn't necessarily done very much of before in our previous jobs. I mean, a lot of that stuff, we just had to learn on the fly and figure out as we go. And, and now of course like what we're doing every day is very different than what we were doing every day, a year ago. But yeah, I, I think for a lot of founders like hiring and managing people ends up taking up way more of your time than you. You're probably expecting, I would say,
Mike (37:55):
What have you learned for example about the nonprofit sector that you were surprised by?
Alex (37:59):
I would say one that, I mean, I, I realized pretty early on and, and one that I'm still surprised how often isn't known by kind of the general public or investors and things like that is just the, the size of the nonprofit market. Like I was so blown away by how many nonprofits there are in the us, how much is donated every year. And even I forget what the number is, but, you know, nonprofits are one of the biggest employers in the country too. So just the, the absolute size and scale of the nonprofit market just really blew me away. And that's something we had trouble with early on too, was when we were trying to raise money from investors, for example, um, most of them had no idea. There was, you know, 1.5 million nonprofits in, in the us alone. And there's over 400 billion donated every year.
Alex (38:45):
Like that was a huge hurdle for us and something that I was so surprised by how big it was relative to how few people seemed to know what a huge market, what this was and how much was happening in this market. So that's something we're still kind of grappling with, I would say in some ways. And, and our hope is that, you know, by building this company that we actually inspire a lot more entrepreneurs to build a startup in the nonprofit space, because we think there's this perception that this is a small market. And as a startup founder, an entrepreneur, that there isn't a lot of opportunity and it's actually quite the opposite. So we hope it inspires more innovative companies serving this industry and, and more people starting new companies in this industry because in a lot of ways, nonprofits have been kind of in some ways, almost neglected from a lot of technology, right.
Alex (39:34):
Um, and they, they haven't really been early adopters. And, and we're hoping that the giving block and, and crypto can play a role in changing that where nonprofits can actually lead when it comes to adoption of something like crypto and really set that pace of play to attract other founders to start companies in this industry. So that's something that's been really, you know, important to us from, from day one. I mean, there's so much opportunity. And, and I think a lot of people and, and companies too are starting to realize that, right. You see a lot more of kind of the, the bigger, you know, technology companies starting to offer products for nonprofits. And most of them weren't five years ago. Right. Um, it's, it's certainly much more on the radar of large companies now than, than a were before. So hopefully that trend continues so we can get the nonprofits, you know, all sorts of emerging technology that can then help them.
Mike (40:25):
I'm curious. So you guys recently were acquired, uh, by shift four. Can you talk a little bit about shift four, kind of what it is like, what your relationship with them has been like?
Alex (40:34):
And we just got acquired by, by shift four last week. And, you know, as a background for who they are as a company, you know, they're one of the largest payment companies in the world. They do over 200 billion in payments volume a year, and they have over 200,000 merchants using their payment products. Their kind of most dominant industries tend to be tells restaurants, bars, resorts, airlines, and nonprofits is actually a, a pretty new area for them. Um, so I imagine a lot of people in the, the nonprofit space probably haven't heard of them yet. Um, but them acquiring us, you know, the strategy is, is essentially twofold. One is to have the giving block kind of lead their efforts in the nonprofit space, create this as a new vertical for them, a new industry they wanna serve beyond just crypto, right. It kind of starts with crypto and the giving block, but offering other payment products.
Alex (41:27):
Um, and the other piece is, you know, as a payments company, they wanna start offering crypto solutions to their, their merchants that they're already working with. So as part of this acquisition, we'll be, you know, leading this effort around this crypto innovation center, that'll roll out crypto payments to the 200,000 merchants they're already serving and start integrating that into their products while simultaneously, you know, trying to go deeper and deeper into the nonprofit space. Um, you know, before hiring us, their, their primary sort of nonprofit client was actually St. Jude. So they do all the, the credit card processing for St. Jude, um, and the founder of shift tour really cool, you know, background store. He actually started shift four when he was 16 and has been running it ever since. Um, and about a, a year ago, roughly, um, he was actually the first civilian, um, space pilot where he actually flew the SpaceX rocket. Like he was the pilot, he was the one flying it, what, and the, you know, running the, the team who, who took that rocket to space. And as part of that, he actually turned that mission into a fund for St. Jude. And he actually raised over 240 million for St. Jude as part of that mission, which is just unbelievable. And in essentially one campaign that he personally ran. Um, so we just have really good alignment with, with their leadership team there and them as a company wanting to, to grow and service more nonprofits.
Mike (42:54):
Wow. Were you guys looking to get acquired at this point or was it, you know, did it just sort of materialize for you?
Alex (43:01):
A little bit of both? Okay. Um, yeah. Yeah, it was a little bit of both. I mean, for us, we were only going to sell to someone if we thought it was the right partner. And if we thought they were gonna help us achieve our, our goals more quickly than we could on our own. So it's funny, pat and I always joke, like when we first came up with a giving block, there was essentially, you know, two things we wanted to do. We wanted to help nonprofits when it came to crypto and we wanted to push along crypto adoption more broadly. Um, and shift four is allowing us to do both of those things in a, on a much larger scale and much more quickly. Um, so we couldn't have found a, a better partner that lets us hit on both of those goals in a way that we, I mean, we really couldn't have done before.
Alex (43:44):
I mean, we have way more resources than we've ever had before now. And for the most part, you know, the giving block's gonna keep operating as its own brand relatively independently, but with all the fire power of shift for were behind us, helping us scale and grow more quickly and, you know, sure we, we could have kept going at it on our own, but I think this just allows us to have a way, way larger impact on the nonprofit space and on crypto adoption more broadly than if we kept going at it on our own.
Mike (44:11):
What is the next thing for the giving block? Yeah.
Alex (44:15):
In, in some ways it's a lot of what we were already doing, but just faster and better now, the shift towards backing, you know, pat and I are still gonna run the day to day business and keep executing on the, the vision and the roadmap and, and goals that we've had. Um, but I would say, you know, we expect crypto philanthropy just to take off more than ever. Um, you know, I think this could be the first year where we see, you know, let's call it close to a billion dollars in crypto donated. Um, so it's still early days for, for crypto and we're really excited to be bringing more nonprofits into the fold. You know, I think we'll add, you know, let's call it roughly 5,000 new nonprofits to our platform this year, which sounds like a lot, but in the grand scheme of things is still relatively early days when you think about the whole nonprofit market. So that's really exciting for us. And, and, you know, like we briefly talked about earlier, you know, we really want to kick this thing off big with this new campaign that we'll be announcing soon that we expect to be the biggest, you know, crypto fundraising campaign in history. What
Mike (45:15):
Do you think the, the future is for cryptocurrencies in general, the blockchain and its role in the social sector?
Alex (45:22):
I mean, I think this will really be a, a breakout for a lot of different crypto use cases, both in the social sector and, and more widely, we're certainly starting to see a lot of use cases out side of just donations too, when it comes to crypto. So for example, you know, there's some nonprofits doing pilots for cash distribution, um, as a, essentially a more efficient way of delivering aid on the ground, because they're able to directly send an end recipient cash or a trusted party. That's gonna distribute that, that crypto for cash. Um, so a lot more cases beyond donations, you know, for some organizations, I think they're viewing it as, you know, donations to kind of step one. And then they start to think about what else can we do with crypto. So a lot of them are thinking through those types of use cases, but, you know, I think it's probably a long time still, at least a couple years before that becomes common for us.
Alex (46:10):
You know, we kind of have the approach of, you know, let's take it easy, start slow, start with crypto donations, right. Don't get ahead of yourself. We have nonprofits sometimes coming to us and they wanna start their own cryptocurrency, or they wanna launch a Dow or something like that. We're like, all right, well, let's, let's take this slow, right? You guys haven't even started accepting crypto donations yet. So, you know, it's funny because when people get excited about crypto, they get, so are we excited about crypto? And we so often have to kind of like be the, the fun stoppers of like, no, let's like, let's take it a step back, right. And not go like too deep into the, the crypto deep end too quickly, because ultimately like, there's a lot of things non-profits have to be thinking about crypto. Isn't the only thing. Um, so making sure they still have a balanced approach where it's not, you know, crypto shouldn't be something that's taking over the whole organization and all they talk about or think about still a lot of other factors.
Mike (47:03):
What do organizations need to look out for or common mistakes that are made concerns that they wouldn't necessarily think of off the bat?
Alex (47:09):
I mean, of course my answer's gonna be biased because I'll say that we've tried to minute, most of those kind of risks and concerns from a product perspective. But what we see on kind of an executional side of things would be kind of what we talked about earlier of like some nonprofits will get set up to accept crypto and then just like refuse to talk about it. And like, not even once post about it or announce it, no matter how often we'll, we'll give them some guidelines and some templates and stuff to help them with. So that's a common mistake in sort of pitfall and then a week into it. They're like, why haven't we gotten new donations? And it's like, well, it's only been a week and you also haven't even told new one yet. Um, so that's a relatively common scenario, not common, but, but we see that occasionally.
Alex (47:51):
And then some of the other stuff would just be using us enough. Like we're really here to help nonprofits kind of navigate the world of crypto. So like we'll have nonprofits sending us ideas on like, Hey, we had this donor reach out and they want to give us, you know, 1 billion of this new coin that has some ridiculous and is brand new. And then we've gotta tell them, unfortunately, that you can't actually accept this because it's not actually worth anything um, so just kind of like making sure they're being thoughtful when they start taking crypto, if they do have donors reaching out with what seem like maybe unusual requests, um, kind of making sure they, they come to us with that so we can vet some of those opportunities for them.
Mike (48:29):
Gotcha. I think that's, that's actually a big one, you know, with crypto sort of being in the wild west phase of the moment, I'm sure there are tons of people out there trying to pump their own coins or whatever. Um, yeah. And making sure there is actually a publicly accepted valuation to the coin before bending over backwards. So accept it is probably an important move, I think.
Alex (48:48):
Yeah. And they'll all tell you right, their coin's gonna be the next Bitcoin,
Mike (48:51):
Right? Right.
Mike (48:53):
Yeah. Maybe not the do guys, but everybody else.
Alex (48:55):
Yeah, exactly.
Mike (48:57):
I'm curious about your upbringing a little bit. Was philanthropy woven into, you know, your childhood? Was it important to your folks?
Alex (49:03):
Yeah, I mean, in terms of my up upbringing was like in a pretty typical middle class family. My dad was a realtor. Um, my mom worked as an assistant, so pretty typical middle class jobs, both parents were working, um, but always a very like entrepreneurial mindset. I would say with my parents, um, like my mom always had like some side hustles going on where she was thinking of new business ideas and trying to figure out a way to just make a little bit of extra cash on the weekends or after work and, and things like that. So that was a lot of the, the conversation around the dinner table and things like that. Um, and yeah, they, they of often did talk a lot about giving back, even though we didn't necessarily have the means to make like huge donations or like, my mom still will text me now and ask me like, if I've come across any new non that I just like really love. Cause she's always interested in learning more about new nonprofits that I can recommend to her and that she can research. Um, so it was something we, we often did talk about and, you know, it was kind of like our, our dream to kind of start a company like this. Um, and they were always, you know, really supportive of like, yeah, just, you know, if you were work hard enough, like I'm sure you can be successful in starting your own company. And you know, here we are kind of,
Mike (50:18):
Did you do any volunteering or, or impact work as a, you know, kid or high school kid?
Alex (50:23):
Yeah, but I would say it was, um, like the kind of the typical stuff a lot of people do in high school and college, right. Like volunteering at like habitat for humanity or a soup kitchen here and there, things like that. Um, so it, it was part of my life, but I, you know, honestly wouldn't say it was necessarily a big part of my life until I got to college and even, you know, more so after I graduated college,
Mike (50:45):
What are some of the most important causes that humanity needs to tackle right now?
Alex (50:51):
Yeah, I mean, mine kind of goes back to what got me excited about crypto kind of this topic of human rights has been something that I'm always really interested in and how technology can really empower people. And right now I think Bitcoin and crypto are one of the most important technologies when it comes to human rights and empowerment, especially in developing countries. I just think there's so much sort of untapped potential when it comes to emerging technologies like Bitcoin and crypto, like we talked about earlier, right? With like Venezuela Afghanistan, and particularly in countries where there's either a corrupt government, an unstable financial system or currency, and they've got hyperinflation. Like those kinds of places can benefit the most, usually from something like Bitcoin and crypto. So I'm really interested in, in personally working with groups that are tackling that, um, and, and looking at ways to help people in those countries.
Mike (51:44):
What's the path not taken for you if you weren't, uh, a social entrepreneur working at the giving block and launching crypto out to the social sector and, and beyond what do you think it is that you'd enjoy doing? And, uh, you know, how, what, what's the, what do you think your career might have taken you if not for this?
Alex (52:03):
You know, I, it's hard to say. I mean, I, I certainly probably would've stayed some sort of management consulting role for a while until I figured out what I wanted to do. Essentially. I always saw that as sort of a stepping stone to help me learn about a lot of different roles in industries until I knew exactly what I wanted to do. Um, I always knew I wanted to start a business at, at some point, I just wasn't sure what the business was be yet. And I saw consulting as kind of the perfect place to start to get ideas and to learn as much as possible, as quickly as possible. So I wouldn't be surprised if I was, uh, you know, still a consultant, otherwise kind of waiting for the, the big breakthrough idea.
Mike (52:45):
Gotcha. Any big hobbies or things you do in your personal life that, you know, our passion projects for you?
Alex (52:51):
Um, you know, pat and I always joke that, you know, unfortunately we've, we don't really have any hobbies anymore right now. Um, but when it, you know, comes to things I, I do enjoy doing like, you know, after work or on the weekends, like certainly big focus on just getting outside, getting some fresh air in the sun, going for a walk exercising. Um, that kind of stuff is, you know, some of the most relaxing for me. Um, especially I moved to Miami recently. So, you know, it's great to go for a walk along the, the Miami river here or something like that at the end of a day, or, or go to the gym or hang by the pool or something like that.
Mike (53:29):
Yeah. What prompted the move outta curiosity?
Alex (53:31):
So part of it was simply because this is kind of the place to be now for crypto entrepreneurs. Um, there was just like a huge, almost like a, a mass migration of, of crypto and tech people from a lot of different place is all around the country to Miami and, and more generally south Florida, um, it's really become quite the tech and crypto hub. I have a ton of friends who have moved down here and just from even a work perspective, it just made sense to, to come down here and be around that community of entrepreneurs and, you know, the, the nice weather doesn't hurt either.
Mike (54:04):
All right. Well now the easy one, you know, how, how, uh, if, if organizations are inspired to take on crypto and use that as a fundraising channel, like how do they get signed up with a giving block?
Alex (54:13):
Yeah. So easiest way is to go to our website, the giving block.com. Um, and then you can, you know, click on the 15 different buttons we have around the website that ask you to book a demo. Um, that's the easiest way to get in touch with us. And if you fill out that form, we'll essentially have someone on the team reach out, they can book a 30 minute session with you, one on one, give you a rundown of how everything works, run you through what it's like to make a donation, um, and, you know, give you all the details that you would need to, to make a decision if, if crypto's right for your organization. And yeah, otherwise I'd say follow us on social media, Twitter, of course, being our most active channel. Um, and then signing up for our, our weekly newsletter at the bottom of our website. I would just say as one last plug that you know, crypto is not as, as complicated as you might think it is when it comes to getting set up to start accepting crypto. So I would say don't be turned off by the other idea of accepting crypto, if you're just worried about it being too tactical or, or too complicated,
Mike (55:10):
You know, I, I know that you guys are early stage still. It's amazing that you sold already at, at this, this early juncture, but excited to see the potential and, and what comes next. So, yeah, thanks again for sharing your time and insights.
Alex (55:21):
Awesome. Thanks for having me, Mike,
Mike (55:26):
That's our show for this week as always, there's more information in the show notes, please check them out at causeandpurpose.org. Thanks for listening. We're gonna be doing something a little bit different next week. We'll have not just one founder, but two and enjoying a few cocktails while we record our guests will be the founders, activists and all around wonderful people, geeking out about inclusion stem and how we get greater are access to philanthropic support for minority founders from black girls hack and Cyber Jitsu, Tanisha Martin and Mary Galloway. Hope you can join us with your favorite beverage in hand until then. Cause and purpose has been a production of moonshot.co on behalf of myself, Alex, and our entire team. Thank you for listening. And we look forward to speaking again soon.
