The Web3 space and its components have various use cases and charity works aren’t exempted as Web3 could play an important role for nonprofit organizations, especially in the aspect of fundraising. With tools like blockchain technology, these organizations can raise funds more effectively and faster while ensuring transparency. This article explores different steps nonprofit organizations can take to raise funds using Web3.
Accepting Crypto Donations
This step is pretty straightforward as your nonprofit organization is simply adopting crypto payment as one of the ways it receives funds from donors. This move could establish your organization in the Web3 space and project it to potential donors in the crypto community who will be more than willing to donate to your cause since they are allowed to make donations in crypto. Members of the crypto community generally feel endeared to projects that are willing to adopt crypto in their operations, and as such, this is the easiest way to warm your way into their hearts.
Create a Crypto Token
Creating a crypto token is an excellent way to raise funds. You can create the token on any blockchain network, with Ethereum’s ERC-20 tokens being the most popular. Once you have created the token, you can run an Initial Coin Offering (ICO) to raise money immediately for your nonprofit organization. ICO is a form of crowdfunding in which a business sells its cryptocurrency to raise capital (In this case, to raise funds for your nonprofit organization)
For such tokens, it is best to provide investors with some form of utility around your token or at least, try to generate lots of buzz around them. You can check how to promote your project here.
Furthermore, you can establish your token as a utility-based one that you and holders can use for other purposes. In your case, you can use it as your organization’s currency. You can use it to incentivize team members and volunteers or as a reward for a campaign geared towards raising awareness for the organization and getting well-wishers to donate. For holders, you can grant special perks or allow their tokens to give them access to services rendered by the organization. Your token can also serve as a governance token whereby the largest holders form a part of your DAO, which makes decisions that relate to your blockchain-based operations.
Examples of Defi charity projects that you can model your operations after are Aquari, Save The World, Munch, and World of Waves. For instance, the World of Waves network has a $WOW token that it uses to fund its philanthropic activities. The token charges a transactional tax of 11% with 4.4% of the tax being autonomously sent to the $WOW charity wallet.
Launch a DAO for Transparency and Accountability
A decentralized autonomous organization (DAO) is a body, with no central authority and members who are committed to acting in the best interest of the organization. For Web3, DAO members typically consist of token holders who participate in the management and decision-making of an entity. Take it being similar to the ‘Board of Directors of a company but for Web3 projects. The DAO can help ensure that your nonprofit organization is transparent and accountable for all funds raised through your blockchain-based operations. As these DAO members will typically consist of crypto enthusiasts, they can also make decisions that can strategically position your organization in the Web3 space and bring in more funds for your worthy cause.
Launch an NFT Collection for Fundraising
Unlike Crypto Tokens, A Non-Fungible Token (NFT) is a unique digital asset on the blockchain, one that cannot be exchanged for substituted for another. Crypto enthusiasts consider it more valuable than their fungible counterparts and are always willing to pay more for NFTs. As such, your nonprofit organization can partner with digital artists to create eye-catching artworks or digital collectibles that you can tokenize on the blockchain and allow the general public to mint (buy) them. Like Fungible tokens, it is best when you provide some form of utility to go with these artworks or digital collectibles. You can also go further by partnering with an agency like Anybodies to bring your web3 experiences to life. These immersive experiences could portray your vision for the nonprofit organization in the metaverse and how NFT holders can partake in it.
There are different use cases for NFTs you can explore and you don’t necessarily need to limit yourself to those options. Who knows? You could build a blockchain-based game that is centered around your charity works and encourages users to participate one way or the other.
There are numerous advantages of launching an NFT collection; It is a great way to continually generate funds for the organization through creators’ royalties – Creators’ royalties are fees that NFT creators receive whenever any NFT from their collection is resold; You also get the opportunity to raise awareness around your nonprofit organization and build a strong following among members of the NFT community.
Partner with Web3 Companies
Finding your way around the Web3 space can be a daunting task. As such, an easier way to get involved is to partner with Web3 companies, especially ones that share similar goals or ideologies with your nonprofit organization. Considering that these Web3 companies are already established, they can give you brand exposure and an opportunity to reach a larger audience.
Web3 undoubtedly provides an opportunity to raise more funds for your nonprofit organization. There is no need to however get overwhelmed by some of the technicalities in the space. You can begin the journey by accepting crypto donations and with time, you will get conversant with the workings of the Web3 space.
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