Charities wade into NFT craze with mixed financial results

Dec 29, 2021, 9:06 AM | Updated: 9:12 am

On GivingTuesday, officials at New Jersey-based health care charity Sostento learned they would receive a donation of roughly $58,000 by the end of the week.

The donation was unlike any the nonprofit had received before. It was derived from the proceeds of the sale of a nonfungible token, or NFT, for a digital artwork called “The NFT Guild Philanthropist — Healthcare Heroes.”

You’ve likely heard of NFTs. They’re built on the same technology that underlies digital currencies like Bitcoin and Ethereum. These digital assets shot into the limelight in March 2021 after Mike Winkelman, known by his artist moniker Beeple, auctioned off an NFT for $69 million at Christie’s. Think of an NFT as a deed or token associated with a work of digital art, like an image, an audio recording, or a video. That token can be used to keep track of the file’s provenance and sale history, allowing someone to prove ownership of the asset.

While the technology was created to give artists more control over their work, NFTs have spawned a frenzy as collectors look to cash in. As that speculation intensifies, a growing number of charities have begun to explore fundraising efforts tied to NFTs. Although some NFT charity auctions have yielded eye-popping sums, others have had limited success. Complicating matters, NFTs use new technologies that are generating lots of questions for accountants and regulators.

The “Guild Philanthropist” NFT sold for 6.3 Ethereum, the equivalent of roughly $28,000. The artist provided a donation to match the sale price. For Sostento, accepting the donation was fairly simple. The organization worked with Giving Block, a nonprofit that helps other charities accept cryptocurrency, to convert the crypto into U.S. dollars. The NFT will also continue to benefit charities in the future. It was created with a provision that obliges proceeds of future sales to be given to charity.

But there is still a steep learning curve associated with NFTs and cryptocurrency, said Joe Agoada, CEO of Sostento, which develops software and communication products for the health care industry. Accountants advising Sostento cautioned against accepting NFTs and other cryptocurrency directly. Working with an intermediary to convert the NFT proceeds from ones and zeros to dollars and cents was crucial.

“It took a long time to understand how we could actually make this possible,” said Agoada.

Sostento wasn’t the only group to see a windfall from these novel tokens last week. Officials at Giving Block said they helped process roughly $1 million in charitable donations on GivingTuesday derived from the proceeds of NFT auctions. And on Dec. 7, Giving Block will launch the inaugural NFTuesday, a day focused on driving more NFT-derived philanthropy.

Some nonprofits have entered the NFT fray as a way to reach a broader audience.

In July, officials at Save the Chimps, a chimpanzee refuge in Fort Pierce, Florida, scanned finger paintings done by three of its residents: Cheetah, Clay, and Tootie. From those scans, they created a series of NFTs and listed them for auction on Truesy, an NFT marketplace. Think of them like prints of a photograph. They were priced to sell at a value equivalent to about $25. Save the Chimps set up its NFT to provide a royalty to the charity in the event of future sales. The fundraising haul so far? Just a few hundred dollars.

“The exciting part was they were all first-time donors,” said Sara Halpert, the group’s marketing director.

That’s the appeal for many charities that have started to dabble in the world of NFTs and, more broadly, cryptocurrency. These collectors and investors could be a valuable new audience for fundraisers to tap, said Pat Duffy, CEO of Giving Block. They tend to be richer-than-average, financially savvy younger donors who are very active online.

“These are people a major-gifts officer should be connecting with and talking to,” said Duffy.

It’s less common for donors to give NFTs directly to nonprofits, but that’s happening, too.

Earlier this year, entrepreneur Eduardo Burillo donated an NFT titled “CryptoPunk 5293” to the Institute of Contemporary Art, Miami. The work, which is part of a 10,000-piece series, depicts the pixelated avatar of a person sporting a short-bob haircut, pink lipstick, and a Mona-Lisa-like expression. As of Thanksgiving, the average sale price of a CryptoPunk was just under $500,000.

While NFTs may seem novel as an instrument of philanthropy, the assets tied to the tokens are similar to other forms of ephemeral art, such as performance art, video art, or art installations, said Alex Gartenfeld, artistic director at ICA Miami.

ICA Miami’s case is unique, at least so far. No other museums have yet accepted NFTs into their collections.

The biggest challenge for nonprofits — especially those that wish to hold an NFT as an asset — is that the existing accounting rules don’t really address NFTs, says Brian Mittendorf, a professor of accounting at Ohio State University who focuses on nonprofits. The NFT is technically different from the artwork itself, which raises heady questions about what is and is not being valued, or even what could be considered part of a museum’s collection.

“It captures both the challenges of charities dabbling in the cryptocurrency realm coupled with the challenges of charities seeking to raise funds off of things that are hard to value,” Mittendorf said. “There are just open questions from an accounting standpoint.”

Regulators, including the Securities and Exchange Commission, are beginning to examine how and when to treat NFTs as collectibles or securities. The eventual result of those decisions could have ramifications for charitable-accounting offices.

Charities are also experimenting with NFT-based fundraising in ways that go beyond the realm of digital art.

Environmental group Beneath the Waves, which focuses on ocean conservation, is auctioning off dozens of NFTs that each represent a real-life shark tag, with starting prices ranging from $500 to $20,000. The owners get the right to name their tagged shark and will receive updates on its movement through the oceans. One of the NFTs entitles the owner to take part in the group’s marine-research efforts in the Caribbean. Bidding closed at $23,000., a new organization, is using NFT auctions to raise funds to buy land for reforesting efforts in the Amazon. For each donor who gives a minimum donation of 1 Ethereum, equivalent to approximately $4,400, the group will create an NFT entitling the owner to receive periodic updates about the land they have helped purchase. So far, the effort has raised nearly 60 Ethereum, equivalent to roughly $241,700 as of this writing.

“You basically buy a photo of the land,” said Robbie Heeger, CEO of Endaoment, a charity that sponsors donor-advised funds built on the Ethereum blockchain and helps other organizations accept crypto gifts. Endaoment helped Rewilder establish the campaign.

“It’s another way to basically involve your donor community in a sense of attachment and ownership over the work that’s happening at the nonprofit,” Heeger said.

Save the Chimps had environmental concerns about fundraising with NFTs. The computing process to maintain records of crypto transactions consumes a lot of energy. Those worries have led some organizations to reconsider accepting digital currencies as donations. Earlier this year, Greenpeace announced it would stop taking Bitcoin donations, for example.

Save the Chimps opted to list its NFTs on Truesy, which trades on Tezos, a digital-currency network that uses a less-energy-intensive process than Ethereum to perform the complex computing needed to prove ownership and provenance of a digital asset. In other words: These NFTs are greener than average.

The charity remains interested in the future of NFTs and their utility for philanthropy, said spokesperson Seth Adam. Whether that means featuring NFTs in its annual auction or collaborating with other artists, he said, “We are always looking at new NFT opportunities.”


This article was provided to The Associated Press by the Chronicle of Philanthropy. Michael Theis is a writer at the Chronicle. Email: [email protected] The AP and the Chronicle receive support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP and the Chronicle are solely responsible for all content. For all of AP’s philanthropy coverage, visit

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Mourners carry the body of a victim of a mosque bombing in Kabul, Afghanistan, Thursday, Aug. 18. 2...
Associated Press

Police: Death toll in Afghan capital mosque bombing now 21

KABUL, Afghanistan (AP) — A bombing at a mosque in the Afghan capital of Kabul during evening prayers killed at least 21 people, including a prominent cleric, and wounded at least 33 others, eyewitnesses and police said Thursday. There was no immediate claim of responsibility for the attack Wednesday night, the latest to strike the […]
48 minutes ago
FILE - Kimi Raikkonen, of Finland, pauses during a news conference in Concord, N.C., May 20, 2011. ...
Associated Press

Kimi Raikkonen hits pause on retirement to race NASCAR

CHARLOTTE, N.C. (AP) — Kimi Raikkonen retired to Switzerland at the end of last year’s Formula One season and has blissfully spent the last eight months with his young family. Did he miss racing? “Not really, no,” the 2007 F1 champion said. Yet here he is, not even a full year into retirement, and Raikkonen […]
48 minutes ago
FILE - In this image provided by the Ukrainian Presidential Press Office, Ukrainian President Volod...
Associated Press

Zelenskyy to host Lviv talks with UN chief, Turkish leader

LVIV, Ukraine (AP) — Ukrainian President Volodymyr Zelenskyy is due to host the U.N. chief and Turkey’s leader Thursday for talks on the recent deal to resume Ukraine’s grain exports, the volatile situation at a Russian-occupied nuclear power plant and efforts to help end the nearly six-month-old war. U.N. Secretary-General António Guterres arrived Wednesday in […]
1 day ago
Taiwanese soldiers operate a Oerlikon 35mm twin cannon anti-aircraft gun at a base in Taiwan's sout...
Associated Press

US to hold trade talks with Taiwan, island drills military

HUALIEN, Taiwan (AP) — The U.S. government will hold talks with Taiwan on a wide-ranging trade treaty in a sign of support for the self-ruled island democracy China claims as its own territory. The announcement Thursday comes after Beijing held military drills that included firing missiles into the sea to intimidate Taiwan following this month’s […]
1 day ago
A currency trader watches monitors near screens showing the Korea Composite Stock Price Index (KOSP...
Associated Press

Asian stocks follow Wall St down after Fed inflation report

BEIJING (AP) — Asian stock markets followed Wall Street lower Thursday after the Federal Reserve said U.S. inflation is too high, suggesting support for more aggressive interest rate hikes. Shanghai, Tokyo, Hong Kong and Sydney declined. Oil prices edged higher. Wall Street’s benchmark S&P 500 index lost 0.7% on Wednesday after notes from the Fed’s […]
1 day ago
FILE- Los Angeles Lakers forward LeBron James (23) goes up high to dunk the ball during the first h...
Associated Press

LeBron James inks 2-year, $97.1 million deal with Lakers

LOS ANGELES (AP) — LeBron James has agreed to a two-year, $97.1 million contract extension through the 2024-25 season with the Los Angeles Lakers, his agent announced Wednesday. Klutch Sports CEO Rich Paul said the league-maximum deal makes James the highest-paid player in NBA history. His new deal includes a player option that would keep […]
1 day ago

Sponsored Articles

Mayo Clinic Orthopedics and Sports Medicine

Why your student-athlete’s physical should be conducted by a sports medicine specialist

Dr. Anastasi from Mayo Clinic Orthopedics and Sports Medicine in Tempe answers some of the most common questions.
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Vaccines are safe if you are pregnant or breastfeeding

Are you pregnant? Do you have a friend or loved one who’s expecting?
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
Charities wade into NFT craze with mixed financial results