Transcript:
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Mark Eckerle:
Hello listeners, welcome to this episode of Cryptonomix. Before we jump into today’s discussion, please keep in mind this recording is for general education and is not intended to constitute investment advice. Any opinions expressed are those of the participants and do not necessarily represent those of Withum. Hello everyone. Welcome back to this episode of Cryptonomix, brought to you by Withum. I’m your host, Mark Eckerle, and today our guest is Alex Wilson, co-founder of The Giving Block, which is a donation at digital assets donation platform that makes it seamless for users like myself to make a donation, cryptocurrency to my favorite charity. So welcome to today’s show today, Alex.
Alex Wilson:
Hey Mark. Thanks for having me on today. Of course.
Mark Eckerle:
Well, I think a, a great starting place for us would be like, I like to kick these episodes off with just understanding your crypto journey, right? Everyone got into this space one way or another and everyone kind of fell down the rabbit hole at some point. So, why don’t you tell us a little bit about how you, you ended up basically in crypto and then creating the, The Giving Block?
Alex Wilson:
Yeah. Yeah. Happy to start with some background on that. So, essentially the way it started was before starting The Giving Block, I was kind of your more typical management consultant, but always really interested in emerging technology. And then of course as consultants you’re always selling the latest and the greatest, right? <Laugh>. Sometimes it’s a lot of buzzwords though. And, and back then the popular buzzwords were blockchain, AI, IoT, in some cases crypto too. But at that point it was really more enterprise blockchain and this was more like 20 16, 20 17. And around the same time started seeing Bitcoin and crypto mentioned more frequently and actually a lot around sort of more really like the human rights angle of it or use case, you know, hearing people talk about it of you know, kind of a, a way of opting out of some of the more corrupt government and fiat systems in South America and Africa, right?
Alex Wilson:
Places like Venezuela, you were hearing about people using it to kind of escape the hyperinflation they were seeing there. And those are the kinds of use cases that really got my attention with crypto and that’s when I really decided to go down the rabbit hole because seeing those kind of live use cases that were clearly providing value to people as what got me interested. So in 20..by 2017, I was all in. I was like, I want to do nothing but think about crypto all day every day. And, you know, was obsessed and telling all my friends about crypto and, and how amazing it was and how I was going to change the world. Second half of 2017, got some of my college friends interested, including Pat Duffy, who ultimately became my co-founder at The Giving Block. Funny enough, he was the friend in the group talking people out of crypto and I was the one talking people into crypto, but eventually he read basically the Bitcoin white paper and some other things I’d been sending him, went down the rabbit hole too. And he was working at a non-profit at the time. So the way we all were framed, it was he was essentially the non-profit guy. I was the crypto guy. And then by 2018 we decided to officially start the giving block cuz we realized what a huge donor demographic this was going to become for non-profits. And most of them just weren’t even thinking about it or, or doing anything to engage us new donor demographic.
Mark Eckerle:
Yeah. And I really think it’s, it’s funny because back in 2017, I think each year, each cycle we have, there’s a new connotation around crypto, right? And back at that time in 2017, it was the buzzword was blockchain, right? Bitcoin or any of the, these other cryptocurrency assets. That’s not the real long-term play. It’s the blockchain is the thing. So it’s funny to see, because right now I feel like where we are today, it’s current seeing the currency value as some of the other fiat currencies are starting to devalue themselves. We’re seeing more and more inflation. So you’re starting to see it as an investment play, but that wasn’t the, the sense back then,
Alex Wilson:
The slogan then was blockchain, not Bitcoin and now it’s flipped to become Bitcoin, not blockchain. Right. <laugh>
Mark Eckerle:
Curious what the next cycle is, Right? It’s always something new. Yeah. But that, that actually segues perfectly into one of my next questions because coming off that 2017 bear cycle, right, that Thanksgiving where I think really crypto is a whole became pretty popular in mainstream and a lot of people made a lot of money right around that tax year end cycle. So I think that helps segue perfectly into kind of the wind at your back of The Giving Block, right? In the 20, the year of 2018, where people are trying to figure out some tax strategies almost. So did that help kind of create the company where you’re identifying some donators or, or your target demo to figure out, hey, these people have money, they want to make donations and here’s a great use case right, in crypto because they made all this money outta thin air, right around that Thanksgiving/Christmas-time. Did that help? And then the second part of that question is, did that happen again in 2020 or 2021 with the most recent cycle? Yeah,
Alex Wilson:
The, the short answer is yes, but a couple things to kind of expand on at the end of 2017. The timing definitely helped. Fortunately we didn’t, we weren’t really ready for it at the end of 2017 though, but it kind of got us thinking about it and we saw some examples playing out. If you’ve ever heard of the Pineapple Fund, if you haven’t, definitely Google it. Really interesting story. Essentially this person or group of people, they’ve remained totally anonymous, but they posted on Reddit saying, I have made so much money investing in Bitcoin that I basically want to give it all away now. And said like, "Hey, non-profits, like applying the, the comments basically on Reddit below if you want some free Bitcoin." Obviously, everyone’s super skeptical, like could this really be real, very suspicious, especially non-profits who had never gotten a Bitcoin donation for and in a lot of cases had maybe never even heard of it.
Alex Wilson:
But turns out Pine and the Pineapple Fund donated $56 million worth of Bitcoin to about 60 different non-profits, which is amazing. So we saw this play out right around the time we were thinking through this concept and we’re like, wow, this is, this is real, right? Like this is happening and the Pineapple Fund isn’t going to be the last time someone makes money in crypto and wants to donate it. And we essentially realized, right, like, okay, well why would someone donate crypto versus let’s say fiat And you start to go through things like the IRS rules, right? Where they classify it as property versus currency, which means if you have appreciated property, like crypto donating is actually much more tax efficient, right? So for the donor, they don’t have to pay capital gains taxes, they get a fair market by deduction and the charities are tax exempt too. So it’s really a win-win where, you know, you’re probably able to donate, let’s say 20 or 30% more and your write-off is 20 or 30% higher and the charity is essentially getting 20 or 30% more, right? So, it’s a pretty amazing win-win all around.
Mark Eckerle:
What’s your target? Like your donor demographics, What does that look like? Who’s the makeup and the feel of most of your audience as far as who you’re seeing in the space?
Alex Wilson:
So it’s kind of what you’d expect in the sense that it’s a typical crypto older which we know tends to skew younger, right? So a lot of millennials in Gen Z and on average they tend to be wealthier people that have crypto. On average their income’s about 110,000 a year, which is, you know, quite a bit higher than the, the median income in the us. So it’s a really appealing donor demographic for non-profits because they’re wealthier and because they’re younger non-profits always want to engage new and younger donors especially mm-hmm. <Affirmative> since most of their donors tend to be on the older side and still mail them checks, right? <Laugh>. So this is a way for them to diversify their revenue streams, get net new donors and net new dollars. And what we’re finding is on average, people that are donating crypto are making pretty huge gifts. They’re donating on average about $10,000 per gift, which is more than 10, you know, more than a hundred times the average gift size of let’s say a credit card donation online.
Mark Eckerle:
Obviously not everyone is like the pineapple fund, but that, that’s almost like a, the one of the legacy donors, right? When you think of someone that’s a little bit more on the older generation and it’s probably just someone that fell into a ton of money on the crypto side, "Hey, I wanna do good with this."
Alex Wilson:
Yeah. And what we always say is, I mean, there’s still a lot of education to be done with donors too, just to understand the tax benefits of why they should donate crypto instead,
because so many don’t, don’t realize that if they have appreciated crypto, that’s what they should be donating instead of with their credit card or writing a check or doing a wire or whatever else. Like we’re trying to get to the financial advisors to, and wealth managers and CPAs and tax attorneys to be like, Hey, make sure if your clients have crypto and it’s appreciated that right? They’re donating their most highly appreciated assets first because it’s way more tax efficient. And I think older people might know that much better than younger people, right? Who have maybe made donations or have been investing for a longer time. Kind
Mark Eckerle:
Of shifting over to The Giving Block now, what does the product ultimately look like? Are you working with charities? Are you working with individuals? And if so, how many charities do you guys work with typically? Where’s does that look like right now? Cause the company’s come a long way, I would say in four years, right? And the crypto space one year is equivalent to like five to 10, whereas in most, most industries one year is one year. So <laugh>,
Alex Wilson:
Yeah, it definitely moves quickly and, and we’ve certainly come a long way. I mean, 2018 was a tough time to be starting. It took us two years really to get some serious traction. Now we work with roughly 2000 different non-profits and it’s all shapes and sizes, right? It could be your, your relatively small local school or church or a local chapter of a Y M C A let’s say, but also some of the largest ones in the country like Save the Children or United Way or St. Jude schools, universities, hospital networks, everything! And I would say when it comes to product, the thing that’s really made us unique in why we’ve become so, so dominant in this market is because what we do is unique in the sense that we are working on both sides of the market. Meaning we’re working with the donors and with the non-profits, almost everyone else picks one side and sticks to that.
Alex Wilson:
And this unique combination is what’s made us so successful. Because I always say we’re kind of three companies in one because we offer the, the product and the tech to make accepting the crypto easy for the non-profits and easy for the donors to donate it. But then we also have as kind of the second piece, the crowdfund platform, which has really become the place you go to find non-profits that accept crypto since we’re working with the most non-profits that accept crypto. So we’ve got the donor community there, which we then use to run campaigns like a crypto giving Tuesday or year end campaign. And then the third piece is essentially a quasi-consultancy where we’re actually training our clients on how do you engage with these donors because the way you talk to these donors is different than your 60-year-old donor who’s sending you a check, right? And we joke with them like, please do not write Bitcoin as two words on Twitter, right? Like, you’re going to scare every single donor away. And so we do training sessions with them of like where to go, how to talk to them, messaging to use, even creating marketing toolkits, all that kind of stuff.
Mark Eckerle:
Yeah, I’m sure there’s definitely a pretty significant learning curve there. I mean, I, in my, in my past life, I, I worked as an auditor at a governmental auditor or working with municipalities, townships, public schools, things like that. And just seeing the, the technological, the lack of technology I should say actually is pretty significant there. A lot of those industries are still just on papers. So work coming from government side of things and seeing where we are today and just understanding now with, with charities, because their target demos previously some of the older generations. So kind of educating them, bringing them up to speed on the technology side is probably a, a hurdle in and of itself. Yeah.
Alex Wilson:
Definitely not easy, but you know, we’re, we’re getting better and better at it too. So that’s the mm-hmm. <Affirmative>, that’s silver lining of it.
Mark Eckerle:
<Laugh>, that’s, that’s a common theme across the, the digital asset landscape, right? Just blockchain, just educating the masses, right? Just trying to get people to understand some of the use cases of the industry as a whole.
Alex Wilson:
And I’d say one mistake we made early on, and I think a lot of people made early on in crypto and and still do in the industry, is like often people when they wanna learn about something new, they get too hung up, like getting really in the weeds of how something works rather than being more focused on like why they should actually care about it and how it’s gonna benefit their use case or their organization, right? Like not every person, the nonprofit needs to understand Bitcoin mining for example, right? <Laugh>, like the fundraisers don’t necessarily need to get into that level of detail. They need to be focused more on, all right, why are we accepting crypto? Who is our kind of target demo for this? And, and those types of things, right? They don’t all need to become developers and, and understand Bitcoin mining too.
Mark Eckerle:
So what does that look like? If a charity is accepting Bitcoin, are they then holding it? Are they cashing it out? What does that kind of like the, the infrastructure almost feel like? Or do they have the option depending on who they’re partnered with? What does that as far as the plugin looks like?
Alex Wilson:
Yeah, I mean if they’re working with us, they have the option to either have it automatically converted or they can keep it in crypto and then decide when they want to sell at a later time. But you know, realistically, most of them are converting it immediately and opting for that because that’s the only way their board is letting them accept crypto.
Mark Eckerle:
I mean it’s just, it’s a very, that’s pretty common I would say, right? They just wanna have the vehicle, the means to say that they accept it and obviously all for that. But I mean as far as holding it, it’s a whole different ballgame. Yeah. Figuring out what that looks
Alex Wilson:
Like. It’s funny too because the ones who do hold it are usually the ones that have worked with us longer and have kind of seen the chart go up and to the right over multiple years, right? <Laugh> and then they’re telling us like, "Oh man, we had like a thousand Bitcoin at one point, like, you know, five years ago, whatever. And we sold them all for, you know, a couple bucks each or whatever," right? Those are the ones who are holding now who have, who have been around it for a long time.
Mark Eckerle:
<Laugh>, I wonder if it’s positive, I don’t know if you’ve seen this, if it was on the, donor-facing side where I could almost make like a restricted donation and say I want to donate this Bitcoin, they’ve got to hold it for four years just so they can see the appreciation and like almost educate them by forcing them to do it.
Alex Wilson:
<Laugh>. Yeah, we have seen that action, I would say more and more where in some cases sometimes it’s the whole thing, but in some cases they’ll say, okay, you can sell half of it now, so you’re getting some money right away. Right? But half of it you’re going to have to keep for x amount of years or until it hits a certain price. We’ve seen more and more of that. And we even launched something, I think it was in June or yeah, I think it was June with some of our DAF partners we’re working with Renaissance Charitable and if you fund a Renaissance charitable DAF account with crypto, you can actually keep it in your DAF account in crypto. So this is the first time you’ve ever been able to do this. So you could grow it in your DAF account tax-free and then add a later time grant it out and distribute it to whichever non-profit you want. So, this kind of keeps a donor in control of holding it right in this charitable account, essentially growing it tax free and then later selling it and, donating to the non-profit, which is pretty interesting.
Mark Eckerle:
Do they take the, the tax, I guess the tax piece of making that donation at the beginning Right before they make that donation at the time of donation?
Alex Wilson:
They claim it as what they would get the tax receipt for, and then whatever ends up being worth at a later time is what the charity ultimately gets.
Mark Eckerle:
Though, that’s interesting. I didn’t really know that was in existence. I like that.
Alex Wilson:
Yeah. Well, it hasn’t been for long, right? It’s been like probably <laugh> six or eight weeks since we launched that. <Laugh>.
Mark Eckerle:
Curious on what types of digital assets you guys work with commonly. I’m sure you guys, if needed, depending on the size, could, could kind of be flexible and make some functionalities depending on the donors, but what do you, what’s a typical donation made up of? Is there any NFTs in play there? I know that market has been very high for the last 18 to 24 months. Have you guys seen any of that come into play or is that still a little hands-off at the moment?
Alex Wilson:
Yeah, in terms of the types of digital assets, I mean, by default we have, you know, what was roughly 80 something in our donation products like the donation widget and api, and that’s based on what Gemini supports. There are backend exchange partners. So anything that Gemini lists we can accept by default through our products work with them to, you know, vet different cryptocurrencies. But like you said, if it’s a big enough donation and it’s liquid enough, there’s a lot more we can accept beyond that through OTC desks and things like that. So overall, there’s probably more than 200 different cryptocurrencies we can accept, but some are just not very common, so they’re not built into the product and it’s a bit more manual, but we can still handle it. And then on the NFT side, it’s been really interesting. That’s an area that’s really grown significantly and we really consider NFT philanthropy kind of its own market and strategy is like a sub-sector of crypto philanthropy.
Alex Wilson:
And we’ve seen, I would say like maybe 20 or 30% of our donations every month are in some way connected to an NFT. And what’s happening is it’s not usually the NFT itself that’s being donated, but it’s the proceeds of selling the VFT, right? So a creator says, Hey, I’m doing a new NFT drop of, I don’t know, let’s just say a thousand new NFTs and I want 25% of all the proceeds that go to no kid hungry automatically right when the auction ends. So we’re seeing things like that where they’re using it as like a fundraiser essentially. So the nonprofit never actually has to accept the NFT, but they’re getting the crypto proceeds from the NFT sales basics. And then there’s even a step further usually, right? That’s pretty unique and different than let’s say traditional art where on some platforms you can say, I want the royalties to also go to the charity so that every time it’s sold, let’s say 5% is donated back to no Kid Hunger, whichever charity the creator chose. So we’re integrating with more and more NFT platforms to make that as easy as possible for the, the creators and the owners of NFTs to kind of build this into the, the actual model of the NFT itself really.
Mark Eckerle:
Yeah. Just, just based on how the market has been, I know more and more people are getting into the n entity space and more and more things are kind of being explored upon as to what can ultimately be in nft. So I just, I I, that market isn’t going anywhere anytime soon. I just see that that could be a great potential use case for more people to make donations, right? Seeing the NFT drops and having those royalties, which I meant most of ’em I feel like are in perpetuity, right? All the secondary sales, you’re getting a piece of that. So that’s just continual passive income almost for, for a lot of these charities. Yeah. That’s, that’s the way they go.
Alex Wilson:
It’s amazing that, that like sustainable revenue stream that keeps on coming every day, week, month, whatever the frequency might be that you wouldn’t have in, in pretty much any other fundraising scenario, right? Like you couldn’t do that with traditional art. It would be impossible. <Laugh>.
Mark Eckerle:
Yeah. <Laugh> never, you’re never gonna see that <laugh>. So I’m curious now to get a couple of your success stories or or passion projects, something that you, if you have one or two of ’em that you’d like to share, just that you’ve been proud of since the inception of the company, whether it’s been a charity that you’ve worked with or a project that you guys have come on late and really delivered and executed. Just curious to see one or two things that you, you’re really excited about that really hit home.
Alex Wilson:
Yeah, I, I can think of two great examples. One is a smaller charity and one is a larger, so you’ll kind of see the spectrum, but one example is Aang Outreach, which is I would say on the smaller side of, of charities that we work with there, they’re annual budget. When we started working with them was roughly 500,000 a year. They started taking crypto with us and by the end of the first year they had raised roughly a million dollars in crypto and their budget was now about one and a half million dollars <laugh>. You know, obviously this doesn’t happen every time and it’s not easy to make something like this happen. They did an amazing job though, and what they did so effectively was when we tell our clients like, Hey, you really should be marketing this, you should be engaging community. Some, some do that more than others, right? It’s very much a thing where you, you get more out of it if you put a bit more effort into it. And they really went all in on building relationships in the NFT community when they got connected with the boarded yacht club community.
Mark Eckerle:
That’s exactly where my head was at <laugh>.
Alex Wilson:
Yep. And they ended up raising a ton of money from them and other NFT projects. Men have done this, an amazing job really going out into the community, building a brand and a name for themselves. So anytime there was something happening, they were the first charity that, you know, the Board Apes thought of. And that’s, you know, the kind of savviness that you want from a non-profit that really wants to make the most of this. So they’ve done an awesome job and they continue to do really well too. The other example I’ll give you is, is totally different. It’s American Cancer Society, which is a huge non-profit, right? Like probably top five in the country. And they’ve been working with us for a while too. And they’d actually started accepting crypto before they were working with us, but weren’t seeing much success because they were accepting crypto but not fundraising it, which we always, you know, call out because it’s a huge difference to accept it versus fundraise it.
Alex Wilson:
And they, I think raised a few thousand dollars of first year they were accepting crypto with just like something like BitPay. They switched to us and in the first year they raised a million dollars because of that more proactive approach. And one thing I always call out that they did a good job with was, you know, we’ll often email our clients and say like, Hey, we’re adding a new cryptocurrency, right? Like, hey, tweet that you now accept this. And a little over a year ago we sent that kind of email to all of our clients saying, Hey, we’re adding support for Doco. Like you should definitely tweet this out because it’s going to get a ton of reactions, a ton of press. And they were one of the few non-profits that listened and that tweet became one of their best performing tweets of all time. It went totally viral. I think it had over 10,000 retweets or something insane like that, you know, like the founder of Dogecoin is like retweeting them, encouraging you to donate. I think they got like a six figure Dogecoin donation, like all this crazy stuff started happening. So we have examples like this too, where it’s, it’s an engagement and a marketing tool just as much as it is a fundraising tool, right? Especially for these non-profits who want to get more engaged online and get more younger donors paying attention to their, to their cause.
Mark Eckerle:
Yeah. Especially when you think of the NFT community, they are such a close knit group. Like when you, if you own a Board Ape, you are a part of this community, you’re part of the discord channels, you really feel like you’re part of that team and you want to bring the space forward so that that is a match made in heaven, right? With the, the orangutang charity that you were speaking about and then some of these meme coins, I’m sure that that was just a, a fantastic marketing point, right? The DogeCoin or even the, it’s the Shibu Inu audience now is still going nuts. Exactly.
Alex Wilson:
So it’s, it’s been interesting, right? And each non-profit has its own strengths, so we’re always trying to work with them so they play to their strengths, right? Like for some, Yeah. You know, maybe it’s a more passive or active approach. Some might be better on social media, some might have a better newsletter, right? Whatever it is, you certainly still want to play to your strengths and just kind of tweak how you use that strength for the crypto community. So,
Mark Eckerle:
So if listeners wanted to learn more about the Giving Block just from even a user perspective, right? If I wanted to make a donation, you have that, that fundraising platform where I can go on and see which ones accept it, where would I, where’s the best way to contact you? Where’s the best way to find out about, more about you guys and, and ultimately reach the company?
Alex Wilson:
Yeah, so best place to go is thegivingblock.com and when you go to our website, if you’re a donor, you’ll see a button that says donate in the top right corner that’ll take you to a page that lists all the different charities. We work with roughly 2000. Now, if you’re a non-profit and you want to learn more about how to actually get set up to work with us, there’s also another button in the top right corner that says ‘Accept crypto’. So you can connect with someone on our team, book a demo, get the full rundown step-by-step of how it works. And if you just want to follow along, see what we’re up to, then I’d follow us on Twitter at the giving block.
Mark Eckerle:
Perfect. And I forgot to mention this at the top of the episode, but for, for anyone that’s watching on the video, not in audio, I did deliver on my promise. I’m wearing my Giving Block t-shirt, the Give More GM. Lovely. I know when we met up at Consensus a couple months ago, I told you, I was like, if I get some company swag, I’ll promise I’ll wear it on our episode.
Alex Wilson:
<Laugh>. Yeah. Yeah, We, man, those shirts went so quickly. We had to order more for the next conference. That was like a week later because we totally ran out of shirts.
Mark Eckerle:
<Laugh>. Well, the, the GM definitely is a, it’s a play with the crypto community too, so it’s, it’s a fantastic marketing campaign right there.
Alex Wilson:
Yeah. Props to the, to the marketing team on that one for sure.
Mark Eckerle:
<Laugh>. Awesome. Awesome. Well, I think that wraps up today’s episode. Thank you so much for joining me today, Alex. It was a great conversation learning more about yourself, The Giving Block and just how kind of educating the masses to basically figure out a more tax advantageous strategy and making the most of these assets that we have. So I appreciate you and what your company is doing to help, not just the, the non-profit community, but also again, just educating the messes and really bringing the digital assets space forward. So I want, just wanted to thank you for that.
Alex Wilson:
Yeah. And thanks for having me on and helping me spread the word! I mean, we want to get in front of as many people as possible. Yeah. We’ll do it again sometime. Awesome.
Mark Eckerle:
Thank you everyone. That concludes this episode of Cryptonomix. All views expressed in this podcast by Mark Eckerle or his guests are solely their opinions and do not reflect the opinion of Withum. This podcast is for informational purposes only.
