14 Differences between Crypto & Traditional (fiat) Donors

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For many nonprofit organizations, the rise of crypto philanthropy has been a shock that seems to have appeared virtually overnight. The truth is that Bitcoin, the leading cryptocurrency by market capitalization, began in 2009 and so too did the genesis crypto culture. Now, in 2022 Pew Research surveys show that 87% of U.S. adults have heard of cryptocurrency and 16% have actually invested some amount (Pew Research Center).

The 2022 crisis in Ukraine has shown that the crypto community can be moved to give at unprecedented levels as some estimates show that over $80M has been donated in just the first month of the conflict (Crypto Donations for Ukraine Cross $83 Million Led by Ethereum & Bitcoin). This article goes through some of the larger trends and audience research around cryptocurrency owners. We try to identify general demographics and insights about how this might relate to a growing crypto philanthropy donor base. We also use some terms like “fiat” (Government-backed money), “getting rugged” (ripped off by a project), “mooning” (rapidly increasing in value) and others along the way, sorry for the jargon but don’t worry WAGMI (we’re all going to make it).

1. Crypto donors don’t wear tinfoil hats

Typecasting and generalizing any audience, especially donors, is a road to ignorance and will almost certainly hurt an organization’s ability to capitalize on this movement. Adoption of cryptocurrency is hitting mainstream adoption and as the data cut across many segments of the population. There are roughly 49 million crypto holders in the U.S. (~13% of population) meaning this is still early in the larger adoption cycle (A Harris Poll from August 2021). Remember the quote: “First they ignore you, then they laugh at you, then they fight you, then you win.” – Mahatma Gandhi. Cryptocurrency is currently transitioning from the ‘laugh’ to the ‘fight’ stage as the Federal Government is making plans for measured regulations. All that said, yeah, there might be a few more folks investing in bunkers and stockpiling canned goods in case the government collapses in this market segment.

2. Crypto Donors are 2X more likely to be male

The age and gender of crypto owners skews significantly towards men ages 18-29 when compared to the overall U.S. population. This cohort reportedly has 43% of the population saying they own some amount of crypto. The general population across all ages showed that men (22%) are more than 2 times more likely to be crypto holders than women (10%) (Pew Research, 2021).

3. Young people 4X more likely to hold cryptocurrency than older generations

When analyzing an existing donor list, the most predictive indicator of crypto holders is probably age based on Pew Research data. The breakdown of crypto holders by age shows a steep cliff at age 50:

18-29: 31%
30-49: 21%
50-64: 8%
64+: 3%

4. Young crypto donors are more likely to be nonwhite/caucasian

According to the Pew data “Asian, Black and Hispanic adults are more likely than White adults to say they have ever invested in, traded or used a cryptocurrency.” The survey showed the following distributions of percent young (18-29yrs old) crypto holders category:

Asian: 23%
Hispanic: 21%
Black: 18%
White: 13%

As a larger narrative, USA Today reported in August 2021 that traditionally marginalized communities actually see crypto as a new path to wealth (Black, Latino, LGBTQ investors see crypto investments like bitcoin as ‘a new path’ to wealth and equity).

5. Potentially counter-cyclical giving due to tax implications

Crypto markets are more volatile than Henry Winkler in a swarm of bees. This volatility may become a huge difference from traditional fiat giving trends that show that Q4 is when most donors choose to give and lock in profits/losses in equity markets. On any given day a coin may ‘moon’ (rise quickly) and trigger a donation of that coin because of the tax implications for the owner. By donating the currency directly to a nonprofit, the donor receives that full value of tax deduction at that price rather than dealing with the capital gains and transfer costs of moving to fiat money (Tax Help – The Giving Block).

6. Globally-minded giving – it’s a small world after all

The outpouring of support for Ukraine from the global crypto community is just one example of this global mindset. Cryptocurrency is connecting people across a monetary and organizational belief system that crosses boundaries and isn’t restricted by fiat currency giving rules. The common filter bubbles created by Facebook algorithms are no longer in play for DAOs and communities being connected through millions of chat rooms on Discord, and #cryptoTwitter.

7. Belief in community-run/owned decentralized structures

One of the rising trends in crypto projects are DAOs, or Decentralized Autonomous Organizations. These structures allow people to collaborate in a trustless environment without the need of traditional bureaucracy or centralized authority. Pushing ownership to the community members is a fervent belief talked about by top thought leaders on podcasts like Bankless (leading Ethereum podcast).

Consider how your organization’s narrative may map to these values of giving power and voice to stakeholders that have been traditionally ignored by financial institutions.

8. Potentially anti-government, anti-bank, anti-censorship & anti-centralized authority

The preferred structure that many projects move toward in crypto is DAOs, which deliberately pushes power to the community. Another macro trend that has caused increased crypto adoption is the fact that the U.S. printed 40% of the total monetary supply during the pandemic.
Here are some themes from the leading Ethereum podcast Bankless:

Keep in mind that there are many motivators and that it shouldn’t be assumed that all holders subscribe to these generalized beliefs. However, in order to make the leap to holding cryptocurrency over fiat, there must be some kernels in these investment narratives.

Think about how the narrative of your organization may fit into helping marginalized groups that may have traditionally been taken advantage of by a centralized authority. Identifying the systems and structural racism inherent in some institutions may align an organization a lot more with a crypto donor base.

9. Keen on transparency due to the nature of the blockchain

While the perception of crypto may have been tainted by the historical connection to the Silk Road illicit market where anonymity was king, the truth of this technology is very different. Blockchain technology allows the public to track every wallet and transaction that occurs. Tools like Etherscan.io and companies like Chainalysis are making it easier by the day to track these transactions.

In early 2022, the Federal Government was actually able to find two alleged criminals that stole $4.5B in crypto from Bitfinex by tracking these wallet transactions. How does this translate to crypto donors? In a word – transparency. These donors are used to seeing where every unit goes and what it does, consider how this may play into a communication and impact narrative.

10. Belief in credibility over celebrity

Building on the idea of transparency, crypto holders are also likely to have been rugged (ripped off) by at least one coin or NFT project in their adventures. They are used to looking at the team behind a project and the other verifiable elements that speak to the validity of a project/coin/organization. Consider how this kind of confidence can be conveyed beyond ‘we have this celebrity endorsement’, which is becoming a hallmark of crypto scams.

Crypto donors may be more interested in the ‘team’ behind the work than traditional donors due to this lived experience.

11. Crypto donors will probably give more

The Giving Block, the leading crypto donation platform, reported that the average gift received through their platform in 2021 was $10,455, an increase of 236% from the previous year (2021 The Giving Block Report). In a Whole Whale podcast interview, the Giving Block co-founder Pat Duffy, he explained that “There’s too much money out there. So every client we work with, even on the lowest end there’s an active strategy. So as a result, five-figure programs are the norm. And we’re about to have 200 programs that are six-figure plus. They’re getting this from mostly new donors.”. (Disclosure: The Giving Block is a client of Whole Whale since 2021)

Keep this in mind when creating a separate donation page and flows for donors that may give a lot more than a default $100 that happens to be on a giving form.

12. Collective giving is more common

Crypto communities are tied together through Discords, NFT communities, DAOs, Twitter, rituals and a shared belief in the value of the assets they collect. NFTs (non-fungible token) fundraising projects are increasingly common and allow groups to collectively buy into a project that benefits a nonprofit. DAOs also make it incredibly easy to pool money from a group of people that can then vote in a measurable way to designate funds. Consider how your crypto donor strategy may leverage reaching out to groups rather than just individuals.

13. Different Terminology

Jargon jargon everywhere, but not a drop to drink… Becoming familiar with the commonly used language in the crypto community may help with communication designed to reach that audience. It can also be a way to signal that you ‘get it’ as well as communicate more effectively with these donors. Here is a handy list to get you started.

14. Crypto donors are likely to be more tech-savvy

It takes knowledge and faith in new tech to move fiat money to cryptocurrency. Especially for donors that take custody of their own wallets, there is a steep technical learning curve with a high risk of ruin if done wrong. This group may also be more familiar with wading through the tons of documentation involved in the many white papers/road maps behind projects they invest in.

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