Thoughts from The Inc. Tank | Wake Alums Helping Colleges and Nonprofits Attract Cryptocurrency Donors

May 19, 2021

The Inc. Tank logoby Christina Elson

A few years ago, when tech entrepreneurs and Wake Forest graduates Alex Wilson and Pat Duffy began exploring the prospect of helping nonprofit institutions attract cryptocurrency donations, they quickly bumped up against two hurdles: First, colleges and other nonprofits were flummoxed by what do to about Bitcoin and other cryptocurrencies; and second, potential donors with significant holdings in cryptocurrency did not fully appreciate the tax benefits of donating crypto to their favorite schools or charities.

Where others might have seen insurmountable obstacles, Wilson and Duffy saw opportunities. If nonprofits could come to recognize that cryptocurrency could help them raise unprecedented amounts of money and prospective donors could come to realize that cryptocurrency contributions offered incentives that far outstripped the tax benefits of cash, stock equity, or credit cards, a business enterprise could take root. Thus, a new offering was born. They called it The Giving Block.

Wilson and Duffy outlined the challenges facing The Giving Block and dispelled some of the myths surrounding cryptocurrency in a recent episode of The Inc. Tank, the podcast I cohost with tech entrepreneur David Yang.

Their firm’s name pays homage to the Blockchain technology that helped trigger the evolution of Bitcoin and other cryptocurrencies, while also acknowledging that cryptocurrency will enable donors to make big contributions to nonprofits. If it all goes according to Wilson and Duffy’s plan, the holiday parties sponsored by a nonprofit’s development office will be livelier in the years to come.

Why? Because unlike grants of stock, donating Bitcoin and other cryptocurrency has no capital gains implications. And because Bitcoin, having sextupled in value in the past five years or so (from some $260 billion to $1.5 trillion), is the single-best appreciating financial asset of the last decade.

Wilson and Duffy point out that about half of all millennial and Gen Z investors are invested in cryptocurrency, with that number increasing every day. Nonprofits that don’t open up to cryptocurrency donations are squandering a huge opportunity to access this growing funding source and engage with new, younger, and socially active donors.

How lucrative is crypto these days? So lucrative that Jack Dorsey, the founder and CEO Twitter, made more money from buying and selling Bitcoin last year than he did from all his various Twitter holdings.

What was the genesis behind The Giving Block? Duffy ties it all back to his frustration with the lack of innovation in the nonprofit sector. He believes that the lack of economic incentives to fuel such innovation is strangling impact, extending the half-life of our world’s most pressing problems.

Wilson, for his part, traces it to his undergraduate days as a student at Wake Forest when hehe took a Foundations of Capitalism course. To stimulate their thinking, they read a broad range of material from Ayn Rand to Karl Marx and much in between. It was in that classroom and with his nose in those books that Wilson came to appreciate libertarian economic thinking and its role in entrepreneurship and the world of nonprofits.

This new approach means urging nonprofits to embrace 21st century thinking. Nonprofit fundraising must change to engage young donors and attract the next generation of talent. Younger donors believe that nonprofit workers should be compensated at market rate, not underpaid, and that nonprofits should solve the problems they set out to tackle and then move on to new ones, not find themselves in a never-ending spiral, devoting all their donations to programs and neglecting investments in innovation and staff.

Upon graduating from Wake, Wilson became further intrigued by cryptocurrency while studying Blockchain technology in his first management consulting role. He won over a skeptical Duffy, a Wake fraternity pal, by sharing the original white paper that animated Bitcoin. The two of them spent six months working nights and weekends to get The Giving Block off the ground – an experience that Duffy recommends for other would-be entrepreneurs.

To realize a business vision, an enterprise must go from “ideation” to “iteration,” a process that takes a while, Duffy says. If you’re able to iterate your vision after a number of months, maybe you’re on to something. If you’re not, maybe you’re not, he advises.

The Wilson/Duffy vision for The Giving Block has been so successful that they represent an impressive array of colleges and nonprofits. Each client demands its own unique strategy and approach.

What’s next for The Giving Block? There are around 1.5 million nonprofits in the United States and many more around the world, all looking to create a long-term strategy to find and engage new donors. Moving forward, cryptocurrency will continue to become an increasingly large part of that strategy, playing a defining role in which organizations develop a competitive edge.

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Listen to the podcast here or on your favorite platform.

Read more “Thoughts from The Inc. Tank” by Dr. Christina Elson on Linked In.

Christina Elson, cohost of The Inc. Tank, is the executive director of the Wake Forest University Center for the Study of Capitalism.