 Welcome, thank you for joining us. Happy St. Patrick's Day. We are thrilled to have with us our favorite Irishman, Pat Duffy. Please Google him, help him get up on the search web because he really wants to rank top. But Pat is here to join us. Pat is co-founder, in fact, with the Giving Block and he's gonna talk to us about cryptocurrency and non-profit. So thanks for joining us, Pat. And thanks for all of our viewers who are here to listen and watch again. Julia Patrick is here, the CEO of the American Nonprofit Academy. I'm Jared O'Ransom, the non-profit nerd CEO of the Raven Group and thrilled to have today's energy supported by our presenting sponsors. Thank you so much to Bloomerang, American Nonprofit Academy, Fundraising Academy, Nonprofit Nerd, your part-time controller, the non-profit Atlas, non-profit thought leader as well as staffing boutique. We are so thrilled to have you with continued support and investment from these sponsors, but not just here for the show, they're not just here for us, they're really here for you and to help you do more good throughout your community and elevate your mission. If you missed any of our 502 episodes, you can find them on Roku, YouTube, Amazon Fire TV as well as Vimeo. And of course, we are now in podcast form. So if you are a podcast listener, you like to, I like to drive and listen to podcasts, I also like to exercise and listen to podcasts. You can just say the non-profit show and we will pull up in your podcast streaming platforms and we're still working on that hologram effect so that we can show up in your living room or your office, but stay tuned, that will be coming next, yes. That's very close. So Pat, onto you buddy, we are so thrilled to have you here as the co-founder of the Giving Block and you're right, you were on with us. I don't even know when it's been quite a while but you and your co-founder, Alex, have had such great success. We're thrilled to have you back. So I'm gonna stop talking, pass it over to you and say welcome. Yeah, thanks so much for having me. Okay, talk to us about, I mean, we have a lot of questions for you about cryptocurrency, but before we move on, can you share with us what the Giving Block is and what it is that you all do? Yeah, we are a crypto philanthropy company, it's kind of how we put it, which is sort of a new thing. So it's a blend between a payments company that just like sets up organizations to handle a particular type of payment that helps donors do the same thing from their side. So like baseline technical solution stuff, but a lot of what we do on top of that is like community level activations. We run the campaigns for the crypto philanthropy sector. We built the industry giving pledge for crypto users. We built the CSR programs at the companies. We built crypto giving Tuesday with the Giving Tuesday Foundation, the end of year campaigns, the integrations on crypto products for donations come through. And then we have kind of a consultancy arm on the nonprofit side that helps the serious crypto philanthropy programs like ramp up and turn it into like an active revenue channel. So it's a lot of marble mouth stuff going on there, but like anything a nonprofit needs to be successful when it comes to crypto, we try to do it all. And then same thing on the donor side. Wow. Fantastic. And when was this founded? How long have you and Alex been working towards this goal? 2018 is when we got started. Okay, excellent. Excellent. Well, let's go to Julia. You know, I think that's, Jared and I are talking over one another because we have so many questions. So excited. Yes. Because this is such a big deal and we're going to blow through 30 minutes, I think pretty quickly because this is a bigger issue than what we have today to tackle. But just give us some ideas. Like what is cryptocurrency doing inside the nonprofit sector? And what is it looking like? Yeah. I mean, first of all just crypto in general because like a lot of folks are kind of confused about how it works. It's pretty much a digital payment method slash investment tool. That just does a lot of things that other assets haven't done historically. So it takes some of the positive features of cash. It's fungible. It's very easy to send back and forth in a matter of seconds. It has an immutable transaction record, which is what blockchain is. All that means is no transaction records for Bitcoin, for instance, have ever been changed. No one can claim that it exists somewhere it doesn't. All of kind of the tomfoolery that you see in traditional finance goes away. So just a really efficient way to send money around. However, the price is volatile, right? Speculative. Which gets us to this sort of kind of stock market type vibe where millennials, Gen Zs, they primarily kind of invest this way. It's like 83% of millennial millionaires of crypto as of the report last year. So it's just becoming like the new stock market for millennials because they're betting on blockchain and cryptocurrencies becoming the next wave of tech innovation. And then gold, it has some features of scarcity and you can't inject fake crypto into a network or you can't make new units of it like the Fed Prince dollar. So in the same way people buy gold because there's a very limited supply, crypto has this hedge against inflation, the store value gold type feature. So a lot of people will move treasury money into it. But long story short, it's just very efficient sort of money that a lot of people are betting on as kind of the future finance. And then when it comes to nonprofits like playing in simple nonprofits, a lot of the time know it already if you're taking stocks or other property assets. But if a donor gives you something other than a dollar they don't just get the right off like they do normally but they erase the capital gains tax burden associated with that asset. So a million dollars in the bank, send it to a charity, I get a million dollar right off. If I do that with Bitcoin or stocks, a house, a car, et cetera I can do that transfer really immediately with a crypto but I can erase up to $300,000 plus in tax liability on top of the other tax incentives. So it's a really strong tool when it comes to donations if you're holding this particular type of asset which today is about 300 million people. Okay, 300 million people that are holding this asset where would you say the majority of those folks are? Is it North America? Is it Europe? I mean, is it just everywhere? What are your thoughts on that? Yeah, reports are like mixed. Generally speaking, the average shows about half being in like the US. So it's strong here for sure. So you can expect like on this like a calendar year in any calendar you can expect tens of millions of Americans to be most tax incentivized to give using crypto specifically. And then it's just a matter of their own tax education and opportunities to give kind of syncing up with that. But yeah, like probably somewhere between 100 and 200 million people in the US currently use crypto. I know it's a big range. But there's a lot of kind of, yeah, different reports coming from different folks who have different incentives. So then along with that, what does this donor profile look like? I mean, again, can you give us some thoughts as to who these folks are? I mean, are they throughout the US? Are they in tech? Are they a certain age? What does that look like? Yeah, there's like the average crypto user which is cool, very interesting. It's almost like a lab-made donor demographic, which is fun when you just look down the averages. It's like late 20s, early 30s. Their average income for a crypto user is $111,000, which is higher than any city in America. They tend to be more high net worth than the average person. The Fidelity Report I came out last year shows they're about 50% more likely to donate $1,000 or more versus any other investor type. So you look across stocks or other assets. Some of that is because of the amazing performance. It's the best performing asset class for the last five years or the last 10 years. But it's also just because you have folks who are young and idealistic and on the cutting edge. So extraordinarily generous, compared to other demos, extraordinarily young, compared to other high net worth donors. Very active. And what's cool about it like finally is their donor demographic details, like who they are as a person is tied directly to their donation method, which is of course a completely new phenomenon. It's not like you were targeting credit card donors, right? Or like stock donors. It's this really interesting coupling of a donation method with a donor demo. And a donor demo just happens to be really desirable. Only thing I would tack on top of that is the majority of wealth in crypto is actually held by Gen X and baby boomers. Despite the fact that 94% of users are Gen Z and millennial, there's just so much wealth in the older demographics that they're very limited diversification into crypto accounts for the majority of holding. So if you're looking at your high net worth individuals, your institutional donors, your corporate partners, there's a ton of capital baked in. And even if they have a 1% allocation into crypto, when it comes to the end of the year, when they go to make a donation, if their crypto has gone up the most, that's their best donation method from just like a bottom line perspective. So we're seeing a lot more older folks giving crypto for the first time. That makes a lot of sense. But I understand, talk to us if you would about the Giving Tuesday and how that was so successful. And if you can weave in there, Pat, about the demographic of the donors for this Giving Tuesday. I'm curious if it was the baby boomers, the Gen Zs, but just talk to us about all of it. I wanna get an earful. Yeah, this is kind of, I would say like every startup story, like why it works, why it doesn't work. There's kind of this subtle behind the scenes variable that kind of drives that. And I feel like this would actually probably be it, our campaign strategy and structure. We've similar to saying crypto donors are those very unique donor demographic. You attract crypto donors very much the way you would look for someone to like join a walks program or try to activate millennials and Gen Zs to send you 20 bucks a month. This very kind of low dollar value donor, but like very active online, digitally native, but their average gift size, like on our platform is over $10,000. So you have to then convert them like a major gift donor. So it's like this memification of campaigns and this fun and silliness and very Twitter heavy campaign strategy, but there's a lot of mixed in kind of tax education language. And when you go to the page, there's like FAQs and donor language. And then we have like a private client services funnel that's always very prominent. If they're going to send $10 million, like they can come through a meme and then land somewhere where they have this very white glove institutional donation opportunity. It all kind of starts with these campaigns, but we connected with Giving Tuesday in 2019 was the first time we launched a community campaign. Formerly we called it Bitcoin Tuesday back then and then emerged into crypto giving Tuesday as more assets became popularized. We give all of our nonprofit clients. Last year we ended up with a little over 1200 clients who are on our platform. They all get marketing toolkits, they all activate together. We do webinars to kind of train folks up and then we go out there on the internet. And then behind the scenes, we get a lot of the companies and influencers in crypto to pull together match dollars, to activate on their newsletters to their audience to run like trading fees competitions on exchanges, NFT drops where the proceeds go to charities. We did a big one with Sotheby's, but long story short, it's just a bunch of kind of grassroots fundraising initiatives all tied together around crypto philanthropy hashtags with the crypto companies and donors coming through in the nonprofit's kind of medium where they are. I'm fascinated that you have, and maybe I didn't realize this and you were doing this all along, but your link to the actual crypto donors itself that you do have that injection of talent in relationship building and even administration, that's pretty fascinating. Yeah, that's like half our work, which is really interesting. Like as a payments company, it's not like if you sign up with, BlackBot or wherever else they're like, let's get you in front of people with credit cards. But you couldn't, it's the payment and the donor demo and the fundraising strategies don't sync up usually. But yeah, we run the, I kind of headed the beginning, but we launched and run the industry giving pledge. So like Tony Hawk, Rainn Wilson, like cool celebrities have taken that, FTX, the crypto exchange that just bought the, Miami Heat Stadium, the Super Bowl ads like Sam over that company, just a lot of crypto billionaires and millionaires and the companies in the industry have taken that. And like that's kind of their conduit into the space. We run the corporate philanthropy program. So like even just the portals where their employees get their crypto donations matched or the activations where they have like a competition between departments or a trading fees competition, their integrations on their platforms. And then of course we run the main crowdfunding platform. So like kind of like the go fund me for crypto where the donors come together on top of the, on the nonprofit side, we give them the marketing kits to kind of meet those donor funnels that we're creating. So it's very active and orchestrated. The nonprofits in 2018 wanted nothing to do with crypto. They were terrified and crypto donors, donors quote unquote back then users did not want to donate crypto. They were not tax literate. And like there's this hodl culture which you'll see which just means hold it. You see diamond hands, laser eyes, like no one ever wants to part with crypto. So we have to do a ton of education where it's like, no, you can have more crypto by donating crypto set of dollars. And they're like, that doesn't make sense. It's like donate the crypto, take your dollars, buy more crypto, you move the cost basis up. We, it's like whiteboard it out with everybody. But yeah, anyway, we do a lot of building that connected tissue. That's interesting. I'm curious for many of our organizations that are watching and listening and saying, okay, I'm drinking the Kool-Aid Pat, I'm interested, right? What is the ramp up time? If we were to reach out to the giving block and say, we're in, we wanna be part of this, talk to us about the journey we would experience in the timeline. Yeah, there's the quick answer and then the accurate answer. So like there's how long does it take to get set up to accept crypto donations? That's like filling out a bank account with us. Like we built like a nonprofit track that then exchange the plugs into our backend. All the tech is layered on top of it. You go through our dashboard, but it's all just built in. You just need to get approved so they can tie a formal institutional crypto account to your nonprofit TIN. That way the donor can go to the IRS and claim the tax benefit and you as a nonprofit have the right accounting records. That's super easy, but like the main thing that we say to nonprofits when they come through like our sales journey is like one, are you good at fundraising in any baseline fundamental sense? And then two, are you good at the internet? Because the answer is no to both of those things. Like this is a lottery ticket, it's a distraction and the thing you really need to be worried about is not not getting money. It's trying a lot of very high bandwidth like low odds of success type maneuvers which is like you're a small nonprofit and you're spending all day on Twitter and you're trying to find a corporate partner and you're trying to run your own NFT drop and say you can have this lost year because you're too active which for a small nonprofit is usually the threat when it comes to crypto because it's so shiny and exciting. So like fun policing for us on the small side, super important organizational readiness just kind of putting the blocks in the right order as you kind of ramp and apply energy that's disproportionately high ROI. And then on the big side, it's sort of the opposite. A lot of larger nonprofits are used to adding a donation method and then they have such a big audience that it'll just come. So on the larger nonprofit side, it's more like don't just add a donate crypto button to your site and wait for a year and then come back around and be like, where's all the money? It's like, well, no one knows you're taking it. Like this isn't people don't opt for crypto instead of credit cards and then interface. Like that just won't happen in the same way they're not gonna be like, I was gonna give you 20 bucks a month with my credit card but instead I'll give you $80,000 in stocks. Like that's just, it's a very different, yeah, consideration. I appreciate you being so transparent about that. And I love that you actually walked as Garrett, the Garrett that was a brilliant question. You walked through that journey because I think that that's one of the things is a lot of nonprofits are like, well, hell, this is easy money. You know, just put up that button. And so I do appreciate that you brought this back down a little bit more to the reality of what the process is. And I also am fascinated that it's not the same donor profile. Someone that's gonna say, I'm in for 20 bucks a month. You know, it's a different thing. So that's really an interesting thing to learn. We don't have a lot of time left but I do, you touched on something and I do think we wanna kind of drill down a little bit. And that's the IRS issue. I would imagine these things are changing and they are for everybody, but could you kind of give us some perspective on this? Yeah, it's actually, it's been consistent since I think like 2014. It's been super point blank and easy, thankfully. I know a lot of, that's like one of the nonprofit questions in 2018, 19 more, so not anymore. But they'd be like, one is crypto gonna be regulated. We're like, it's heavily regulated. We just show them it's just like, if you just put a bank next to a crypto exchange, like what are their rules? What compliance considerations? What agencies they report to? What are the data requirements? It's like, if you just, you know, when you do a blindfolded taste test, like it's, I don't think practically anyone other than like a super high level expert could see the subtle differences that are still being negotiated. So like all of that is pretty much in place. The main thing to understand is like any property asset. So like the value goes up and down, people buy it knowing that the value will change is applied the same way as stocks, cars, houses. And like that's all that matters for nonprofits for the most part. Every other consideration around like what types of mining can exist in what jurisdictions and what types of rules apply to different exchanges. It doesn't really matter. The two things nonprofits need to know are like one cost volatility, the price volatility of a crypto is not a consideration of yours. If you're not holding it, almost every client we support is just auto sales for cash. Like that's one of the main concerns. And then the other piece is like how could changing rules affect us? And it's like, they won't. Unless they decide that like all property giving like in Canada, for instance, like you don't get this additional write-off which would be like a huge issue for stocks and everything else. But like that's not a thing that's ever proposed. You're gonna have, it would be like a crippling blow to every donation method that isn't a dollar. And that's never been a thing that's seriously considered cause that would be absurd. So as long as you don't pay taxes on assets you give to a charity point blank then crypto will of course fall under that umbrella. That makes sense and you're right. It is regulated, heavily regulated. And I think it really falls within the whole what the heck is crypto? And therefore everything around crypto is a little sketchy. But I'm gonna turn the page. So stay with me here, Pat. I wanna nerd out in our final few minutes about what it's like to cultivate and steward these donors slash investors. And if you can talk about the donor retention. Yeah, there's like a few layers to this. One is anonymous giving, which I know like our platform we get questions about it because we have anonymous options that nonprofits can turn on. That option is optional. So as options usually are. So like the vast majority of our clients allow anonymous donations, quote unquote, was journalists and nonprofits sometimes are confused about. One, you don't have to. You can just force everyone to provide information. It's just whatever your policies are. But if you don't, like here's what happens. It's very similar to like when you swipe a credit card we always say it like a CVS. It would be like if that CVS was like, hey, do you wanna give us CVS, your home address and everything so we can give you like a saver card here. If you say no, it's still very much like Visa and your bank's responsibility to KYCU when you open accounts and then follow those transaction records and like report those to authorities. The information nonprofits collect in a donor form like doesn't go to like the CIA. Like those forms are not going anywhere. So like sometimes people are like, is that really safe? It's like, I mean, yeah. It's very similar to like if you don't tell Starbucks where you live when you buy your cup of coffee. It's like that's a Visa thing. So like the payment networks are still equally monitored. It's like the nonprofits are investigating who these people are doing background checks. So we give that option to donors. When that's the case, then there is no stewardship. We just give the donor the opportunity to give money without getting engaged and without providing personal information. For us, like some of the coolest stories have come out of that. So like we had a closeted gay guy who was in the South in the US who like sent a multimillion dollar crypto donation which is like one of our iconic ones and wrote like the most beautiful note from like an encrypted email where they were just like, I want to do this my whole life and would never like put my personal information and attach to a transact. Cause it's like that's your whole life hanging in the balance but like I've always wanted to be a part of that. And they were like, now I can which I thought was really cool. And then there was like a wealthy NFT artist who had just like gotten rich all of a sudden. It's a guy who lived outside of the US and he wanted to donate to Doctors Without Borders that was in Australia and just didn't want his friends and family to know he had money. He's been rich for like two days and felt like an overwhelming responsibility to do something good and got to give anonymously. And then like wrote via email again to the nonprofit in us about how awesome that was. So with anonymous giving like we like it from an ethical perspective just for like donor privacy rights. Like I think it's a nice thing to offer but if the nonprofits are in conflict with it like don't do it. If you're not doing it for not crypto don't do it for crypto. Like you'll be fine either way. When they leave their information the main thing to note is like again you're doing social media campaigns you have an existing internal protocol and you're like finding these people through memes on Twitter they're going to end up in a newsletter that's going to ask them to give 20 bucks a month if you're not very careful if you're using like a wealth engine or whatever like the profile that you're thinking should apply to this person doesn't because their asset type is tax incentivized. So like you're looking for an offset like you're looking for a lump sum at a point where they think it's a good transfer point or you're looking for them the dollar cost average their donations even. So making sure you have that major gift type stewardship process and like a tory from Save the Children is like the master of this. He created like a really beautiful process for like the different campaigns they come through and how they ought to be stewarded. And then finally there's like the high end donors that just start high end. So like Mike McLean from Fidelity Charitable he ran their crypto program. He's building out our institutional arm which includes our private client services. The final piece for nonprofits like if you are using our widget or any other donation method and you have donors coming through who want to give you an NFT or a small cap crypto or a large amount of something. If you're not a hundred percent sure it's like the experience that you want them to have make sure that you have like direct relationship with a company. I would say it's not just stewardship it's transaction mode. Like the worst thing you can do from a stewardship perspective is have them send an NFT to a dynamic address and just set the thing on fire. Right. Like there are fringe cases when it comes to crypto giving. So just make sure you're not going it alone and thinking that like whatever baseline tool you have sitting on your site from a couple of years ago was going to accommodate your most important donors. There are unique circumstances so you should always have an expert in the room. And is that something that you and your team support with? Is that okay. Great. That's what Mike from Fidelity Charitable came over. They funny enough Fidelity Charitable last year did $300 million plus in just crypto donation volume. So they had a really big program and then Mike came over from their program just because through sessions we just designed ways that we can save time and build kind of private client services for those donors. I just wanted to make that offering more universal. Amazing. You know, I think that it's gonna be ultimately the relationship that you build with that side of your business and sharing that knowledge is super powerful. I mean, think about how often we partner with these different sources for funding but we don't really know what that customer experience is like because are the vendors that we use don't give that information. And so it's really, really interesting that you're gonna be able, I think, to help guide our sector even more into understanding what this is all looking like because it doesn't seem to you and I mean, you would be at the center of the storm that it's changing, right? Or do you feel like it's the same as when you started? No. Yeah, it's changing, which is like, it bums me out when, non-profits, I totally get it. Like they have donors who will be like, just pop open a wallet and we'll send you some money and then they're like sitting there with Bitcoin going up and down as they try to get an exchange account open to sell, like sometimes, I get why non-profits do it, but like, yeah, I would say my main concern would be vendors approaching it like credit cards where they're just like, well, let's just add it as a donation. Option one, because it's gonna be like really bad for conversion because again, they're just probably gonna sit it in there with everything else and on our standard, it's like a very different donor demo. And then two non-profits will be like, I've checked the box for crypto and then you have that lost year, like we talked about where it's just like, let's just sit it there and then they don't get volume. And it's a time where the non-profit on these platforms is gonna like add a crypto option because they actually care about getting into this thing and they'll be told like, you're done, you did it. And there's new cryptos listed every day, like the NFT ecosystem is changing. We created an NF Tuesday like three weeks before the campaign started because of the spike in activity and that generates now millions of dollars in volume of a month. Yeah, there's subtlety to it. I hope that we're eventually obsolete, right? Because like enough of this information gets out there where you can just be a payments company because what we do is like completely unscalable. We'll never be able to have like millions of clients like even getting to like 10,000 which is what we're trying to target is gonna be, it's gonna require a gigantic team. But yeah, for the time being, I would say non-profits if you're getting started, even if it's not with us like just make sure you're tackling it the right way or just sit at somewhere in your list of other innovation priorities and just wait to get to it. You don't wanna like feel like the box is checked and then lose a year or on the other side like really go all in trying to do it yourself as if you're like building a Wi-Fi router instead of going to Comcast. It's like, that's just not, like don't do that. Don't do that, that's just silly. Well, we wanna help you get to 10,000. So Julia is gonna pull up the information to reach out to the Giving Block. Pat Duffy, you're fantastic. Your partner, Alex Wilson, also equally fantastic. And thank you for sharing your time, your expertise. I hope that we can have some more fun together because you're definitely a breath of fresh air. It's really, really cool to have these conversations because I'm gonna say, even I have the question of what the heck is it? I'm also gonna share, witness to you, I have it, whatever it is, I have it. I don't know what the heck to do with it. So it's sitting here and my 11. That's usually the best thing to do with it. Okay, good. My 11 year old son is the one who checks it for me and tells me what I need to do next. So thank you for being on. It's just a joy to have you. Yeah, thanks for having me. I'll wear a kilt next time. Please do. Please do. I'll bring the Kilt Lifter beer as we talked about in the green room chatter. And so this is why you gotta check out Jared and I before the show actually starts because that's like the fun part, I think. We get glossy. Yeah, we do. But you know, this is a sacred day as we started. It's St. Patrick's Day and you got two people with the name Patrick and then Jared, we are calling her O-Ransom for the day. So I think that's all good. Hey, we want to thank all of our presenting sponsors who are here with us day in and day out. We have moved past 500 episodes of the Nonprofit Show and so we thank Blumerang, Fundraising Academy, the Nonprofit Nerd, American Nonprofit Academy, your part-time controller, Staffing Boutique, Nonprofit Thought Leader, and the Nonprofit Atlas. All of our sponsors are here with us day in and day out so that we can bring this programming to you as we end our episode today. We want to remind everyone, and I like to say ourselves as well, stay well so you can do well. We'll see you back here tomorrow, everyone.