Fidelity Charitable Launches NFT Lottery Amid Crypto Recession

Fidelity Charitable is participating in NFT, digital images registered on the blockchain, despite a flurry of bad news from the neighboring crypto world.

The nation’s largest sponsor is sponsoring a lottery ending Tuesday where participants can claim one of the NFTs, which stands for a non-fungible token, and 50 people will win. won $1,000 to donate through a donor advisory fund at Fidelity.

“The reason we’re doing this is because we really believe there’s a whole new generation of givers and philanthropists out there,” said Amy Pirozzolo, head of donor engagement. for Fidelity Charitable said. “We want to be in their place and the channels they use and the formats they use and further encourage their generosity.”

About 16% of Americans say they have invested in cryptocurrencies, according to a poll from Pew Research Center last year. The demographic most likely to invest is men between the ages of 18 and 29, with 43% reporting that they have invested.

Blockchain is the underlying technology for cryptocurrency transactions, but it can also record ownership of digital items such as images, videos, or Tweets. Fidelity said 50,000 different wallets, potentially representing many of those individuals, signed up to create the NFT and potentially won the money to donate.

Cryptocurrency contributions to donor advisory funds at Fidelity exploded last year, growing from the equivalent of $28 million in 2020 to $331 million in 2021Fidelity said.

Speaking about the NFT project, Jacob Pruitt, president of Fidelity Charitable, said: “I think it’s going to be a unique way to attract next-generation investors. It’s another way that I think Fidelity is. is innovating and heading to a new space.”

Donor advisory funds allow donors to claim tax credits for donations, but do not require them to transfer those funds within any particular timeframe. DAF Institutions, such as Fidelity Charitable, also handle more complex donations, including exchanges asset to collect cash and present receipts to donors for tax purposes.

“Many nonprofits cannot take over these assets or they have to hire outside consultants or staff to do so,” Pirozzolo said.

One reason crypto donations have skyrocketed is that, until recently, their value has appreciated significantly. The crypto market has seen a massive boom in 2021 with the price of Bitcoin, the first cryptocurrency, rising to an all-time high of around $68,000 last November.

But the demise of Terra — a stablecoin or a cryptocurrency that attempts to pin its value to an asset like the US dollar — in May caused a series of major crypto businesses to collapse. Then, earlier this month, one of the largest cryptocurrency exchanges, FTX and related entities, unexpectedly filed for bankruptcy leaving both US and international users unable to access their accounts. assets they hold on the exchange.

James Lawrence, Co-Founder and CEO of Engiven, an organization that supports cryptocurrency for nonprofits, including Christian ministries, has observed that many people donate crypto. are making great gifts, and that usually happens in the last quarter of the year. That means it’s too early to say how cryptocurrency marketfluctuations could affect donations this year. He said he doesn’t see people donating crypto differently than other donors.

“They just have one other asset to give away, and they’ll give away the most appreciated one they can,” says Lawrence.

Of the more than 1.5 million nonprofits registered with the U.S. Internal Revenue Service, Lawrence estimates that only 4 or 5 thousand can receive direct cryptocurrency donations.

“It’s a huge market that isn’t there yet,” he said. He has also observed that many large crypto donors (they facilitated a single $10 million donation of crypto assets) are the same general type of large donors and It is not necessarily the younger demographic that is more likely to invest in crypto.

“Many of the biggest gifts we have handled have been from older people, who have traditionally given large gifts across a wide range of properties,” he said.

Pirozzolo argues that the Fidelity charity promotion uses NFT separately from the crypto ecosystem.

“This is really about blockchain and there is a fun way to celebrate with digital art the generosity of giving,” she said.

The company is paying the cost of creating the NFT, including the “gas” fee paid for creating and registering the item, and says it has compensated the artists who created the images.

NFT claimants will need to apply for a electronic money wallet with access to the Polygon blockchain. Fidelity Charity NFTs will be hosted on the OpenSea platform.

Participants will see NFTs in their wallets when they sign up, but the artwork itself and the $1,000 ticket winners won’t be revealed until Tuesday, Nov.

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