Crypto DAFs are 3X MORE Generous that Traditional DAFs | Endaoment.org

Alexis Miller, Donor Engagement and Strategic Partnerships Lead at Endaoment.org shares how crypto DAFs work and why nonprofits should start paying attention. When compared with traditional DAF payouts, Endaoment is showing 3x payout rate of funds- 22% to 58%.  We also discuss other ways crypto donors differ from traditional fiat donors.

 

About Alexis Miller

Alexis Miller is the Donor Engagement and Strategic Partnerships Lead at Endaoment, the first 501(c)3 community foundation built on the Ethereum blockchain. Alexis works to facilitate collaboration between nonprofit organizations and crypto donors. Before joining Endaoment, Alexis worked as a philanthropic advisor and a development professional. She earned a Masters in Social Work from the University of Pennsylvania and now lives in Washington DC.

Resource Links

• Endaoment Community Hub *includes a crypto 101 glossary - https://endaoment.notion.site/
• Endaoment website - endaoment.org
• Twitter - discord.gg/endaoment

 

 

 

Rough Transcription

 

[00:00:00] Well, we found a reoccurring guest, well I'll say organization joining us today from endowment, and they are helping turn crypto holdings into crypto givings, which is a topic that I love. I just love it. I'm long crypto philanthropy. Alexis Miller donor Engage. Strategic partnerships Lead at Endowment is joining us today.

[00:00:32] Kind of as a follow up to our conversation a year ago. We'll put that in the show notes. And Alexis, after graduating from the University of Pennsylvania, Master's degree in Social work, Went on to donor services officer and Baltimore Community Foundation. So definitely kind of one of us, as well as working at, uh, Associated Jewish Community Federation of Baltimore.

[00:00:56] So now you have landed at endowment, and maybe for our newer listeners, can you explain what endowment spelled? Endowment? Mm-hmm. . I'm not pronouncing it right. I feel like you really have to put M faces on the Dow. Can you explain what. Yes. Thank you for having me, George. And for that introduction. So endowment, spelled E n d a o m e n T.

[00:01:22] I always try to, sometimes people Google us and can't find us because we're spelled d a o, not d o w, like the traditional way. We are a 5 0 1 C three. Non-profit community foundation that essentially exists for the crypto community. So we are built on the Ethereum blockchain, so our actual non-profit entity structure is built using.

[00:01:46] Blockchain technology, and we essentially serve as that community foundation resource. So we were created really to solve two problems. The first is to allow a tax compliant and easy way for donors to be able to give Crypto or NFTs. And on the flip side, allowing non-profits to be able to receive donations that originated in crypto.

[00:02:10] No cost to the nonprofit. So that is a little bit of what we do. I will get into the details, but our kind of bread and butter is our crypto donor advised fund. So similar to other community foundations that offer a donor advised fund, charitable checking account. Essentially we do the same just using crypto.

[00:02:30] Maybe we can make sure that this makes sense, because I feel like there was a lot of words with lots of words, a lot of acronyms, because that's what technical people seem to enjoy doing by making a ton of acronyms. Maybe we start with the, as you were explaining, Dow and what that actually means. The d a o as I understand it.

[00:02:52] What, what, what does that actually mean as it's part of your name? It is part of our name, so, DOW stands for a decentralized autonomous organization and basically what that means. An organization or an entity where the decisions are being made by the community as opposed to like a top down approach. So having your CEO or your executive director make all of the decisions, you're actually putting voices into the hands of your community or stakeholders to have a say in how the organization is run.

[00:03:28] So that. A term that's used widely in the crypto space is a dow, but the concept is something that other folks are using just maybe in a little bit of a different way. So in short, we're talking about a daf, but. For crypto. Is that a fair quick summary? Yes, yes. Another acronym. You know, like it's, it's funny, my, my a donor advised fund.

[00:03:53] You're right. Yes. We're gonna have a lot of gloss. It's all good. It, it's funny cuz you know, my background's in non-profit and I feel like non-profits use a ton of acronyms and like insider language. And now I'm in this fine, I'm kind of balancing the non-profit world with the crypto world. And they also use a ton of acronyms, very different acronyms, but you know, gotta get used to both of the lingos for sure.

[00:04:16] So let's just make this tangible. Somebody has a crypto windfall. They're then interested in deploying that capital for social impact, making the world less terrible. They come to endowment.org. What happens? Good question. So, you know, as I mentioned before, we're built on the Ethereum blockchain, which I'm, I'm gonna get technical for a, a second and then I will make this more easily digestible.

[00:04:50] But basically the blockchain is just the technology that underpins. This whole crazy world of cryptocurrency. So think of it as like, a public ledger where basically all of the transactions and data is taking place. So what that means in practice is our nonprofit is actually set up so that you can see all of the transactions taking place.

[00:05:14] So, All money flowing into endowment and all money flowing out of endowment is technically publicly available without any personal information. But all of that information lies using what's called blockchain technology. So that's kind of like the basis, So we're built on. Blockchain technology, and when someone comes to, you know, endowment.org or app.endowment.org, they would connect their wallet that holds their cryptocurrency and they could take an action on our platform so they could open up a donor advised fund by clicking a button, they could make a direct donation to a nonprofit of their choice.

[00:05:53] Basically skipping the fund process and just giving a one off donation to any nonprofit in the us and. We handle all of the tax receipting so that individual donor is giving us their name, their email, their address so that they can get a tax deduction if they choose. And you know, within 24 to 48 hours, we are turning around that donation and getting it into the nonprofits bank account as US dollars in cash and turning it from the cryptocurrency that it originated in into us.

[00:06:29] Gotcha. And to date you have deployed, it looks like over 50 million according to the website, to a total of 924 organizations. I'm curious, uh, how has growth been? Because right now, I don't know if you've noticed things like Ethereum and others are down 60, 70% just this year. Has that slowed growth? What is it looking like for endowment right now?

[00:07:02] Yeah, so we are right at the $50 million mark and. In terms of growth, you know the market is down for sure, but our average donor is someone who has been in the crypto space since, you know, 20 16, 20 17, 20 18. And most of our donors, while they still might be, you know, down some money or down large amounts of money, They're pretty much up for when they originally invested in the crypto ecosystem.

[00:07:34] So for us, we're still seeing a lot of activity. It's definitely slowed a bit. But we're still seeing that. So to kind of like take a step back, I'll give you some, some statistics based on this year versus last year in terms of how we're doing in terms of getting money out into the hands of nonprofits.

[00:07:52] So our, and, and again, as I mentioned like blockchain, everything's transparent. We also are, so on our website you can actually see, uh, a lot of these statistics that I'm going to share. And, you know, we really try to keep our community informed. The ecosystem and the impact that people are having through using endowment.

[00:08:14] So we have granted, to date 58% of funds that are sitting in donor advised funds. So 58% of the capital that has gone into endowment has been distributed out to various nonprofits across the country. Just to give you a comparison, the average I believe this is through Fidelity, is 22% a national average for donor advised.

[00:08:39] Deploying capital. So as you can see, you know, And that's annually, I guess for the, the DAF distribution and Yeah. Yeah. Annually for the DAF distribution. So you can see that our community is really, really focused on getting money out into the community to support their favorite nonprofit or to support an area of interest.

[00:08:58] And they just need a little assistance identifying who to actually support. So 58%. Capital that has been basically ingested by endowment has been distributed out to various non-profits. And that's lifetime. That's a lifetime distribution number. Lifetime distribution. Yep. And, and we started at the end of 2020.

[00:09:15] So year to date, we've had $21.15 million donated to endowment. So 21.15 out of the 50 million has been donated. This year, you know, in 2022, and we've granted this year 17.9 million which is both of those numbers are up from last year. So if you think of, you know, 2021, the crypto market was a lot higher.

[00:09:39] Yet we've actually done more volume in terms of both donations and grants in 2022. Then, sorry, one more time. Was 17 distributed over 20? 17 distributed this year in 2022, and you have collected 21 million and we've collected 21 million. I mean, you're tracking at 80% at that point, so that, you know, I think it's even more impressive if I'm just speaking, honestly, looking at the annual cause I feel like there's many sins hidden in average numbers.

[00:10:06] Yeah. This is not a sin. This is actually. Contrary to what I would've believed in a down market where I imagine a donor coming in who has transferred over their, you know, do coin. Millions may have chosen not to liquidate, but to hold and maybe hold until it goes back up. This doesn't seem to be the case, and I am right in that assumption that when a donor comes.

[00:10:31] Connects, their wallet moves over an asset that that asset isn't immediately liquidated like it is with say, the giving block when a donation is triggered on site directly to a non-profit. So we do actually liquidate it to US dollar coin. Okay. So yeah, so we are taking in whatever cryptocurrency is donated to us.

[00:10:53] We always say that anything that there's a liquid market for, we will take. So we don't have, you know, a hundred cryptocurrencies listed on our website. Okay. We really will take anything and work with any donor who has any crypto. We immediately convert it into US dollar coin. And then it's SDC, I believe.

[00:11:09] Yes. Yeah. Yep. So U sdc and then it's granted out as US dollars to the nonprofits bank account. Mm-hmm. one, one thing we launched last month in our version two of our platform is actual portfolio allocations, which has been super exciting and was the top feedback we received from our donor community last year.

[00:11:30] So, It's always exciting when you can take feedback and actually build something or do something about it and not just say, Thank you so much for your feedback. We'll take it into consideration. So endowment just launched our version two of our platform and one of those features includes portfolio allocations where people can actually take that us d c, that US dollar coin that's in their donor advised fund and actually invest it in.

[00:11:55] Right now we have three different. Crypto native portfolio allocations that they can invest it in. So when they're not granting out, they, instead of kind of having their funds set idly, they can actually deploy their capital and hopefully earn a little bit of interest making their fund grow, which means more money to charity.

[00:12:16] I don't fully understand that. Can you explain more? How, how is my fund growing? So you're putting together portfolios I understand of nonprofits. Let's say I wanna go help the environment because maybe the coin of my choice is proof of work and it's torching a bunch of electricity and I wanna like make amends on that.

[00:12:38] Is that what we're talking about? There is a essentially an index fund for. That you had packaged for the environment, for social justice, for women's rights, Actually, The kind of the opposite. So it's actually like taking, it's taking your cryptocurrency and actually investing it in like an, the version of like an etf, right?

[00:13:01] So most donor advised funds, you're actually investing those assets in like a money market or in some sort of actual like financial investment vehicle. So, Community foundation's, Fidelity Schwab allow their donors mm-hmm. to take, you know, if you have a hundred thousand dollars in your donor advised fund, you can actually invest that in a money market or in an ETF that the board obviously approves, and you can earn a little bit of yield on that.

[00:13:29] So. Mm-hmm. , you know, when I was in the community foundation space, we would have donors in a, in a good year who were making. Eight to 10% on their money, so that capital is being invested and then you're able to actually give more money out to charity. So we're doing the same thing, but with crypto.

[00:13:48] Portfolios essentially. So instead of investing in, you know, a Fidelity ETF or something, you're investing in Ethereum or you're investing in Ave or Compound, which are the three portfolios that our board has approved right now. So you're taking your idle capital in your donor advised fund that you're not granting out imminently and you're actually investing it to hopefully yield a little bit of a return so that you have more money to grant out to charity in the long term.

[00:14:19] That's, you know, that's interesting. I won't touch on it too much though. I, I feel like one of the reasons that this year you're tracking at what sounds like four x the rate of distribution, then standard DAFs. So by the way, I'm coming up with a title of this podcast right now. I feel like a good one.

[00:14:36] Crypto philanthropists, four x, more generous than greedy. Little fiat DAFs, right, Who are tracking at 20%. In general, your overall numbers are three x, right? If we're talking 20% into 60% distribution, I'm all about the distribution. I'm all about putting the money to work. Nothing frustrates me more than money sitting on the sidelines while non-profits are out there doing the work right now.

[00:15:05] And so I get, I'll just be honest, hesitant about, Hey, here's a way for you to like stash it and make 0.78% on compound. By the way, no subtle risk to what may actually happen to that capital. Looking at what happened to DAFs this year alone, with the market dropping 20% that were in safe, I'm using air quotes, safe investments just means less freaking money for non-profits headed into a recession.

[00:15:35] You can tell I'm frustrated by that , so I think this is interesting. , but it doesn't, it it's not, It's not exciting in the sense that like getting dollars out the door, which is, which is really great. I wanna come back to, unless you have a finer point and you wanna push back on that, I'm fine to. Listen, I, I, you know, I, I agree with you for sure.

[00:15:57] Like money needs to go out into the hands of non-profits. You know, I will say that we are working at a way faster pace than traditional DAFs in terms of getting that money out. We have a four x this year, four x this year. Yes. We have, you know, a two year inactive fund policy is an example. Most community foundations have five years where you don't have to do anything with your.

[00:16:17] For five years. Hmm. Ours is two. And I will say just anecdotally, based on our community, people are super generous and wanna get money out into the community. So even if we're letting them invest a small portion of their donor advised fund, they are not necessarily investing their entire donor advised fund.

[00:16:37] They are still getting money out into the hands of nonprofits. Yeah. And we've seen this time and time again with Ukraine, with reproductive rights. All of the horrible things that are going on in this world, You know, we have been able to raise money imminently, and the fact that we send grants via a bank wire and not a check, like most traditional DAF providers, we are able to actually deploy capital in one to two days to these non-profits that really need it.

[00:17:06] So, you know, everything we do at end. Very, very mission driven and mission-aligned, and we are taking some of the traditional narratives of donor advised funds and, and of philanthropy and really flipping it on its head. My last point about this, and then we can totally move on, is our fee structure, because that is something compared to the traditional donor advised fund that really, really sets us apart.

[00:17:30] You know, we take a transaction fee, it's one and a half percent. It's super upfront and transparent on our website, and it's actually weighted at the throughput. So we take 0.5% when someone is making that initial investment into their donor advised fund, and we take 1% when it's going out to the receiving nonprofit.

[00:17:53] So we're actually financially incentivizing ourselves by taking a larger fee to get money out of the DAF and into the hands of nonprofits. Most traditional donor advisement providers are taking a fee based on assets under management. So if someone has $500,000 in their DA and they grant out $200,000, they're left with $300,000 and that.

[00:18:16] Donor advised fund provider is getting less money. So there's no financial incentive for these larger daph providers to actually get money out into the hands of nonprofits that need it imminently. So, you know, we're trying to really change the narrative and one of the reasons, and one of the ways we're doing that is with our fee structure in terms of waiting more on the output and on the throughput.

[00:18:40] Sorry. Not taking a fee based on how much money is actually in the donor advised fund. The adage, show me the incentive. I'll show you. The behavior is ringing in my ears. I wonder, coming back to the fact that you're built on Ethereum, which is a publicly auditable database living on the blockchain, that it's publicly available that I can check.

[00:19:04] You said words, they sounded. . Here's the thing. I can check that. I can check the holdings, I can look on the chain, I can see where the assets are and I can see where they aren't. I think that's a sort of like amazing trust but verify. Mm-hmm. that traditional DAFs just don't have for sure. And I think that maybe part of this ethos, it's, it's easier to stay honest when you're kept honest.

[00:19:31] For sure. We, we, That's something great about crypto Phil. Yeah, it's not just our board. You know, since we are structured as a nonprofit, you know, we do have a board of directors and it's not just our board us, us being accountable to our board and to our staff, right? But we're actually being accountable to our entire community and ecosystem.

[00:19:49] And even beyond that, because somebody who is not a donor to endowment, has no relation to endowment, can actually see that public trail on the blockchain. So anyone. Check our work can see the activity that's happening. And that for me personally, just coming out of the non-profit, traditional non-profit landscape is something that was really, really exciting about what endowment is doing.

[00:20:14] Because there is that public trail, you are able to check activity and it's just adding layers of transparency that people are really looking for. Both donors, non-profits, and just people in general. This world needs to be more transparent and upfront and, you know, inviting people into the conversation.

[00:20:33] And, you know, we definitely are doing that at endowment and, and we're kind of practicing what we're preaching as well.

[00:20:42] Okay. I was doing some back of the envelope math, so already asterisk. Be careful with that. 924 organizations have been the generous recipients of that amount of, you know, percent of 50 million that has been distributed. 924 is not a lot. That's actually a, a rather small distribution on average looks like $54,000, uh, headed toward, on average.

[00:21:06] These organizations, again, average is a dangerous number, probably throws against a power law for the distribution of this capital. So a sort of consolidation of cause. What is top of mind? What is noisiest? What is emotionally resonant of the moment? And as I explore some of the, the top organizations getting funds and community funds, it does seem like there is a pretty high consolidation around those topics of reproductive rights, of gun violence, of, as you mentioned, Ukraine.

[00:21:41] Can you tell me a bit about. How a nonprofit listening right now that is not the, in the limelight in the moment right now on that cause, how might they engage with this platform or at large crypto donors that seem to be following the shiny social issue of the moment? Sure. So I think it's important to note that, you know, we have nonprofits that are signed up with endowment that haven't.

[00:22:12] funds. Right? And that's okay because you are adding awareness to your donor community that you offer this type of giving vehicle. So you know, once a non-profit is onboarded with endowment, again, we're completely free for non-profits. So there's no contract. You know, nonprofits aren't paying. To potentially get a crypto donation.

[00:22:34] We're completely free. We're really offering this public goods infrastructure where we want every nonprofit to be able to benefit from, we call them crypto originated donations. Since we transfer it into US dollars, we want every nonprofit to be able to participate in this ecosystem and benefit from this new asset class and donor group without ever having to pay.

[00:22:55] Because if. Wait, it then all of the large nonprofits who have the budget will be able to benefit and the small grassroots nonprofits get left out. So when, you know, our CEO built endowment, that was really important to him to keep it free for all nonprofits. So that's like my first note is like, get set up with endowment.

[00:23:15] Like gonna give us a little shout out here. We're completely free. You don't have to pay and get set up and like start communicating to your donor base that you're now set up to receive crypto donations. So, You know, I always tell nonprofits like start spreading the word within your own donor community, right?

[00:23:32] If you are a nonprofit and you have a newsletter, if you use Twitter, if you use Facebook, if you use Instagram, spread the word because you don't know who's a crypto holder, and just because somebody hasn't come knocking on your door and saying, Hey, we have Bitcoin, do you accept? It? Doesn't mean that they're not holding crypto.

[00:23:49] The other aspect is on the donor education side, because. Right now, again, I'm not a cpa. This is not tax advice, like I'm not a financial professional. But crypto is tax the same way as stock is where if you have appreciated crypto assets or appreciated stock assets and you donate them to a 5 0 1 C three, you can mitigate your capital gains taxes while also taking a tax deduction.

[00:24:14] So there's actually a benefit financially why someone would donate crypto. There is an education gap because there are so many people out there who are holding crypto who would never think of it as an asset that you can donate. And I just think about non-profits and the education that they've had to do about stock donations.

[00:24:35] I mean, it has taken years and years to educate the masses that you can donate stock, and it's a change in behavior for people, you know, instead of donors putting. Their $5,000 donation on a credit card are sending you a check. If they have appreciated stock assets, they can actually donate it and it's beneficial for them and for the nonprofit.

[00:24:56] So once a nonprofit starts educating A that they are set up with a platform like endowment to receive the crypto donations, and B, start educating their donor community on the actual benefits of giving crypto, you'll probably see people coming out of the woodworks. So, That's kind of my plug for how nonprofits can kind of benefit from this and start spreading the word.

[00:25:21] And then you see nonprofits who are like totally embracing this crazy crypto community. You know, like there are nonprofits who, a lot of them are larger nonprofits, but they have a, you know, gaming in community manager, or they have like a dedicated staff person, whether on their development team or their marketing team who.

[00:25:42] On Twitter trying to find NFT projects to collaborate or learning more about the space. And I would just say like, you know, if you work at a non-profit and you're crypto curious, like do some research, like find out what's out there because there's a lot of people in the crypto space and in the nft, the non fungible token, like the little digital JPEGs as people call them.

[00:26:06] There are a lot of people who are looking to give back and to do good and just start like seeing what's out there. Because I'm not saying you should hire someone on your non-profit team to spearhead this, but if you're curious at all about the space, start doing research and talk to your team about it.

[00:26:22] Because there's people who wanna do good in this world and support non-profits. And you know, we, we now have created a platform where you're able to do. Yeah, it's, I mean, you're, you're spot on with regard to the opportunity. You know, there's, I'll, I'll pause on it cause I'm gonna put a pin in. There's no downside.

[00:26:44] I'm gonna put a pin in that for a second. Just to add to this, the idea that, because no one has come to you saying like, Hey, I'm a crypto donor, itching to give you money. Doesn't mean they're not out there. A recent study from Investipedia showed that 38% of millennials hold cryptocurrency, 38%. So there is a high probability that existing donors to your organization, uh, meaningful percent of them are, are already holding cryptocurrency.

[00:27:18] What's more, if we're talking about millennials, we're entering into in this. Five to 10 years, the largest wealth shift in human history of boomers, shifting wealth, transferring wealth to millennials. I'll let that sink in for a hot second, as you may write off. Now, that said, Alexis, it has been an adage that has kept me alive for quite some time of not being the first penguin in the.

[00:27:48] Are you familiar with that? Penguins actually, when they're trying to suss out whether or not there's a shark in the water before they go fishing, they'll all cuddle up right next to the edge, and whoever's the first penguin in the water, they see and they look over and they're like, Did Jim get eaten?

[00:28:03] Did he not get eaten ? And if it's safe, they all start jumping in and getting fish. Now where I'm going with this is that we're still pretty early. There's still a lot of confusion, I would say around. Whether or not accepting crypto hurts the environment supports terrorism. You know, blind, small puppies kills rainbows.

[00:28:25] In a more practical sense, earlier this year, Wikipedia chose to stop accepting crypto after having accepted it since very early on. Can you talk me through some of the pain points or potential honest downside? That are talked about with regard to non-profits choosing to move forward or not on accepting crypto.

[00:28:54] Sure. Before I get into that, I want, since you just gave that great stat on millennials with crypto, I wanna give another stat and stat. Stat sta an article. Sta sta sta . Yeah. So, and then I will get to your question, but so to add to that We just did an article in, In Giving Compass and in Candid, and I quoted a Fidelity research that said that, you know, One third, 33% of crypto holders have actually donated digital assets to nonprofits, and half, nearly half, 46% of those donors felt it was difficult to find charities, which directly accepted cryptocurrency donations.

[00:29:40] So that to me is saying that. People want to donate crypto, they just can't find non-profits to accept it, which is just going back to my point of like, get signed up. Because if it's not on your website and you're not promoting it, then people are gonna go elsewhere. So I just wanted to share that stat.

[00:29:59] It's something that I, you know, I have been sharing a lot recently because it just adds to the point about. Why it's so important for nonprofits to get set up to not have to pay for this, because people are looking to donate crypto and they just are gonna turn to the next nonprofit who is set up to receive it.

[00:30:17] So that is my stat add-on. To go to your point about, you know, kind of like the hesitations or maybe like the weaknesses in crypto, you know, It's a really interesting space because of a lot of the privacy and security and you know, when I first started with endowment, I was completely new to the crypto space and I had a lot of preconceived notions about like, Everyone in crypto is like a crypto tech bro, and they're sitting behind their computer and they, you know, like are all engineers.

[00:30:54] And I had all of these preconceived notions about like who is in crypto. And now that I do this for a living, I have met so many amazing people who are in the space who do not at all look like. What I imagined, and there is a huge women in crypto community that I'm, you know, I've connected with a lot of people who have similar backgrounds to me.

[00:31:17] I just found someone the other day who also has their master's in social work, and I'm like, I never thought sitting in my, you know, social justice class that I would be sitting here working at a crypto nonprofit, but here I am. So I think a lot of it is like the preconceived notions and the judgements that people make.

[00:31:34] Like there are a. Diverse people who are in the space. You know, crypto's also. International, Right? Really anyone who has access to internet can access crypto. And we've seen a lot of use cases of people who aren't able to access bank accounts, be able to open up a crypto wallet cuz all you need is an internet connection.

[00:31:57] So it's actually, there's a lot of use. Cases, especially in other countries of how people have been able to use crypto. Not just to give back like we're doing an endowment, but actually instead of traditional banking because for one reason or another they don't have access to traditional finance and banking means.

[00:32:14] So it's been a really interesting use case. On the flip side, there's a lot of securities and risks. Like I wouldn't encourage anyone to just open a crypto wallet if you don't know what you're doing. You need to be able to educate yourself on the landscape. And you see all the same headlines as I do with different protocols who are going belly up and CEOs leaving, and there's a lot of noise in the space for sure.

[00:32:39] And part of it is like having a trusted source of where to turn to. And I think for. I'm grateful that when I started with endowment, my team was super helpful in educating me and telling me like, Don't interact with this company or protocol and this is where you should focus your efforts. And you know, like different podcasts to listen to and blogs to read because there is a lot of noise and that is really important because you don't know what.

[00:33:09] Fake and what's not, and you don't know what's legitimate and what's not. So that's definitely a hurdle because if you don't have a team like endowment or a friend who's in the space, it is really hard to know what's valid and what's not. You know, speaking to like some of the environmental impacts, you know, like we're built on the Ethereum blockchain and we just moved to proof of stake, which just lowered the environmental impacts by 99 point, like nine, 7% or something.

[00:33:36] You know, a lot of other things in our world today take up a lot of energy and. Ethereum just merge, which I don't need to go into the details, but basically like the energy consumption that Ethereum is using has been increasingly lowered which has been huge for the industry. And, you know, we do work with environmental nonprofits that are signed up with us and like see the, that the benefits are kind of outweighing the, the negatives.

[00:34:03] Is there anything else specifically you wanted me to touch on in terms of like, The negatives, I guess, of the crypto space or, or the perceived negatives of the space? I suppose if there was a I'm, I guess I'm in the mind of a non-profit that is worried that they start talking about the word crypto and those headlines of fraud, of criminal activity of, you already mentioned the environmental component, which is awesome.

[00:34:35] Just. Make sure that that is clear as a bell because you are on Ethereum, literally because you exist when somebody moves their money onto there, connects their wallet and moves their Bitcoin, there it is liquidated and is actually on an energy efficient network. You are actually a net positive for moving cryptocurrencies onto a green network quite literally.

[00:34:56] So that is hopefully becoming a moot point. The criminal activity one could be one that, let's just say older donors assume that it's all Silk Road type of nefarious activities. Russian billionaires being able to avoid sanctions, fill in the blank. Cnbc, uninformed post about how crypto's being used, how is that responded to, or can it be responded to because the same arguments can, should be made about cash.

[00:35:29] Cash is the number one full stop used for criminal activity worldwide. Yeah, so, you know, I will say with endowment there, you know, there's a, an ofac like bad actor, bad wallet list that exists and. We are crosschecking wallets that interact with endowment. I don't know the, you know, I'm not, I'm not on the engineering team, so I don't know the logistics of how it happens, but you know, because people interact with our platform using their wallet, we are able to crosscheck it on the ofac.

[00:36:07] Bad actor wallet list. So that is, you know, for us as an organization, that's kind of how we are checking ourselves to your point. Exactly. There is bad stuff going on in every industry, whether that's with crypto, whether that's with cash. There are bad actors everywhere in this world. And you know, we've seen it a lot in philanthropy, like people are.

[00:36:31] Making a lot of money with their company that's maybe not doing so good in the world, and they're parking their money to be charitable and they're getting buildings named after them, and that money is dirty money essentially. So I would say like, this is my personal opinion, that. It's happening everywhere.

[00:36:50] And that just because the headlines are talking about crypto now doesn't mean that that doesn't exist in the world today. And you know, if anything, using a platform like us, people are charitably inclined and they're doing good in the world. And you know, our donors also like, Most of our donors are under the age of 45.

[00:37:09] Most of our donors have made their wealth in a very short amount of time and feel so grateful to give back to the communities that have helped them or that they live in, or that they've benefited from. You know, time and time again, we talk to donors and they say, I've never been able to give more than $500 to charity, and now I'm giving $50,000 or $500,000.

[00:37:29] And just the. Heartwarming sentiments of these people who have made a lot of money in a short amount of time is really, really inspiring. So there are bad actors everywhere. There are also people who are incredibly generous and philanthropic and wanna give back, and in my opinion, the headlines need to focus more on the use cases for crypto and how it's being used for good and how it's helping people who don't have access to bank accounts as opposed to the opposite area.

[00:37:59] Gotcha. Yeah. And thanks for, for making that point. I know it's, uh, it, it's one that probably comes up, uh, a bit. I wanna talk about one more feature on the site before we run out of time here, which are your community funds, because I think it lends itself potentially to a strategy. Can you explain what these funds are?

[00:38:18] I'm on the site and I'm seeing something like the Art Blocks Fund or the end guidance ending. And gun violence fund advised by hug and some are advised by endowment. I'm interested actually, if you can talk about the ones that are advised by other projects and other groups here. What is this? So community funds are.

[00:38:43] Really think of them as area of interest funds. So somebody could come to our site and open up a fund that is supporting gun violence, that is supporting reproductive rights or Ukraine. And these community funds are most often utilized by groups of people, whether that's an NFT project, whether that. We talked about Dows in the beginning of this conversation, whether that's advised by a Dow, whether that's advised by a group of friends, and it's really a great way to be able to raise money for the cause or area of interest that you care about.

[00:39:23] So we saw this. With reproductive rights, right? So endowment as an entity set up a protect reproductive rights fund where we vetted seven non-profits, both national and local. We wanted a combination of, you know, like the more well known organizations paired with the small grassroots non-profits. We identified seven non-profits that we were gonna split donations to those organizations.

[00:39:51] So anyone. Come to our site, make a donation to our Protect reproductive rights fund, and we would evenly distribute to those seven non-profits. That was a great opportunity for anyone who wanted to support the cause, but didn't know where to turn to or didn't wanna do the research on their own. In addition to that, we had other groups of people and FT.

[00:40:11] Artists dows different protocols, some companies that opened up their own funds that they could actually fundraise from. So an example. There's a Dow, an NFT project called Cowgirl Dow and Molly Dixon, who's their founder and artist, she set up a. Fund where a hundred percent of the NFTs were supporting various reproductive rights nonprofits.

[00:40:38] So anyone who purchased one of her NFTs, a hundred percent of the proceeds were going to this fund. And then she was using her community to actually vote on what nonprofits to support. So it was giving people a voice, giving them a say in how the funds are being distributed. And then because it was.

[00:40:57] Public fund on endowment. Anyone could just donate into that fund. You didn't have to purchase an nft. You could just go to her fund, make a donation, and know that your money was supporting reproductive rights nonprofits. So they're a really great tool in vehicle for kind of that collective giving model.

[00:41:16] You know, like in. A lot of nonprofits offer giving circles or have a way where people can kind of pool their funds together and distribute among various nonprofits, and that's essentially what our community funds are doing, is giving a say to various communities across the country that want to give back to a specific area of interest and mobilize their community to get involved in some capacity.

[00:41:40] Gotcha. This is the index fund of non-profits that I think I was thinking of earlier, but what great functionality and also transparent, again because it is built on the blockchain. Alexis, thank you so much. Are there any final thoughts, bits of advice, stats, , that that's, that you were hoping to share before we sign?

[00:42:05] No, this is, This has been great. I mean, I would just add, you know, End of year and it's giving season. And I would encourage, you know, from the donor side of things, if anyone has it, if anyone's listening and has cryptocurrency, please consider donating to your favorite nonprofit. And from the nonprofit side, get signed up with us before the end of the year.

[00:42:27] Or just do some research and like figure out what works for you. Or just survey your community and see if anyone has crypto. Like take an action, do something out of your comfort zone, this giving season. And. , you don't know where it'll lead. And I, I will end with that, but this has been great and you know, I'll give a little plug.

[00:42:46] Like for anyone who wants to learn more we have a whole like resource. Center, we have a crypto 1 0 1 dictionary for nonprofits who have heard terms like blockchain and dow and don't know what they mean and wanna learn more. It's on our website. You know, we are really here as an educational resource and if anyone has questions they're curious about the space, like please reach out to us.

[00:43:06] Our website is endowment.org or on twitter@endowment.org on Discord. You can email us. All of the links will be shared in the show notes and. Thank you George, this, this has been a great conversation. Well, thanks for your time and we appreciate the work. Thanks.