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As the NFT market moves beyond profile pictures without utility, could good causes fill the gap?
The public perception of NFTs plummeted over the course of 2022. Not only did consumers’ opinion’s of them as investments drop, but they also thought less of companies who decided to launch them. As the bubble and subsequent crash fade into memory and the mist dissipates, much of the industry is asking what they are for.
One answer is a good cause. There is something profoundly human in wanting to collect something unique and tradable, and the 2020s NFT boom has seen a raft of projects leveraging that fact to do more than design envy-inducing profile pictures.
Gustavo and Elvia, the co-founders of MetaRaft, had that exact idea. Six years ago, their three-year-old son was suddenly diagnosed with leukemia. Guatavo and Elvia were lucky enough to stay with their son, Antonio, while he had treatment. Other parents who were less fortunate had to go back to work.
That started the idea for MetaRaft, an NFT project that pays children’s medical expenses. MetaRaft wants to give parents of kids going through the same process the ability to be there for their kids, holding their hand at the bedside, rather than having to go to work.
The project launches 10,000 NFTs each month, each based on a different theme. The money raised will be split between the Bill Me Foundation and the holders, who will enter a sweepstake to win a USDC prize. “All NFT purchases are 100% a tax write-off,” says Gustavo Munoz, one of the co-founders. “When you mint a MetaRaft NFT, you are essentially donating to a charity.”
Changing the World One NFT At a Time
Amanda Terry, the COO and co-founder of Metagood, believes that NFTs can be the future of impact investing. For her and Metagood, NFTs make it easier to invest in a project or good cause. “By purchasing an NFT, holders receive an asset that they can sell in the future. And, in our case, know that their funds are going to a cause they support or into a DAO where the funds could be used for impact projects.”
“We did this by creating a DAO specifically for our community of holders, funding the DAO treasury with a portion of NFT sales, and then creating infrastructure for our holders to suggest businesses, creative endeavors, or impact projects and vote to fund those proposals.” For that project, Metagood gained an honorable mention in the Impact Investing category of Fast Company’s World-Changing Ideas in 2022.
When backed by celebrities, NFTs sales can raise a significant amount of money for good causes. In April 2021, Edward Snowden auctioned off an NFT on Foundation, which raised 2,224 ETH ($5.4 million.) The proceeds went towards the Freedom of the Press Foundation, where he has served as President since 2016.
The NFT itself — called ‘Stay Free’ — combines a portrait of the famed whistleblower with a court decision ruling the NSA’s mass surveillance illegal.
Good Causes: More Than Raising Money?
The work does not even have to be especially meaningful or even have artistic merit. In 2021, Ellen Degeneres sold her first NFTs to raise money for World Central Kitchen, a not-for-profit that provides meals to victims of natural disasters. Despite being on sale for only 24 hours, her collection sold for a semi-respectable $30,955 on the marketplace Bitski.
While these drops are a low-effort way to raise money for good causes, are they really impact investing? There are arguments against it. After all, by definition, an investment expects some kind of return. A limited edition NFT by world-famous activist Edward Snowden? You can see why someone would buy it at an inflated price. A “stick cat” by Ellen? That’s a harder case to make.
Where the case becomes stronger is when a cause (or fundraising) is attached to a so-called “blue chip” NFT.
When Yam Karkai launched World of Women (WoW), she and her colleagues didn’t just want to raise money. At the time (and arguably since), the NFT space has been incredibly male. (Scratch that, the technology space is incredibly male.) That was something she and her team wanted to rectify.
Climate Change Activism Is A Growing Trend In The Space
“WoW supports women and underrepresented groups by supporting charitable causes, offering educational opportunities, and community-driven engagements,” says Karkai. “To date, WoW has allocated more than $2 million to charitable causes, driven from portions of primary and secondary sales of the WoW Collections, as well as other charity auctions.”
There are other ways of good aside from making money. Last year, World of Women became the first blue-chip NFT collection to offset its entire carbon footprint. (At the time, the Ethereum network used Proof-of-Work, a much more energy intense consensus mechanism. Since the switch to Proof-Of-Stake, Ethereum’s carbon output has dropped by over 99%.)
There is a lot of money in blue-chip NFT collections, and Karkai tells BeInCrypto that they are trying their best to give back. “Wow has also donated to the program Too Young to Wed, which helps end child marriage. Additionally, WoW supports a host of climate justice initiatives, including major environmental projects like the Great Green Wall, renewable energy, and ocean conservation, including through our recently launched WoW Emergency Fund, which works to support humanitarian and natural disasters.”
For many, a major advantage of NFTs is their relatively low barrier to entry. You don’t need a portfolio manager, and the nature of blockchain makes these investments transparent too. Nihar Neelakanti, CEO and co-founder of Ecosapiens, an NFT collection with an environmental ethos, believes NFTs can bring in more people than other methods. “We believe that if users are given an accessible avenue to create positive environmental change, they will.”
“NFTs, to us, were an obvious entry point. Yes, this tech enables investment in environmental change, but it also encourages community building, which we hope will lead to more opportunities to do good in a creative and social way.”