Unchained - How Donating Crypto Can Help You Save on Taxes - Ep.94

Episode Date: November 27, 2018

Connie Gallippi, the founder and executive director for BitGive, and Joe Waltman, the executive director of GiveCrypto.org, discuss charitable giving in crypto -- what problems in philanthropy it solves, what level of transparency they can achieve and how they measure impact. Connie explains why she has chosen to work with existing non-profits and Joe, why GiveCrypto is working on its own initiatives, and why its working thesis is that crypto will be especially helpful in places with broken money or broken government. They also dive into the tax implications of donating crypto directly -- namely that donors can offset taxes on gains, particularly by donating their oldest coins before the end of the calendar year. Connie talks about how BitGive needs to ensure it doesn't hold or convert money in order to avoid money transmitter regulations, and Joe, how GiveCrypto has to ensure it's not giving money to bad people, such as money launderers or people or entities under economic sanctions. Plus, the two discuss why a space that so often espouses the ideals of democratization of finance gives so little and what it will take for it to donate more. Thank you to our sponsors! CipherTrace: https://ciphertrace.com/unchained WeTrust: Donate in crypto and have your donation matched by WeTrust through Giving Tuesday, November 27! http://wetrust.io/unchained Episode links: Bitgive: https://www.bitgivefoundation.org GiveTrack: https://www.givetrack.org BitGive Twitter: https://twitter.com/BitGiveOrg GiveCrypto: https://www.bitgivefoundation.org GiveCrypto Twitter - https://twitter.com/givecrypto?lang=en BitGive's five-year report: https://d1i1964a5wuyjt.cloudfront.net/2018/11/5-year-deck-021118_compressed-1.pdf Joe's work trial for GiveCrypto: https://medium.com/givecrypto/givecrypto-work-trial-a-new-financial-system-a-new-opportunity-7f564b65aff5 GiveCrypto's October report: https://medium.com/givecrypto/givecryptos-october-monthly-report-5c191bc03b56 Unconfirmed episode with Robert Opp of the UN World Food Programme: http://unconfirmed.libsyn.com/the-un-world-food-programmes-blockchain-based-food-vouchers-for-syrian-refugees-with-robert-opp-ep017 Episode with Elizabeth Rossiello of Bitpesa: http://unchainedpodcast.co/bitpesas-elizabeth-rossiello-on-necker-island Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin. If you've been enjoying Unchained, pop into iTunes to give us a top rating and review. That helps other listeners find the show. WeTrust is a new fundraising platform that allows you to donate crypto to nonprofits. WeTrust will match your donation through Giving Tuesday on November 27. Go to we trust.io slash Unchained to make your donation. In months, cryptocurrency anti-money laundering regulations go global. Are you ready? Avoid stiff penalties or blacklisting by deploying effective anti-money laundering tools for exchanges in crypto businesses, the same tools used by regulators. CipherTraces is securing the crypto economy. In honor of today's holiday, giving Tuesday. The topic for today's episode is philanthropy and crypto. Here to speak about the issue are Connie Gallipi, the founder and executive director of Bikiv, and Joe Waltman, the executive director of GiveCrypto. Welcome, Connie and Joe. Thanks for having us. Yeah, thanks. Let's start with your backgrounds. Connie, how did you get into Bitcoin and come to launch BitGiv? So I first learned about Bitcoin probably, I'm guessing it was probably back in like 2011, 2012, but it was more of just something that I was kind of watching and aware of in the background. And then I attended the first Bitcoin Foundation conference in San Jose in 2013, which has become sort of this event that blossomed, I think, a lot of the startups in the community early on. And that was when I came up with this idea of

BidGiv, and it really wasn't on my radar in any way. It just kind of came to me being in that environment and being inspired by the topics and audience and potential of what I saw coming out of the community. And I immediately wanted to see some way of capturing what was about to happen with this industry, which is now five years later, into something that could give back and have a social impact and help move the needle on social issues globally. And just for listeners who don't know, it's because your background actually was in nonprofits, right? Can you describe that a little bit? Yes, it was. Yeah. So I was in the environmental field for about 15 years. I'm still involved as like a board member on a couple of organizations, but I worked in the environmental space in California for 15 years, largely with nonprofits and a variety of roles. But the majority of the time was spent on finding funds for them to do good work and being, you know, creative about that and strategic about that.

and in a lot of cases creating public sources of funding through advocacy and lobbying efforts. So that's kind of how I made that connection to the potential of this technology and this industry to be able to give back and make a difference in the nonprofit sector. And Joe, what about you? What was your background and how did you get into crypto? Yeah, I'm much more of a carpetbagger. I have a software and, uh, a for-profit startup background. I connected with Brian Armstrong, who's the founder of GIFC crypto, earlier this year in 2018, heard about the opening for executive director. And at that point, thought it sounded like an interesting role. I started working with them a little bit informally,

actually, before I was hired. And the result of that work changed it from, oh, this is cool to, this is something I have to do. This is, this looks like really important, really interesting, really impactful work and started a few months ago. And just to fill that out, so what were you doing in software before? And then how did you hear about Bitcoin or crypto? And before you heard about Give Crypto, like what were your thoughts about what it could do? Yeah. So quickly in my background, like I said, started as a software engineer, worked for big companies

for the first 10 years of my career like Qualcomm and Akibai and Sprint. The last 10 years, I've been a serial entrepreneur, two startups. One was sold to Twitter and one died a relatively painful death. I first heard about Bitcoin more recently, maybe two years ago, or shall we say, blockchain generally. And I think as anybody with technology background and some degree of intellectual curiosity, you couldn't help but become fascinated by it immediately. So let's dive into each of your companies. Connie, what does BitGiv do?

We are a nonprofit, and our focus is leveraging Bitcoin and blockchain technology for the nonprofit sector on a global scale. And we, early on, since we kind of started a long time ago in all this, was a lot of it was outreach and education with the nonprofit sector and mainstream NGOs about the technology itself and also fundraising for them in Bitcoin. And then over the last couple of years, we've been more focused on developing our donation platform, which is called GiveTrack. And we're delivering a technology platform that brings together all the benefits of crypto and blockchain technology, where donors and nonprofits and the public can all benefit from faster, cheaper, more secure transactions. and then the transparency of the blockchain to watch the money moving, knowing where it got to, how it was used. And then we also have a, you know, less blockchain oriented, but a project results component as well. So the donors and the public can see, you know, with pictures and

videos and narrative reports, what the results or the impact was on the ground. And who are some of your partners? And how do you choose which ones to work with. So over the years, we've worked with a wide range of NGOs and I would say in size as well as mission. Some of the earliest ones we worked with were Save the Children, the Water Project, and Medic Mobile. There's been sort of our largest partnerships with multiple projects. And more recently, with GiveTrack, we've attracted smaller, more nimble organizations that are excited about the technology that are doing a variety of different types of projects all over the world. And we're about to launch the next version of GiveTrak in early December.

And we have a series of NGOs lined up to be our launch partners for that as well. So we're kind of all over the place, I would say, geographically, mission-wise, as well as size of organization. And so to talk about the GiveTrak offering a little bit more, when you talk about the GiveTrak offering a little bit more, when you talk about providing transparency through that product, does that require you to identify the wallets of all the different entities that are helping to deliver these charitable goods or services? Ideally, that would be the case. Yeah, but it's, you know, in reality, when working with these NGOs and with projects on the ground, it's a lot more challenging than one would think. And I think that's why a lot of other projects are looking at closed systems

or more, you know, like private blockchains or Ethereum kind of things. And we're using Bitcoin and the Bitcoin blockchain. And so it makes it a lot more challenging to do something like that. So, yeah, it's an evolution. Like right now, Bitcoin doesn't necessarily have a way of registering and confirming any particular address. We used to love the public static addresses, especially for something like an NGO. but a lot of the Bitcoin services have walked, you know, backwards from those because of security

reasons. So it's a challenge. I think eventually we'll get there. But right now we're chipping away at some of the basics around how to make this happen in the real world and on the ground. So that's kind of further out. So when you talk about transparency through GiveTrek, what does it mean if it's not that? Well, everything is on the blockchain. So you can see everything on the, the Bitcoin blockchain, and then we're also working with RSK to notarize everything on their blockchain and smart contracts as well. But yeah, there's still, as with anything, you know, that level of transparency to the last mile. In reality isn't really even happening in today's world at scale, you know, being able to even use it on the ground, especially in these more

remote areas or even being able to convert it in developing economies has become a challenge. So, yeah, it's more just leveraging the transparency of the blockchain itself and then the RSK technology as well. Meaning like people can track the funds, but if the wallets aren't identified, then later on in some fashion, people might be able to figure out if one of the wallets is actually not associate with the charity, but in the moment they can't or something like how. Like, I don't understand how it can be transparent if, if, I mean, obviously you can watch which addresses, but if you don't know whose addresses, who's, then I don't understand when

you say it's transparent. Like, what, what is it offering exactly? Well, I mean, it's a good question. I think compared to what we have in today's day, you know, it's, it's tremendously huge improvement. Because we don't have in any way today to see transparently on a public ledger what's happening with funds that donors give to NGOs and that end up in a, you know, who knows where. So the technology that the blockchain offers is a huge step forward in that sense. I don't, you know, personally, I don't know any entity on the Bitcoin blockchain since it's truly decentralized distributed system that could confirm, you know, any wallet address as a third party,

right? So you would always be trusting that someone says, this is my wallet or this is a wallet for this NGO and this purpose when they still could be theoretically making that up unless you have some sort of third party confirming that somehow, which I'm not aware of. So Big Give is not, like I thought maybe you guys would be that entity, but you're not. I don't know how that would be possible. Yeah. I mean, if you know a way, that'd be awesome. I'd love to talk more about that. But I don't think it's possible to do that. There's still a level of trust that's involved where someone's claiming a wallet or an address belongs to a particular person or entity. I mean, I guess you could do something the way the banks do now where you would say to them, okay, you know, send me

this, you know, 0.002, 2, 3, Bitcoin or something. Some like, you know, strange number. and then you could just send it back, but then you would know, okay, that's their address. It could be something like that. I'm just making it up, but. Yeah. Well, I mean, we are, of course, going through the whole, you know, KYC process and onboarding process with the NGOs themselves that are on the platform. But I think what you're asking about is, you know, many steps down the line when they're actually spending the money somewhere in the world for some particular thing, how we would confirm that address. I thought that's what you were asking about.

Yeah, well, it's more, I mean, it could be any type of address. I mean, I just was asking what transparency meant and thought that it did mean that you were identifying some of the wallets or something like that. But yeah, how granular it gets would be, I guess, up to you. But actually, so one other thing that I wanted to ask was, so you're sending them Bitcoin directly. Are you always certain that there are crypto exchanges in those places so that those recipients can. cash out or do you help them cash out or, you know, what do they do when they receive the Bitcoin? Because I imagine some of them are working in places where there maybe aren't really good on and off ramps to the crypto world. Right. Yeah. That's definitely our biggest challenge is the lack of ecosystem globally, especially in the areas

that we want to do work and that NGOs are doing work. But yeah, we do work directly with them. So so far, we've had a small select number of people. pilot. So we've worked, you know, really closely with the NGOs and the projects. And we help them identify good projects and locations that we think there's some liquidity. We hope there's an ecosystem on the ground where they can use it. We've come up up against a lot of challenges, even where we originally knew there was a functioning ecosystem because of regulatory issues and all kinds of issues. It's a constantly evolving ecosystem, especially when you operate

globally. But yeah, that's that's the idea. And with the new version, there's a lot more liquidity built into the platform itself because we understand the limitations a lot better now. And so the expectation is that, you know, at least currently, there are fewer opportunities to use it on the ground or even convert it. So we've built in integration with uphold. And they the donors can use that for a variety of different currencies in both Fiat and crypto to make a contribution. But the nonprofits can also go through uphold as well and offers a lot of different ways of converting it. But we're encouraging, you know, the whole point of the platform is that we're encouraging them to keep it in Bitcoin, move it on the blockchain for that transparency

for the benefit of faster, cheaper, more secure transactions. to get the money there on the ground. So the platform is built to encourage that behavior and be ready for it when the ecosystem catches up to our vision. But yeah, it's very limiting. I mean, the ecosystem is extremely limited, especially in developing economies and remote areas. And so you just mentioned your partnership with Uphold,

but you only work with Bitcoin. So does that mean that you'll eventually plan to add other crypto assets? Or why do you guys only work with Bitcoin? Well, so right now, yeah, we work with Bitcoin. We only have an MVP. So we had a really small budget to build that. And it was way too complicated to involve anything else. But the new version that we're about to launch does integrate with uphold.

So it opens up a lot of possibilities. It was just something that took us a long time and required resources in order to build and integrate. and deal with all the legal restrictions around money transmitting licensing and money service business stuff, which is probably boring stuff that you don't want to talk about. But it took us a long time to figure that out. But yeah, so it'll open up that opportunity. So the new platform is not live yet, but we'll offer integration through uphold for multiple fiat and multiple cryptocurrencies. Okay. I actually do want to ask about the regulatory stuff, but not just yet. But let's turn to Joe to find out.

So Joe, why don't you describe what give crypto does? Yeah. So our mission is to financially empower people by distributing cryptocurrency globally. That's kind of a big goal. What that means in the short term and using normal words is we give cryptocurrency directly to people in need. Now, that said, that's kind of a weird thing to do. If you have the least bit of cynicism and you should, your first question should be,

why are you giving crypto to poor people, just give them cash if you really want to help them out. And I agree with that. That was one of my questions. Yeah, yeah, well, I'm glad I anticipated it. So I share that cynicism if the recipient is in a place with a functional financial system or a somewhat competent government. But if one or both of those isn't true, it could be argued that that crypto might be more helpful than Fiat. Some examples of broken money would be hyperinflation, some examples of broken government, of which there are many. We're specifically focusing on stateless citizens, refugees.

So most of our work right now revolves around testing that hypothesis. Can people in these situations actually make use of cryptocurrency? And basically what we're doing is sprinkling crypto into a number of different situations and kind of seeing what happens. And I know you kind of did that for your work trial to get this role. Can you describe what you did there and what your results were? Yeah, they, well, that was very, very early stage and rather crude, I must say. But yeah, the, so I, I, while I was interviewing for this job, I, I don't think they quite knew what to do with me because this is they being Brian Armstrong and some of the some of the other people who are who are hiring for this role. So they gave me $1,000 in Ethereum and said, go give this to some people in need and report back to us in a few days. And as I mentioned previously, that was a really hopefully helpful experience or exercise for them to see if I'm worth a damn. But it was, I think, almost more helpful for me to see what this is really like and how much impact you can really have distributing funds in this way. And we did things like giving some money to some restaurants in Venezuela and ask them to convert it.

into cost effectively converted into a number of meals and help people in their neighboring community who probably wouldn't be able to afford to eat at their restaurants. We gave it to a gentleman who works in a refugee camp in Rwanda and had him distribute some food to the refugees. So it was a very much scatter or shotgun approach, but was really inspiring work. And we've continued to do similar sorts of exercises, but hopefully more deliberate, it, more organized, and ultimately more educational from our end. And just out of curiosity, in the beginning when you were describing how give crypto works,

it sounded like you were looking for applications where the actual money itself was going to be what the people that you were serving needed. But just now for the work trial, the examples you gave were ones where you were giving money and expecting people to get food instead. So is that kind of how you're approaching it now? Like where you're, it's almost like earmarking funds. Exactly. Yeah. Yeah.

Good observation. Yeah. Now we're being a little more disciplined about making sure that the or maximizing the likelihood that the ultimate recipient is receiving crypto in their pocket, not some in kind donation. So we're testing a number of vectors in terms of the technical sophistication of the recipient, the size, frequency, and duration of the transfers of donations, the macroeconomic situation of the recipients. And there are a whole number of other vectors to test.

But yeah, yeah, we're trying not to do the first thing, which arguably is a lot easier to ask somebody to convert some crypto into either fiat or some good and then transfer it. It's more challenging to give people crypto directly. But we think that's where the real opportunity lies. Yeah. Well, can you talk a little bit more? about how you're figuring out what those applications could be because so as you mentioned,

the goals of Give Crypto are to help people a need, but also promote the adoption of cryptocurrency. So sometimes those things will be aligned and then other times maybe they won't be. So how do you kind of figure out, like what are some examples that you think are kind of prime examples of when that makes sense? Yeah, yeah. I mean, and because we are using crypto to help people, we're obviously not going to be able to help everybody. There's sort of a sad irony in this, that the needier you are, right now, at least, the less likely you are to be able to actually use crypto. So we are having to focus our efforts on areas where there is some degree of technical sophistication,

but also some degree of impetus or need for an alternative financial product, let's say. So like I said, our hypothesis right now, and we're probably going to evolve this as we as we continue to experiment, but our hypothesis is that people have the highest likelihood of using crypto as a currency, i.e. utility phase in places where either money is broken or government is broken. So we're focusing on those places, specifically on groups that have a higher likelihood of actually being able to use crypto, but also are in genuine need of help. And then are there any, like those populations that you described tend to be quite vulnerable, you know, refugees, stateless people. And in a way, at least for now, when Give Crypto is in its early days, you're kind of almost like running financial experiments. Are there ethical issues around that? And if so, how do you figure those out? Yeah, for sure, they're ethical issues. And we're probably, you know, still figuring out what the best way. to grapple with those. Now, we have, we're definitely not working in the most fragile of places where there are serious privacy, sociopolitical risks at play. While we're in this experimentation phase, we're focusing on areas where the ethical risks are perhaps a little bit lower. But that's certainly something that we're figuring out right now and, and will continue to evolve our thinking on. And we've been talking a little bit about how, because it is,

early days in crypto and especially the populations that you guys are targeting are particularly in areas where maybe there isn't an easy way to turn crypto into fiat or to use their crypto. So if you could walk me through some of the examples that you feel like were actually effective that, you know, got into this sweet spot where you had a population that could benefit from cryptocurrency in particular. And yet at the same time, could also turn that into something, you know, that would be useful in in their economy. Can you just walk me through what you think some of the best examples are? Yeah, there's one great example. Just over the border from Venezuela and Brazil, we found a minister of a church who was willing

to help us out. He's been, because he's so close to the Venezuelan border, he's been helping economic refugees from Venezuela for years now. And we asked him do a couple of things for us. target 20 families that were in most need in his community, 20 Venezuelan families near his church. So he helped us with that. But he also set up a little bodega in his church where we, so we were, he targeted the 20 families. We gave them a basic income of $1 per day per family. He also set up a store where inside of his church, believe it or not, where these families

could go and buy food and basic supplies, but not just spend their crypto. So if they'd prefer to get cash, local cash realities in Brazil, he would give them cash as well or instead of selling them food. So it's small, it's contrived, but it is a closed-loop experiment where these families are able to receive crypto and then either get cash or get food for the crypto. And a couple of interesting things have happened. One, we've learned that these families are, for the most part, taking this food and bringing it back to Venezuela, to the town they're from in Venezuela.

So the next phase of the experiment is to do some remittance slash ambassador program where these families help us identify more families in Venezuela that will add to the program. Additionally, some of these initial families have said, you know, the minister is great. He really helps us out. But he's selling us Brazilian food. We want to buy Venezuelan food. If you give me a little bit of money, I can set up my own bodega and sell Venezuelan food to my country people. So we're seeing already, again, very early stage, very preliminary. We're already seeing some kind of entrepreneurial initiative and some organic marketplace

thriving up that we think is super interesting. And something like that where people are sort of helping themselves in a distributed manner is probably part of the longer term story of Give Crypto. Oh, wow. This is really, really interesting. I like it. It's almost, yeah, it's like creating your own. little, what do they call it, an economic development zone or something. Anyway, so we're going to

keep discussing some of the other problems that charitable giving with crypto can solve, but first I'd like to take a quick break for our fabulous sponsors. Face it, regulations can stall or kill a fast-moving crypto business. New FafT and EU cryptocurrency AML laws are coming soon. You could be hit with stiff fines or blacklisted, no matter where your servers are in the world. Prepare now. deploy the same powerful CipherTrace tools used by regulators. Protect your assets, streamline your compliance programs, and keep your exchange or crypto business out of the regulators' crosshairs. Learn how effective anti-money laundering tools help keep your crypto business safe and trusted.

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If you want your crypto donations to go farther, go to we trust. dot I.O. slash unchained and donate through November 27th. I'm speaking with Connie Gallipi of BitGiv and Joe Waltman of Give Crypto. So yeah, so let's talk big picture. What are the problem or what is the problem or problems in charitable giving that crypto can help solve? So the things that we try to focus on, there's actually a lot of benefits. So sometimes our message is hard to deliver. But what we try to focus on is not the fundraising piece because that seems to be what gets, you know, the surface level excitement.

and it's almost like a gateway. But it doesn't really leverage the technology, right, as much. So we try to focus on some of the next steps, the obvious things we can talk to them about, which is, well, if you're going to fundraise in Bitcoin, why not keep it in Bitcoin or crypto in order to then use the blockchain and the ecosystem that's been built to move that money, which happens faster, it's more secure,

and it's transparent on a blockchain. which, you know, it's also less expensive with some people will argue with me about that one time when the fees were high for a few months, right? But we're 10 years into at least Bitcoin. And that was an anomaly period. And we use Bitcoin every day. And it's fractions, pennies to send money globally almost instantly. So there's a lot of money saved as well. So I think those are really great arguments, especially on the fees and the speed. the security issue is definitely there, but for NGOs, it's less understandable or less immediately exciting to them. But as soon as we get into with them, you know, the benefits of cryptography and the benefits of things like multi-signature technology, then they start to understand the benefits of that as well. And then, of course, the transparency aspects, I think, are huge. I mean, as we've discussed, there are some challenges with it right now because the

ecosystem isn't really built out, but the potential is there. The technology provides that opportunity. And once we're able to build out the infrastructure and the ecosystem to catch up to the potential of this technology, the benefit is there to be able to see in real time, money moving all over the world where it's going and what it's being used for. And to me, that's revolutionary. So I'll stop there because like I said, it's a lot. So sometimes it's hard to get it all across. Bet mode activated. The scorebed app here with trusted stats and real-time sports news.

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Canada, reporting on the ground from where you live, telling the stories that matter to all of us, because local news is big news. Choose news, not know. Noise. CBC News. And do you have stats on the fees that charities pay for doing things like cross-border payments or transfers? And also for the speed issue, I don't know if there are stats around how long it takes to get funds to those in need after a disaster. You know, because I imagine that the comparison with cryptos can be pretty stark for both of those. both of those fronts.

Yeah, yeah. Well, so we have, I mean, I don't know if you call it stats because they kind of wide range as far as different ways of working in the world, places, systems, services, all of those things. But generally what we say is like, we know that fees when you use the traditional systems right now can be up to 30%, which is huge. when you talk about paying fees on either side just for the banking, receiving and sending, there's usually some sort of transfer fee in the middle.

You may end up going to something like a Western Union where they alone can charge 12, 13%. And you physically have to go to a Western Union location and stand in line and wait to get your money. in some cases it gets stuck in a bank account. There's a lot of governments around the world that have their fingers and everything. So even though it appears as though the money is in a bank account that belongs to the NGO in, you know, wherever Nairobi or something, they may have to, you know, give somebody a little bit to get it out of the bank account, right? So there's a lot of things, I mean, and I don't mean like a, you know, a legit banking fee. I mean like, you know, someone's bribing them and saying, give me a little bit and then you can get your money kind of thing. So there's all kinds of stuff that goes on.

And we've heard wait times could be up to a month as well. I think that's pretty extreme. But it depends on, you know, where you're sending the money, what kind of regulations and government constraints are placed in that area. but it could take up to a month to physically get the money. So, yeah, I think, you know, obviously there's places where the fees and the times may be less than that, but those are, I think, the extreme scale. And earlier you kind of were outlining the difference in the usage of blockchain technology applied here versus the crypto assets themselves.

So why don't we break it out a little bit further? So what are the ways that you think blockchain technology can help solve the problems in charitable giving? And then what are the ways that crypto assets in particular can be used to solve those issues or different issues in charitable giving? That's a good question. I mean, I think in most cases they go hand in hand in this context. I mean, there are lots of other contexts where people are experimenting with use cases of blockchain technology that may not necessarily. require a, you know, financial value or cryptocurrency attached to the blockchain. But I think in philanthropy, and we've mostly stuck with Bitcoin, it's, it all kind of goes together. So it's,

the infrastructure itself of the blockchain provides this, you know, different system outside of banks and government where in many cases there can be fees, delays, fraud, whatever. It takes it outside of all of that. It provides speed of transmission of funds, lower fees, cryptographic security to convert or to transfer, excuse me. So all of those things are, I guess, separate from crypto, but it's really what are you transferring on the blockchain? You're transferring that value, right?

So it kind of goes hand in hand. I think as far as cryptocurrency itself is concerned, And again, to me, it's all tied to the whole system because if you want to have a way to empower people and reach them directly peer to peer in a way that they have control over their funds or whatever it is you're giving them that's of value, you still need the blockchain ecosystem to provide that. And Joe, our take of it on it is that if you, if you, abstract out to a certain level. Charities basically do three things. They do targeting, deciding who gets the help. They do distribution, delivering the help, and they do tracking, determining if the help helped. Unfortunately, most current charities do these things in a rather centralized manner by privileged Ivy Leaguers of a liberal arts degrees. What if we could create a

platform that pushes as much of this work, the targeting, the distribution, the tracking out to the edge, where there's the local knowledge, where there's the creativity, there was the true desire to help. That's a very interesting platform, if you will, to build. And you can you can incorporate some blockchain primitives using things like staking, like compensation, like incentives to, we believe, to do these things much more effectively at a local level in the communities where the help is actually needed. And how do you measure the impact that you have? Because I imagine that a lot of, even for actually for both of your organizations, because Big Give is working with pretty different organizations and then Give Crypto, obviously, is doing different experiments now.

And at some point, we'll, you know, just have different initiatives. How do you kind of do an to Apple's comparison to figure out where you're getting the most bang for your buck? Yeah, I'd love to hear Connie's answer, but measurement is super difficult. And there's some really great charities all doing a lot of work around this, for example, give directly, where they're even going to the length of taking saliva swabs of the recipients of their basic income to measure cortisone levels because that's apparently a marker of stress. So the way we're thinking about this is what are the things that we can measure at scale with software and what are the things that we can measure with boots on the ground, i.e. the saliva swabs. We'd obviously prefer to do the ones that are scalable measured with software, but we're certainly going to want to do both and what's kind of the right ratio. And maybe if we find a statistically significant subset of the people we're helping and

doing the more hands-on labor-intensive measurement, that's an okay approach. And when you say measured by software, I'm assuming you would still need to figure out which metrics to track, which, again, I feel like might be apples to oranges between projects, right? For sure, for sure. There are going to be different goals of different projects. This is a very big question and a very big subject that we're, I don't have a great answer on right now because we're still experimenting with how we're going to help. So yeah, absolutely. Hopefully you've got the types of projects constraints. to a number of sets and you understand, okay, for type A, these are the metrics we care about

for type B, these other metrics we care about. And Connie, how are you guys handling that at Bikiv? So we, I was mentioning earlier through the GiveTrac platform, we have another component that's about reporting. So right now, the way, you know, nonprofits typically work is you give them some money, you might think it's going to something in particular. And then, you know, at the end of the year, you get an annual report that tells you all the things they did as an organization throughout the year, you don't really know what happened in between, right? And you're also waiting a long time to get that report. So with Give Track, it's all in real time. And that's the benefit of using crypto and blockchain technology. So we have the ability for NGOs to be more

transparent and accountable through the platform with the tracking of funds, but also the reporting. So they can report back in milestones. So as a donor and also the public, you're seeing impact and progress as they go. So up front, you know what they're fundraising for, whatever the project is. And they explain to you what they're going to do with the money. And then you're able to see them making progress towards that along the way. way and then in the end what's completed. So you have two sort of feedback loops. One is the blockchain data and the finance data. The other is this reporting, pictures, videos, that kind of thing.

But as far as being standardized, like you're saying with metrics and things, it is really challenging because if you want to be open to a number of different types of organizations with a variety of missions and projects and places that they work in the world, there's, you know, an exponential amount of metrics you could try to follow. So right now, we're trying to be pretty flexible about that. And we're asking them to share what the impact was in some more standardized ways, like number of people impacted or if it's, you know, education, how many more kids were in the classroom for how many more hours? Or if it's a water project, you know, how many people are served by that project?

to those kinds of things. There's also health impacts, environmental impacts. I mean, it's very difficult to standardize metrics for those things. Yeah, one other thing I wanted to ask you guys about is you guys have different approaches in, for instance, BitGiv is focused on supporting existing projects and then Give Crypto is focused on creating projects. What are the pros and cons of each of these strategies and why did you decide on the one that you're going with? So my background we talked about earlier is in the nonprofit sector. So I've worked with a lot of NGOs doing a lot of amazing work. And, you know, I think many people look at the nonprofit sector and they see these headlines like what happened in Haiti or, you know, there's a number of stories around what happened to the money. And it really negatively affects the sector overall. And most organizations, most, people in those organizations are doing good work and it's their livelihood to give back, right? You know, nobody, most people don't make a whole lot of money working for an NGO.

So my goal was to support the existing organizations that are out there and the professionals that work for them and the knowledge base that has been built in that sector around the work they do. Because like I was just saying, there's so many different causes in, and environmental work and public health work and education and refugees and humanitarian aid and relief efforts. I mean, you name it. And people are specialized and knowledgeable and experienced in these things doing good work. So my goal is to support them, lift them up, find ways to leverage technology to make them more effective, make them more efficient, provide tools for accountability that raises the whole sector, raises the bar.

for the whole sector and ultimately drives more impact in the end through improving efficiencies and improving standards of accountability and those kinds of things. Yeah. Yeah. Our philosophy is definitely a little bit different. First of all, we're very much aligned with the direct cash transfer belief around helping that cash doesn't solve every problem. But for the most part, people in need know what they need and they're going to, to do good things if you just give them money and let them do it. So with that understood, our obvious asset is the cryptocurrency we have and the software development expertise that we have and we're building.

So our belief is that you can, or that one of the key features of blockchain in general and cryptocurrency specifically is that it is very fast and very cheap and very easy to get resources directly into people's hands. If we were to, or we feel that somewhat defeats the purpose of cryptocurrency to, to just transfer it to other organizations who more likely than not will just turn into Fiat as quickly as they possibly can because they're terrified of the volatility and then funnel it through their normal P&L, which may or may not be efficient. So we're building a platform that will hopefully allow people to both donate and receive this,

this new kind of money that we think is especially well suited towards this purpose. And so let's talk a little bit about the history of charitable giving and crypto so far. I feel like the most high profile effort was the Pineapple Fund in which an individual who was early in Bitcoin decided earlier this year to donate a little more than 5,000 Bitcoins, which it probably has to do with the way the prices were. jay rating earlier this year, but I've seen some accounts say it was $86 million. And on its own website, the Pineauville Fund says it was $55 million. There has been actually a sponsor of my show that has been advertising recently, We Trust. And they have a new charitable offering. But when I checked it,

very little had been donated, even though in ads that they're running there saying that they're matching all the donations through Giving Tuesday, finance. Charity Foundation also just announced that it was getting started. And this isn't exactly charity, but the UN World Food Program did have a trial using a private Ethereum blockchain to distribute funds in a refugee camp in Jordan. The man in charge of that program actually was on my other podcast, Unconfirmed. So I will link to that in the show notes. It was a really great episode. But overall, what do you guys think? Do you think the crypto community is doing enough? are there important efforts I miss?

Like what do you think it says that in this space where there is money sort of being created out of thin air and everyone has all these, has pretty idealistic visions about how crypto can democratize finance? Like, what do you think of these efforts and whether or not there could be more that's being done? Yeah, clearly there can be more that can be done. And I don't know if I totally agree with this theory, but I've heard a friend of mine once said that the reason why the crypto community has largely ignored the nonprofit space is

because nonprofits are so terrified of cryptocurrency that they'll, like I said before, they will convert it to fiat as soon as they possibly can. And from a kind of true believer, true crypto believer perspective, these nonprofits are losing out on so much upside if they convert it to fiat. So what idea that this friend had was why don't we set up a vehicle where crypto, owners of cryptocurrency can donate to nonprofits, but the nonprofits can only convert X percent of it per year so that the true upside can be realized or the hopeful upside can be realized when appreciation does ultimately happen. But yeah, I agree that there are kind of embarrassingly few examples of big crypto project or big charitable projects in the crypto space.

Connie, what do you make of that theory? Because you have dealt directly with a lot of these nonprofits. Is that true that they're scared of cryptocurrency? In some cases, yeah. Yeah, they, so we've dealt, we're dealing with many of them, right? And I think that that's our role is it's all about education, exposure, demonstrating the benefits and the potential, getting them excited about it, and working with the ones who are willing to work with it and excited about it. And there's, you know, I mentioned earlier, like, I call it the gateway is the fundraising aspect.

And, you know, they only really get as a sector overall, they only get really excited about that side of it when there's something like the Pineapple Fund going on. And that was largely driven by price, right? So just like everyone else, they're, you know, kind of excited about the value and what it might mean to them, which you can't blame them when everyone else is focused on that too. But I think there are a lot of NGOs that are excited about the technology. itself and largely it's the ones that, you know, are working globally. They're moving money, you know, from the developed world to the developing economies. They're trying to get funds to the most remote areas. They understand, you know, how much time it's taking, how much money it costs. In many cases, it's, you know, it's, it's dangerous, right? Like, if you have someone going to the closest urbanized area to Western Union who works for your, and, you know, it's, it's dangerous. And NGO to get money and then distribute it to these more remote areas, they're a target, right? I mean, everyone gets to know who these people are in these communities, and it's not very safe

for them to be carrying all this cash around. So, I mean, there's a lot of benefits to the tech itself that I think NGOs do see, but it really just depends on who you're talking to, what, you know, what they see in the technology. A lot of the really big. organizations are just very conservative and very risk-averse. You know, similar to like the banks and stuff, right? Like they're looking at this stuff and they have teams that are quote-unquote researching it and whatever. But there are these huge institutions that have very conservative outlooks.

And so even if they are doing projects, it's like an R&D on a private blockchain, right? So, I mean, it's, I think overall, in general, we have a mainstream adoption challenge for the technology and, you know, certain parts of the NGO sector fall into that same, you know, certain category of conservatism and focused on the price and all of that. But it's not everyone. And our focus is working on, like I said, on leveraging the technology itself and working with NGOs who are excited about. that and how to demonstrate that. And there is one project that that was recently announced, a $125 million air drop by a blockchain.com and Ripple, where they're dropping stellar, which is probably

the biggest one to date. Oh, yeah. And I didn't, yeah, I didn't respond to that piece of the question about, you know, the industry itself and philanthropic efforts. And I could say that, you know, since I've been around since 2013, when the industry just started to blossom, you know, it wasn't even really an industry. It was budding community. And we've been going at this for over five years now.

We definitely have a strong base of support, and there is a contingency that, you know, really wants to see what we're working on happen and become a reality. There's a core base that really sees the benefits of the tech itself and wants to demonstrate the benefits of the tech, and they're not, you know, so focused on, you know, day training and exchanges and, you know, the developed world's focus on basically speculation. They're, they're actually believers in the tech itself. They see us as one of the very few organizations that's demonstrating that and pushing the envelope and not just, you know, feeding the masses with whatever they are interested in that doesn't benefit from the technology, really. But I could say

that, yeah, I mean, there could be so much more going on in the industry and support for our efforts, for Give Crypto, for everybody's efforts who are working on these things. It could be much more broadly, I think, supported from the industry than it currently is. And like, Give Crypto and we and I'm sure others have set up structures for that, right? Like, we're a 501c3. We've been no 501c3 since 2014 to offer the tax benefits to people for offsetting capital gains. I mean, even if they don't even care. Just walk through what, just walk through what that means so people understand. So it's so a 501c3 is a nonprofit registered in the U.S. Every country kind of has their own process, but we're here. So and it gives us tax exempt status. It provides a lot of different

benefits on both sides, though. So for us, it's pretty simple. Any sort of capital gains or revenue that we bring in is tax-tax-free, unless we provide some sort of business service, and that's a different category of revenue. But donations where you're not receiving anything in return are tax-free. We focus on taking in Bitcoin and or holding in Bitcoin. So any gains we have on our side, or any capital gains are all tax-free as well. Right. So that's for us. For the donor, it offers the tax right off like they would give to any other charity that's registered. But what's interesting is when you have something like crypto that's considered a property and you have gains on that property, you can offset those gains and not pay taxes on those gains by donating in crypto, right? So you don't want to convert it

first. That doesn't really benefit you as a donor. Right, because you'll pay 15 or 20 percent or whatever on that. Right, right. But a lot of people don't quite understand this. And then they got, especially last year, they got stuck because the price skyrocketed at the last minute, the end of the tax year. Nobody knew what to do. And then they ended up with these huge tax bills because you have to make the contribution before the end of the tax year, it has to be made during that tax year. So you can't wait until April when you're figuring it out and go, oh my God, I owe $2 million in taxes because I got in crypto early. It's too late at that point to offset it. But that's, to me, that's the beauty really is if you have crypto assets that have gains,

you can donate in crypto and offset those gains. We have worked with Libra tax for a long time and they had, I don't know if they still do this, but in early days, they had a really interesting way of helping the crypto asset owner identify the oldest coins with the most gains to donate, right? So when they're donated, the face value is what the charity receives. But when the donor chooses their oldest coins with the most gains, they offset the maximum amount, right? So there's a lot of really beautiful things about, about, just that one topic around this, you know. Yeah.

So I actually now on the flip side, wanted to ask you about what you mentioned before about the regulatory burden for charities working with crypto. What are those burdens? Well, they're not necessarily related to being a charity. So, well, there are some around the accounting aspects, which we, because we got in so early, nobody knew how to handle it. So we spent a lot of time kind of, you know, pioneering and paving the path for like,

how do we even deal with this in our accounting and our taxes and dealing with the IRS. But what I was referring to earlier was actually more around money transmitting licensing and money services business issues. So, you know, we are a nonprofit. And I don't think, you know, it's ethically a good angle for us to start spending all of the money we've received. from donors to get licensed in every state and in every country to be a money transmitter. And unfortunately, that creates a lot of problems for us when we're trying to facilitate, you know, funding between donors and nonprofits.

So we've had to very carefully craft our platform in a way where we're providing a platform, we're providing a service, and we're facilitating the interaction between donors and nonprofits. bits, but BitGiv never actually touches, owns, holds, transfers, or converts any of the money ourselves. And you can imagine that's pretty challenging to do. Yeah, there's another challenge that we're facing. Oh, sorry, go ahead. Go ahead. Well, for both of you, why don't you? Joe, go ahead. You can describe that a little bit further because that's interesting. Yeah, the wrinkles we have to iron out are mostly around K-Y, all these fun acronyms, K-Y-C-A-M-L and OFAC.

A. Y.C. Know your customer. AML. Anti-Money laundering and OFAC Office of Foreign Assets Control. Because we're giving money directly to human beings, not through some other organization that presumably has some legitimate status and is doing some vetting on their end, we have to do a lot of that ourselves. Basically means we want to make sure we don't give any money to any bad people as determined mostly by the U.S. government. So this definitely is a non-trivial endeavor. And we're right now having a lot of fun conversation with lawyers around how we can minimize the likelihood that any of our funds end up in the hands of naughty people. Yeah, there's probably a lot more we could dive into there. But we're running out of time.

So I wanted to ask you about something I had brought up earlier, about how there's been a lot of talk in the space about how crypto can democritize. finance and there's just a lot of idealistic visions that are thrown around when people talk about what this technology could bring about in terms of change and good in the world. But I sort of feel like a lot of these initiatives are kind of going the way things have always gone where there's the industry doing what is doing in its capitalist world, which it's not like I'm against capitalism or anything. I'm definitely not. But then charitable giving is sort of like this separate sphere. And sometimes as an afterthought the way that giving Tuesday is like the last in the string of

these holidays that that are all about like shopping and and being materialistic. So I'm just kind of curious, how do you think the crypto industry can actually live up to this rhetoric that it's been spouting for a long time? Like what changes do you think need to be made to really get to the, to this vision that a lot of the founders in this space are espousing? Well, this is my biggest issue, I can say, because I keep referring back to the infrastructure and the ecosystem and where we're coming up against challenges. And that's where I feel it's significantly lacking is all of the interest is in the first world and in, you know, trading and exchanges. And if we want to see the beauty of what everyone talks about, what this technology can actually do, we have. have to build out a global ecosystem.

So, you know, what I'm trying to do and what Joe is trying to do is so challenging when there's nowhere that people can use this on the ground or convert it even, right? So what I always refer to is bit pesa. I love them. They are so amazing. And I feel like they need to be, there need to be bit pesas everywhere, you know? It doesn't. By the way, Elizabeth.

The founder and CEO of Bitpesa, she was actually my first guest ever on Unchained. And it's an excellent episode for people who missed it. I've had people say, you need to bring her back because she was so amazing, but she was so people, I'll link to that in the show notes. It was a great episode. They are amazing. And like they were at the forefront of exactly what I'm talking about building into essentially like the mobile cash system in Kenya, right?

So if that was still working, which it's kind of now a B-to-B model because of the regulatory issues they came up against. And you have to spend like, you have to be converting, I think it's like $25,000 through them, right? But they've now expanded to like seven other countries because they're like, well, if Kenya's not going to embrace this, we're going to move on. But the concept is there. And if there weren't regulatory issues, it would be amazing. You can essentially plug into a system like M-Pesa that's cash on the ground that they're used to using that already has infrastructure. When I was there, I used it for everything. I paid for my lodging, taxis, food, you name it, from M-Pesa.

But there's regulatory issues stepping in out of fear of the tech, quote-unquote, but I think it's about their concern that the power and the influence is being taken away. that, you know, get in the way. But that doesn't mean that it's not possible, right? We have to somehow break through these things. So I'm going on and on because I'm very passionate about this. But to answer your question, I think if we could have some more investment in businesses and concepts like BitPesa, everywhere in the world, where we can have plugins to cash base system, mobile-based systems, conversion on the ground, ultimately we want to get to the point where or using crypto without having to convert it, but I don't see us getting there anytime soon. So we need that middle ground of building out an ecosystem for it to work.

And Joe, what do you think? How do we get to this idealistic vision? Yeah, the short answer is, I don't know. I waver between trying to be broad and narrow and do a bunch of experiments in a bunch of different places that have very different characteristics versus being very, very broad and narrow. Is that the right? Anyhow, doing a little bit of stuff everywhere or doing a whole bunch of stuff in just one place. And one example, one place that is just, you know, heartbreakingly perfect for crypto is Venezuela right now. They're just, they're going through a situation that, you know, hasn't really been seen since, like, you know,

world wars or great depressions in terms of their inflation and the misery that's happening. So, you know, I oftentimes ask myself, why are we doing anything anywhere but Venezuela right now? And, you know, how can that be justified? So, yeah, the short answer is I don't know. We're doing a lot of experimentation, a lot of getting our hands dirty, giving crypto to people, see what they can and can't do with it, and then hopefully learning from that and improving the way we're doing what we're doing. Well, we'll see how it all turns out. I commend you guys for your efforts.

Where can people learn more about you and your organizations? Well, for BitGiv, we're at BitGiv Foundation.org. And for GiveTrack, we're at givetrack.org. And we're also on all the social media channels as well. GiveCrypto.org. Please come and check it out. Great. Well, thank you both for coming on Unchained.

Thank you. Thank you. Thanks so much for joining us today. To learn more about Connie and BitGiv and Joe and Give Check out the show notes inside your podcast player. New episodes of Unchained come out every Tuesday. If you have until ready, rate review and subscribe on Apple Podcasts. If you liked this episode, share it with your friends on Facebook, Twitter, or LinkedIn.

And if you're not yet subscribed to my other podcast, Unconfirmed, I highly recommend you check it out and subscribe now. Unchained is produced by me, Laura Shin, with help for Rayleigh Gallup Poly, Frasher Recording, Jenny Josephson, and Daniel Ness. Thanks for listening.