“I strongly recommend all young entrepreneurs to invest in NFTs.” ~ Anuj Jasani
2021 was a year defined by numerous societal disruptions. Covid variants, climactic catastrophes, a foiled military withdrawal, tense courtcases, and unexpected economic down-turns. Although the vastness of such a year could never be fully summarized with a single word, several prominent dictionary companies have attempted to do so.
“Allyship,” for example, is Dictionary.com’s Word of The Year. According to the site, “allyship” may be defined as the role of an individual who advocates for inclusion of a “marginalized or politicized group” in solidarity, but not as a member. On the other hand, while the Oxford English Dictionary chose the Covid-related phrase “vax,” Merriam-Webster preferred the more traditional word “vaccine.” Meanwhile, Cambridge Dictionary chose the word “perseverance” after it was looked up more than 243,000 times in 2021, when NASA’s Perseverance Rover made its final descent to the surface of Mars.
Surprisingly, the Scotland-based Collins Dictionary selected the more avant-garde acronym “NFT” (non-fungible token) as their Word of The Year as use of the term increased by 11,000% in 2021. According to Collins an NFT is “a unique digital certificate registered in a blockchain, that is used to record ownership of an asset such as an artwork or a collectible.” Other words considered by the Collins Dictionary included “climate anxiety,” “double-vaxxed,” and “Metavers,” a virtual world where people can socialize, work, and play. Remarkably, “Metavers,” is the concept Facebook recently changed its name to.
“It’s unusual for an abbreviation to experience such a meteoric rise in usage, but the data we have from the Collins Corpus reflects the remarkable ascendancy of the NFT in 2021,” says Managing Director of Collins Learning Alex Beecroft. “NFTs seem to be everywhere, from the arts sections to the financial pages and in galleries and auction houses and across social media platforms. Whether the NFT will have a lasting influence is yet to be determined, but its sudden presence in conversations around the world makes it very clearly our word of the year.”
Excitement around NFTs reached a crescendo in March, 2021 when surrealist digital artist Beeple made history by selling an NFT collage of all the images he created since he committed in 2007 to making one every day. Beeple’s NFT called Everydays: The First 5,000 Days, sold at Christie’s for $69 million. In addition to Beeple, NFTs for both the viral YouTube video Charlie Bit Me, and the meme art Nyan Cat sold for more than half a million dollars each. While an NFT Tweet by Jack Dorsey was purchased for $3M, and a picture of Lindsay Lohan’s face went for $50,000. Even actor William Shatner was able to sell 125,000 NFTs of various movie scenes pictures of himself in nine minutes. Most recently, the digital artist Pak sold an NFT of his newest creation called, The Merge, on December 2, 2021. It officially became the most expensive NFT ever sold for $91.8M.
Apart from their obvious for-profit aesthetic utility, NFTs provide valuable fundraising opportunities for entrepreneurial philanthropic organizations. Interesting enough, in May of this year, the Merriam-Webster Dictionary auctioned an NFT of their definition of an NFT, and donated the proceeds ($37,000) to Teach For All, a network of nonprofit organizations from 60 countries aiming to tackle educational inequality around the world.
According to Forbes, an NFT is a digital asset that “represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.” In many ways, digital artwork and other digital assets are analogous to traditional artwork and other valued physical assets. NFTs are useful because they solve a real-world problem of how to track ownership of things that are themselves completely digital and where “ownership” is inherently hard to prove or demonstrate. NFTs can not only show ownership but also its provenance, that is, who sold what, when, and to whom.
NFTs have the potential of greatly increasing the respective annual operating budgets of many charitable organizations. Understanding this prospective, The American Red Cross began accepting Bitcoin donations in 2014. The organization admitted cryptocurrency donations in 2019 for disaster-prone areas to help ensure frictionless banking and money management from the ease of a mobile phone. While UNICEF started its CryptoFund in 2019, The Salvation Army joined this small group of early adapting nonprofits by launching its own digital cryptocurrency sites in 2020.
Media star Ellen DeGeneres sold an NFT and raised $33,495 for the nonprofit World Central Kitchen. Soccer icon Pelé donated 90% of the profits from an auction of NFT trading cards to his eponymous Pelé Foundation. And a project called NFT4Good sold Asian celebrity NFT trading cards for $88 each, raising $80,000 for #HateIsAVirus, an Asian American and Pacific Islander oriented anti-racism nonprofit. Finally, the British computer scientist Tim Berners-Lee, whose work was instrumental in building the Internet, auctioned an NFT of his original Internet source code for $5.3 million, with the proceeds going to philanthropic initiatives Berners-Lee and his wife support.
Most recently, on Tuesday December 21st, an NFT of the first text message ever sent, a holiday greeting that simply reads “Merry Christmas,” was auctioned in Paris for $121,000. The message was sent by a Vodafone engineer Neil Papworth from his computer to his manager in the United Kingdom. The manager received the message on a four-pound “Orbitel” phone. The text, which was originally sent on Dec. 3, 1992, was sold by the British wireless company Vodafone with proceeds from the sale going to the United Nations Refugee Agency.
Apart from charities, churches and other Faith-based organizations, have also implemented NFT and other crypto fundraising strategies. The Roman Catholic Mission of Bangkok, for example, recently released an NFT of a detailed mosaic of photographic images of Pope Francis, which were taken during his Apostolic Visit to Thailand in November, 2019. The NFT collage was made of 350 different unique photos that come from the visit and commemorates the 350th anniversary of the arrival of Catholicism to Thailand. All proceeds from the NFT auction will go to Communita Incontro School in Pathum Thani, Thailand. Established in 2004, the school provides free education to socially disadvantaged children.
Apart from the Roman Catholic Mission of Bangkok, Portugal’s Santa Casa da Misericórdia de Lisboa (SCML), a 500-year-old charitable organization with a massive collection of Catholic art, released NFTs of four of their prized masterpieces alongside digital replicas of a reliquary of St. Francis Xavier on December 1, 2021. The focus of the world’s first religious relic NFT Drop for charity was Saint Francis Xavier (1506 – 1552) who was the co-founder of the Society of Jesus (Jesuits). Finally, the Vatican will soon be launching VatiCoin, the official cryptocurrency of Catholicism, which officials hope will supplement offerings received by parishes and empower the church to more effectively advance its global mission.
There are five primary ways that NFTs can be used to help support nonprofit organizations: (1) corporate giving partnerships, (2) celebrity-driven NFT auctions, (3) charitable investments, (4) direct donations, and (5) the leveraging of internal assets. By hosting an NFT auction for a specific charity, well-known corporate partners can help artists use their creative powers to raise large sums of money for philanthropic causes. For example, the Coca-Cola corporation recently partnered with 3D artists at Tafi, a digital branding company that develops personalized avatars, and raised nearly $600,00 for the Special Olympics.
Apart from celebrity-driven events that raise the visibility of a charity by auctioning never-before-seen photographs of famous people, NFTs are also considered by many as a charitable investment. Instead of donating a cash gift, a generous collector can choose to purchase and donate an NFT directly to charity. Fourthly, artists can simply identify an impactful charity and coordinate with them directly, without any celebrity endorsements or corporate backing. In August 2021, Trippy Bunny, a collection of 1,111 randomly generated NFT memes, donated $221,000 from mint sales proceeds (100%) of a flagship drop to the American Foundation for Suicide Prevention.
The fifth and final way that charities can deploy an NFT strategy is by leveraging their own valued assets. Like the Roman Catholic Mission of Bangkok, and Portugal’s Santa Casa da Misericórdia de Lisboa (SCML), nonprofit organizations can mint NFTs from their cache of historical artifacts. Biographies, historically impactful letters, commemorative photographs, mission and emergency relief trip videos, program/service implements, and client endorsements are a few of the internal assets that a nonprofit can utilize to generate its own value stream. In the end, any branding images, messages, music, and paraphernalia can be used for this purpose.
Could NFTs become a standard in nonprofit fundraising? Before their adoption, charities should strive to understand NFTs well enough to know about their potential dangers as well as their virtues. While exploding in popularity, it remains unclear as to how NFTs will fit into the existing legal and regulatory frameworks that govern the financial, technology and cryptocurrency industries. Although there are laws that govern the behavior of NFT activities, it is essential to ensure that nonprofits and their donors are aware of what they are doing. NFT issues that, consequently, might be included in such a comprehensive examination are: (1) consumer information laws, (2) copyright and intellectual property regulations, (3) counterfeiting, (4) securities tax laws, and (5) the possibility of the emergence of token-based digital currency.
In any event, according to Kevin Pang, CEO of Mars Panda, NFTs are a valuable way to raise funds for charity. “As we move towards Web3, the decentralized internet of the future, we believe that NFTs will evolve and take on use cases of greater significance and importance. It could fundamentally change the distribution and management of assets into a more equitable and transparent manner… The untapped community of potential philanthropists interested in NFTs,” insists Pang, “is a force to be reckoned with, and just harnessing 1% of the annual sales of NFTs for charity could herald a paradigm shift in philanthropy.”
Before concluding this discussion, one final question remains. As a piece of digital information, where does the value of an NFT come from? The concept of societal agreement is key to framing a partial answer. Since a photo negative is still just a piece of celluloid, its value is derived from the societal agreement that an original item has higher value than its reproductions. Consequently, people are willing to pay for ownership of original items. But why does society place such high value on original works? While many covet originals because of the value that wider society places on them, perhaps the more basic query is, why does anyone value originals in the first place?
In their 2012 journal article, “Art and Authenticity: The Importance of Originals in Judgments of Value,” George Newman and Paul Bloom tested two possible explanations as to the question of societal value. One is that society values original art work because of the originality of the creative performance that led to it. The other is that society feels that an original piece is somehow infused with the unique essence of its creator, much like culture cherishes mundane items that once belonged to celebrities.
Newman and Bloom conclude that society cherishes an original piece of art “because we value, not just the end product, but the originality of the performance that created it.” Moreover, after conducting five experiments with 180 participants, the authors believe that “original work has a special quality about it because it came from the very hand of a particular artist/creator.”
Attempts at assigning intrinsic value to creation and/or the material have a tendency of piloting to questionable positions. Instead of intrinsic and/or instrumental value, creation has “inherent” value, that value that is determined by (1) its proper relationship to the value giver, and (2) according to how well it fulfills its creator’s purpose.
The biblical doctrine that humans are created in the image of God is the theological reason why people write literature and paint pictures and compose music. They create because they have been endowed with God’s image. But the arts also permeate all life. Consequently, the inherent value of creation itself is maximized when it fulfills the purpose for which it was fashioned, that is, the glorification of its Creator (Rom 1:19–20).
Understood in such a fashion, God is both the Creator and Primordial NFT owner. One might playfully postulate that “He came into His own” (Creation) to redeem the Token of His Love (John 1:11). Every so-called “original” work expresses a portion of His creative purpose. Conceivably, this might actually be the driving force behind humanity’s desire to possess an NFT, if only for a short lifetime?
Perhaps, this might actually be the charm that helped the Collins Dictionary choose their 2021 Word of the Year.