Using NFTs for charitable contributions
People often donate money to charities. If you donate enough they will sometimes put your name in their newsletter or on their website. This recognition usually only lasts a brief period of time or, even if it is printed, gets lost and forgotten. What if you could collect proof of all your donations in one spot, regardless of what charity you donated to or when you donated it. What if you could have a single place that you could show people that listed all your good donations and who you support? With NFTs you can!
When you donate to a charity, they create an NFT showing you donated, if it was earmarked for a specific purpose, what you donated (cash or goods/services), and how much you donated (you could choose if it just said you donated, or if it gave a range of donation amounts (ie, between 100 and 500 dollars, between 500-1000 dollars), or if it gave the exact amount you donated (ie $420.69), they then send this NFT to you.
Charities such as the Red Cross often have disasters that require immediate aid, then they have to fund-raise after the fact to refill their funds. With NFTs you could donate money to a specific disaster, they could recognize it and apply it to money they may have already spent for that disaster.
Charities such as the United Way take money in and redirect it to other charities. This could be done with NFTs as well where you donate to the United Way, they create the NFT, then send the money to the charity you specified, even if that charity didn’t know how to use NFTs.
You could give money in memory of or in honor of another person and get an NFT from that charity saying that. You might then want to transfer that NFT to the person you were honoring. “PERSON1 gave a donation to CHARITY in memory of PERSON2”
You could also give on behalf of someone “PERSON1 gave a donation to CHARITY on behalf of PERSON2 in memory of PERSON3” as a concrete example “Joe gave a donation to Save the Quadrupeds on behalf of Fluffy and in memory of Fluffy’s loving guardian Jasmine”.
For periodic donations, the charity can send an NFT for each donation. They could also (either instead, or in addition) send an NFT when you start donating then send another NFT when you stop donating. If you change your donation amount or any other field, they could either send a “stop donating NFT” then send a new “start donating” NFT with the new amount or they could send a “donation change” NFT. A periodic donation NFT, like all others, could hide any field you don’t want publicly known.
Example: Joe donates $20 a month to “Save the Quadrupeds” and gets a “start donation” NFT that indicates “Joe started donating $20 a month to Save the Quadrupeds!” He then changes it to $15 semi-monthly and a new NFT get sent that indicates “Joe started changed his donation to Save the Quadrupeds to $15 semi-monthly”. Then, at some point in the future, if Joe stopped the periodic donations, an NFT would be sent saying “Joe has stopped donating to Save the Quadrupeds”.
People often want to let others know what causes are important to them and to show off who they donate to (and possibly how much they donate). Sometimes charities will have a way for you to tweet or post to facebook about your donations, but that ends up being quickly lost in the hubbub of your feed. You could log your donations on your social media profile but it is easy to forget, and tedious to update, especially if you are active on multiple social media platforms. With NFTs this can be automatic, you could record your NFT address(es) with your social media platform and it could automatically display all the NFTs associated with that address. There is nothing for you to forget to update, everything would be automatic.
Having your donations recorded as NFT’s can help at tax time too. If all your charitable contribution NFTs are stored in address(es) that different than the ones that your non-charitable contribution NFTs, or if the NFTs identify the charity in a way that signifies if it is the type of charity who’s donation is tax advantaged then your tax software could import it directly and use it to prepare your tax return.
There are websites where you can set up memory pages, primarily this is targeted towards memorializing people who have died, but there is no requirement that they are dead. ( An example of this is https://www.mykeeper.com/ ). You could incorporate a giving campaign into this by having an address that NFT’s could be sent to and they would automatically show up on the person’s page. (have to be careful about spam, hate speech, etc. This could be done by letting the page maintainer hide offensive/unwanted NFTs, or making them approve the NFT before it shows up, or by only showing NFTs from a list of approved charities, or sending unwanted NFTs to a different account.)
If you are automatically displaying information about the NFTs in an address but don’t have control over who sends them, there exists the possibility for people to send NFTs that you haven’t requested. This could result in NFT appearing at the address that are spam, offensive, illegal, harassing, or otherwise unwanted. There are several ways to mitigate this issue:
- You could have a way to approve individual NFTs
- you could send unwanted NFTs to a different address
- You could have an “include list” and only NFTs, people/organizations, or content/concepts relating to the NFT you have on the include list would show for the address (you would be able to add or remove from the include list)
- You could have an “exclude list” and NFTs, people/organizations, or content/concepts relating to the NFT you have on the exclude list would not show for the address (you would be able to add or remove from the include list)
- The organization or site/application displaying the NFT’s to humans or other programs/processes could maintain one or more include or exclude list that applies, this could be automatic, or you could decide which include/exclude lists to use (for example there may be separate lists for OFAC entities, offensive speech, etc that you could opt in to or opt out of)
- You could delegate the decision about which NFTs to show to a third party that maintains it’s own criteria for determining what to include or exclude. This delegation could be recorded on an external site or included in data associated with the address, such as in another NFT.
- You could create one or more NFTs that express your wishes about what should be included in or excluded from the display. These NFTs could be modified or removed whenever you want.
There is no reason to limit this to charities or non-profits, any person or organization could set this up for themselves, or on behalf of another person or organization.
- you could have something similar to gofundme but with donations acknowledge by an NFT instead of, or in addition to, current acknowledgements.
- you could have a process where people set up a donation page and accept donations directly, without an intermediary like gofundme.
- you could back a new product or project, in a way similar to kickstarter, but acknowledge funding by an NFT instead of, or in addition to, current acknowledgements
- a company could allow you to back a new product or project through their own website or technology, like kickstarter, but just for that company (or even part of a company)
- you could support a local (or not local) business by donating money to get them through a tough time.
- you could fund a startup and receive tokens acknowledging support (these tokens may, or may not, also represent ownership in the company or shares)
- you could fund a creative project (such as a movie, book, sculpture, photograph(s), etc) and receive tokens acknowledging support. These tokens may, or may not also represent ownership in project or entitle you to any revenue or other benefits resulting from the project.
- you could have one-time or periodic donations to an artist or creator who you are a fan of, similar to what Patreon does. The person/organization receiving it could send the NFT, or, if there is an intermediary site (such as Patreon) that site could send the NFT on the person/organization behalf.
- You could have NFT’s for purchases, every time you purchased something you may be given an option to receive an NFT stating that. This could be done instead of, or in addition to, any current purchase recognition a company has (such as posting to facebook) and could be decided at a per-purchase level or at the store’s account level. This could go to the same address or to a different address as your donations.
All of these possibilities are referred to as donating or giving or a donation. You could have the same address to receive all of these NFTs, or you could have a different address for each, or group them into addresses in any manner you desire.
There is also no reason to limit this to people doing the giving, organizations could also give, as could animals, pets or even inanimate objects. Likewise “money” should be read as anything of monetary or sentimental value including, but not limited to cash, stocks, goods, services, publicity, or other items).
There are several ways the acknowledgement of a donation in an NFT could be formated/structured.
- entirely free form (“Yo! this dude John just donated some scratch to us.”)
- Free text that has enough rules to be machine parsable
- text that follows one of multiple templates (“PERSON1( and PERSON1A)* gave a donation to CHARITY in (memory|honor) of PERSON2( and PERSON1A)*” or “PERSON donated $DOLLARS to CHARITY)”
- as free text with a controlled vocabulary for certain parts of the information (to acknowledge a donation you must use “donated” or “gave a donation”, if it was for another person you must use “in memory of” or “in honor of” or “out of respect for”)
- As structured text (such as yaml, xml, json, protocol buffers, etc)
- As structured text (such as yaml, xml, json, protocol buffers, etc) with an arbitrary schema
- As structured text with a specific structure using a specific schema
- as an image, video, 3d model, audio or any other digital object (a digital object is anything that can be represented as a byte stream)
You could make it so it allowed one or more of the above to be used, you could have for example, and entirely free form text, plus structured text, plus an image.
In addition to the above, you could also allow the sender to include a personalized message (like “You rock dad!”), include a link or reference to an external location (examples: any URN such as URL, URI, http link, mailto email address, physical address, geographic coordinates, reference to published material (book, magazine, newspaper, poster, photograph, etc) or a particular page in a publication, place name, etc) or an image, video, 3d model, or any other digital object.
In addition to the above, you could have information about the charity/organization this could be included in the NFT directly or known by looking at who controls the smart contract that issued the NFT.
In addition to the above, you could have information about the person or organization that donated. This might be their name, image or other digital object, contact information, relationship to the honoree, identifier for that person (unique or not) link or other reference to them.
As an illustrative example you could have:
<nft name="xyz" type="donation"> <donator> <name>Joe Smith</name> <url>https://example.com/john.smith/</url> <location>Anytown, USA</location> <contact type="qwert">@jsmith007</contact> </donator> <donatee> <name>Save the Quadrupeds</name> <url>https://example.com/quadruped/</url> <description>Dedicated to saving all quadrupeds, everywhere.</description> </donatee> <onbehalfof> <name>Fluffy Smith</name> <goesby>Fluffy</goesby> <digitalObject type="audio" name="Fluffy barking">ENCODEDBYTESTREAM</digitalObject> <image>https://example.com/fluffy.smith/me.jpg</image> <onbehalfof> <honoree type="memoryof"> <name>Jasmine Smith</name> <goesby>Jasmine</goesby> <dob>1969-01-01</dob> <dod>2021-03-23</dod> <relationship>loving guardian</relationship> </honoree> <quote>She always remembered to feed me</quote> <textAcknowlegement>Joe Smith gave a donation to Save the Quadrupeds on behalf of Fluffy and in memory of Fluffy's loving guardian Jasmine</textAcknowlegement> </nft>
Using NFTs for sponsorships
Large companies often sponsor well-known individuals for long periods of time for a significant amount of money. Why is this? because sponsorship is hard to organize, it takes time, and often includes contract negotiation. What if you could make sponsorship so easy that you could do it in just a flew clicks? What if you, the sponsor, could get your sponsorship recorded in the blockchain as a lasting reminder of what you did? If so, you could sponsor for shorter time periods and for less money. What if you could sponsor your favorite artist for a day, or even an hour? This is pretty much just donating money to them, but with a permanent record and bragging rights of what you did. A fan probably couldn’t sponsor their favorite music group’s tour, but they could sponsor a specific show, or a meaningful day. What if you could sponsor a day of your favorite influencer’s travels or a day of your favorite painters’ time? Do you want to sponsor a specific blog post of your favorite blogger? With Non Fungible Tokens (NFTs), now you can! You could even give these sponsorships to friends for birthdays/graduations/anniversaries/etc, imagine sponsoring your friends favorite singer for their birthday and giving them the token that proves it.
You, the sponsor get a permanent record of your sponsorship with an NFT (that is possibly non-transferable) you could show off how often you sponsored the person, or how many people you have sponsored. This becomes a brag wall of what you have done.
NFT Sponsorships don’t have to be only for sponsoring people or groups, you could also sponsor specific events, actions or to pay for things to happen
- be a sponsor of a conference or convention
- sponsor the planting of one or more trees or other plants (the NFT could include where the thing was planted)
- sponsor the scanning of a book, movie, or artifact (The NFT could include which item you sponsored)
- sponsor the restoration or conservation of a book, movie, artifact, building, or item of historical interest
- sponsor a building or the renovation or improvements of a building (or part of a building) Many organizations allow for benefactors to have this type of sponsorship. Often a plaque listing the names of sponsors/contributors is erected. This is the NFT equivalent of that plaque.
- sponsor an animal at a zoo or animal park
Should you be able to sell a NFT sponsorship that you have bought? In other words, should there be a secondary market for sponsorships. In some cases you may not want a secondary market, but in other cases it is beneficial, and, in yet other cases, you may want to allow resale but tightly control who it gets resold to, so all options should be available (this is not to say every NFT platform must allow all types of sponsorship, there could easily be an NFT platform that only allowed non-resellable NFT sponsorships, another NFT platform that only allowed resellable NFT sponsorships, and a third that allowed non-resellable, resellable, and permissioned-resellable NFT sponsorships and yet others that provide different combinations).The case for non-resellable NFTs.
The case for non-resellable NFTs.
In some cases, the parties involved in the original NFT sponsorship want to make a firm commitment to each other. This could also be useful when the NFT creator is very sensitive about who sponsors them.
The case for permissioned-resellable NFTs.
Some times who sponsors you is just as important as how much money you get from the sponsorship. If you have a brand that carefully curates who it associates with then you might not want to allow just anyone to sponsor you, and likewise, you wouldn’t want to have sponsorship of your brand be sold on a secondary market to someone who would tarnish your brand. This is like when large brand advertisers refuse to let their ads run on certain websites or when websites don’t allow certain brands to advertise on the site. The transfer of the NFT sponsorship could only occur if all parties involved in the transaction approve of it.
Another type of permissioning could be time based, transfers are allowed until a certain date (or block height) then disallowed after that. This is particularly useful for sponsoring events that happen on a certain day, you could allow transfers up until the actual event (or even cut off the transfers some time before the event so you could finalize the program), then disallow it after. This gives a permanent record of who sponsored the event without the possibility of ‘rewriting history’.
The case for resellable NFTs.
This is an interesting option because it allows a robust secondary market in sponsorship NFTs. This is conceptually similar to how the stock market operates today. A company creates and sells shares and these shares can be resold by whomever buys them. The company doesn’t get any money on the resale of the shares but it still benefits from allowing the resale because it encourages early investors (who buy low and sell high) and later investors (who buy high and hope to sell higher). Unlike with stocks, with NFTs you could enforce the original creator gets a percentage of any resale.
This type of NFT allows for effectively venture capital in sponsorships. You could have investors (or venture sponsors) buying a wide variety of sponsorships early, before success of whatever was being sponsored was assured. That venture sponsor could then sell the sponsorships with successful outcomes (whatever the definition of success happens to be) at a profit, while selling the unsuccessful (or even less successful) at a loss, if they can sell them at all.
Why would someone buy a NFT sponsorship on the secondary market (generally for more money) instead of just buying the NFT sponsorship directly from the creator (generally for less money)? Mostly because of risk. If they sponsor, for instance, a book expecting to get publicity from it in return and the book never gets finished they don’t get value for what they payed. If however some venture sponsor bought the sponsorship early and took the risk of the book not being written, they could profit and the final sponsor would know the value of the sponsorship they are buying (they always know the price, they don’t know the value until after the book is written and published and they see how it is received). There is also brand risk, if a brand bought a sponsorship of the book early then the book ended up containing offensive content, their brand could be tarnished by ever having been associated with it.
Why would someone create and sell an NFT sponsorship opportunity and allow it to be resold? Selling an NFT sponsorship early for resale will probably result in less money for the original seller. That seller benefits however because they get the money earlier, before the work is done and can use the money to complete the work. Again, using an author as an example, if the author wants to write a book, how does he survive while it is being written? Often authors who are not well known will need to have another job that pays the bills. That leaves less time to write the book. Selling an early NFT sponsorship can provide enough money for them to live and write full time.
I’ve used books as an example because it is straightforward to understand, but this concept is in no way limited to books, it equally applies to all the sponsorship options.
Notes on permissioned resellable NFT sponsorships
- when a sale is proposed, the generator of the NFT sponsorship (the person or entitie being sponsored must approve
- this approval could be a ‘hard’ approval where the NFT generator has to accept or reject the transfer otherwise the transfer stays pending unless canceled by the current owner
- this approval could be a ‘soft’ approval where NFT generator has a certain amount of time to accept or reject the transfer and if neither option is selected in the given time then the default action happens
- the default action could be to accept the transfer
- the default action could be to reject the transfer
NFT Art thoughts
Recently NFT (Non Fungible Token) based art (and other copyrighted works of authorship) has made the news and I must say, when someone buys NFT art, I’m not sure what they bought besides the token itself. Non Fungible Tokens are easy to make, so the value isn’t purely in the existence of the token, so what was sold? What rights does the new owner have?
Generally, the art you make is copyright to you, and the NFT sale isn’t selling the copyright (Mintable does allow, but not require, transfer of the copyright as part of the sale). So you don’t get the copyright. You also don’t get a physical copy of whatever the NFT represents (again, there are exceptions). Likewise you don’t get any licensing rights. You don’t get any standard ownership rights in the art, so I conclude you don’t actually own the artwork. You do own the right to say you own the NFT version of the artwork, and maybe you own the right to say you own the artwork (even though you don’t actually own it). Is that worth something? I’m unconvinced. In the future, the rules of what you own will get worked out more clearly (perhaps by the courts), and, once those rules are clear, it will become easier to assign value to the NFTs, but until then, it is hard to see real value.
et’s take a specific recent example of an NFT sale. On March 22, 2021, Jack Dorsey (the founder of Twitter) sold his first tweet as an NFT for over 2.9 million dollars. What does the buyer own? Can he claim the tweet is his? (No, it is still Jack Dorsey’s.) Can he sent a DMCA request to Twitter and force them to take it down? (No, he doesn’t own the copyright.) Can he sue Jack and make him remove it himself? I doubt it, but if he were successful, that would show real ownership. An owner gets to decide how and where his possessions are displayed.
When you buy a physical painting, you don’t get copyright of it either, the creator can still make copies and sell those too. But you do get to decide how and where (and even if) it gets displayed. In some countries the creator may have some rights to veto your choice (no you can’t allow my painting to be displayed at $(museum of something I strongly object to) ), but they also can’t force you to display it somewhere. That is crucial to ownership and it doesn’t seem to apply to NFT creations, without that I don’t see a transfer of ownership to have occurred.
Just because I don’t fully understand what is being sold doesn’t mean I won’t try and get some first hand experience though. Maybe I’ll learn something. I have created an NFT for sale on Mintable to try and understand the process and the value proposition. Who knows, maybe someone will like it enough to buy it.
Aside from this current infatuation with NFT art, I see a huge potential for NFTs and I’ll talk about some of that potential in the future. NFT’s are very similar to “colored coins” but a much cleaner implementation. Colored coins were a way to encode information into a cryptocoin (or transaction) so that it could represent something else. Usually what it represented was ownership of a physical thing.
Imagine if all the property records were stored on a blockchain as NFT’s it would be trivial to look up who owned a piece of property and if anyone else had any rights to it (such as a mortgage, lien, or mineral rights) This would make it so much easier than it is today to find this information and it would make title searches be trivial. It would greatly improve the current paper based process. This type of NFT would represent true ownership, not the weird thing art NFTs call ownership.
It is also a great way to record the sale of certain rights that are done with one-off contracts today. Want to sell the right to license a photo of yours? create an NFT representing that right and sell it. Want the right to just be the right to license a photo for advertising, or just for use on calendars? you can make the rights you sell as narrow or broad as you want. That would be a useful NFT.
IntelliThoughts 