NFT Charity vs Charity Tokens: What’s the best way to support causes you believe in?

Milk and Butter LLC
6 min readJan 28, 2022

NFTs have taken the world by storm by opening new avenues in which digital art can be sold. Why only art? Any kind of digitized media can be sold! NFTs have been trending in social media since last year and the hype doesn’t seem to stop anytime soon. Many individual artists have made a fortune from selling digital art in the form of NFTs — like Jack Dorsey selling his first tweet as an NFT and Mike Winklemann (or Beeple, as he is best known as) selling his NFT collection for a whopping $69.3 million at Christie’s.

All it takes to sell an NFT is to have some kind of digital asset or art listed on one of the various NFT marketplaces like OpenSea, which can then be sold to any patron in possession of a crypto wallet. All while the transaction is recorded and stored on the blockchain.

Blockchain technology has been instrumental in the creation of NFTs, or non-fungible tokens. Blockchain helps in making sure that the minted NFT is one of a kind, tamper-proof, theft-proof, and unalterable, and helps trace back any transaction to its original source, due to the nature of its virtually hack-proof ledgers. This verifies the ownership of all NFTs and creates the ultimate proof of digital ownership of any kind of art or asset. But most of what we see is people buying these NFTs for themselves, probably for future use in their own metaverse. Is there a higher motive associated with the sale of NFTs? If not, can there be?

Charity on the blockchain?

Humans are social animals and, even though some of us might tend to be on the selfish side, humans as a species have shown extraordinary amounts of selfless care throughout our evolution. It is natural to feel pain when we see others in pain, and that is what helps us empathize with and help people who are in dire need. Charities can be traced back to decades, even centuries, ago where the financially stable would pool together money to help those in need. Charities have largely remained unchanged up until now, where the technological advancements in blockchain have brought us novel ways to donate and support charities.

Cryptocurrency charity has grown by leaps and bounds over the last year, as the pandemic saw a reduction in physical auctions due to social distancing rules. This encouraged charities to try out new avenues to make sure that the pandemic didn’t dampen people’s spirit of giving. This also enabled people to donate internationally, as these charities were no longer geography-restricted. Some charities have been accepting cryptocurrencies for a while now.

The American Red Cross has been accepting Bitcoin donations since 2014, while UNICEF started accepting crypto donations in 2019. This led to a mass acceptance of crypto donations and, with more people having crypto wallets than ever before, 2019 also saw a rise in first-time donors. The pandemic also saw the rise of start-ups like The Giving Block, which would accept donations in crypto and donate them to other smaller nonprofits.

We all are already familiar with art houses and other renowned auction houses that sell priceless pieces of art to raise money for nonprofit organizations. These art pieces sell in the millions, with the art houses keeping a small amount for themselves while giving away the rest as a charitable donation. But with the advent of blockchain and the growing interest of people in NFTs, these charities have a new facet to them. As we previously saw how blockchain enables artists to sell their digital art, NFTs can also be used to sell art where the ulterior goal is to raise money for charities. The overall feeling regarding charities remains the same; it’s just the means that is changing.

Blockchain charity: the “what’s” and the “why’s”

Now, if you’re an individual looking to give back to people with the help of blockchain, there are two ways you can go about it. The first one is the more traditional: buying and selling digital art as NFTs. A patron buys the digital art or asset from the artist through an NFT platform, and the proceeds of the NFT sale go to the nonprofit. In this case, the artist or the platform is affiliated with the nonprofit and can be seen on their websites. Many celebrities are using this method to raise funds for charity through the sale of NFTs. NBA star Shaquille O’Neal ventured into the NFT space to raise money for charity. The other way — and this is the interesting one — is to buy the charity tokens of the non-profit you wish to support.

NFT auctions work the same way as regular auctions. An artist or a company mints exclusive NFT art, which is showcased on one of many marketplaces. The only prerequisite to buying an NFT is to have a crypto wallet with acceptable cryptocurrency such as BTC or ETH. Once you are sure that the artist supports the cause that you want to help, you make the purchase, the proceeds of which go towards the non-profit. A percentage of the sale might go towards the artist, the marketplace and the gas fee, but, if it’s a reputable marketplace, you can be assured that the sale will go towards supporting the cause.

Now, on the other hand, we have charity tokens. Although charity tokens and NFT auctions are based on blockchain technology, they are fundamentally different in the way they operate. NFTs are typically sold on the Ethereum blockchain and result in the transfer of art in exchange for cryptocurrency. Charity tokens, on the other hand, enable you to buy specific tokens of the cause you support, directly from the nonprofit. You don’t have to go through a marketplace or any middlemen to help support your causes. All it takes is a little research to find tokens that are aligned with your interests and buy the tokens in any quantity you wish to. These tokens directly translate to real-world money which then helps pay for charitable work.

For instance, the Milk and Butter token has direct partnerships with nonprofits like Food for Life Global, Action Against Hunger and Good360. Every sale of the Milk and Butter tokens helps the gamified charitable giving organization to raise money to donate to these causes. These are generally very close partnerships and, since all transactions are recorded on the blockchain, you can easily cross-verify whether the funds have gone where they belong or not.

Which path should you take?

Nobody can tell you which is the “better” or the only way to donate. Both have their own advantages and drawbacks. In an NFT auction, for instance, you might not know how much of the sales goes to the nonprofits, unless stated otherwise. This could raise questions over the legitimacy of the auction as people are known to take advantage of the “giving nature” that humans innately have. Charitable tokens, on the other hand, aren’t above reproach either. Unless they come from an organization you trust, these tokens can be scams too. They are sold for insane amounts in a classic “pump-and-dump” scheme and the creators may then run away without a trace, leaving your money in bad hands.

All in all, charity is a noble cause. To be able to give to the less fortunate, to provide for their basic needs, is a feeling that cannot be fulfilled with material possession. Humans have been charitable for millennia and will continue to do so. With rapid advancements in technology, the only aspect that changes is the way we hand out charitable donations. The pandemic has brought out the best in all of us where everyone tried to help the needy in their own capacity. With the introduction of NFT auctions and charity tokens, it has now become easier than ever to support a noble cause.

See also the recent donation made by Milk and Butter LLC here.



Milk and Butter LLC

The Milk and Butter token is a fun way for token holders to give back to society. Charity fees are collected on every transaction.