The marketing and advertising world has become obsessed with NFTs and how businesses can profit from the brave new world of art, commerce, and blockchain. But what exactly are these enigmatic items, and how can they potentially be used in the nonprofit sector? Let’s start off with knowing what is an NFT?
What is NFT?
Do you know what non-fungible means? The ability of a good or asset to be interchanged with other individual goods or assets of the same type is referred to as fungibility. The US dollar is a liquid asset. A fungible exchange would be if you gave me four quarters and I gave you a dollar back. We traded something valuable for something equally valuable.
An NFT is a physical object which is converted into a digital asset such as artwork, music, in-game items, and videos. They are bought and sold online, usually using cryptocurrency, and are normally encoded with the same primary software as a lot of cryptos. It is a one-of-a-kind blockchain asset with unique identification codes and metadata. This information allows it to be distinguished from similar assets. Meanwhile, through a process known as “tokenization,” NFTs represent real-world items.
These assets can be artwork, real estate, people’s identities, or even property rights. Creating a digital token to describe these objects on a secure network, such as the blockchain, increases the accessibility of buying, selling, and trading. These digital transactions also include claims to exclusive ownership.
Cryptocurrencies, like real money, are fungible. That is, they can be exchanged or traded for other currencies. One Bitcoin or Ethereum is always worth the same as another. NFTs, on the other hand, are the polar opposite. NFTs, as the name implies, are non-fungible. Because each token is exclusive, their values cannot be equal. These valuable digital assets are also extensible, which means that two of them can be combined to form a third token. Want to learn more on NFT? Checkout anime inspired nft in malaysia market here.
Using the blockchain, NFTs enable you to buy and sell ownership of unique digital items while also keeping track of who owns them. An NFT can be one-of-a-kind or one of many copies, but the blockchain keeps track of who owns the file. With NFTs skyrocketing in the current market, how does it help the non-profit organisations? Let’s dive into it.
How does NFT help non-profit organisations?
1. NFTs offer an additional avenue for fundraising
- This is one of the most common reasons why non-profit organisations should tap into the NFT world. Issuing new NFTs can supplement traditional fundraising efforts. Someone purchases an NFT from your nonprofit or an NFT artist with whom you have partnered, and your organisation receives a donation. These crypto donations can be received by your nonprofit. If the prospect of receiving cryptocurrency donations from your NFT sales makes you nervous, there are a few NFT marketplaces that accept credit cards.
2. Nonprofits Can Benefit from a Secondhand Market
- The typical exchange between nonprofits and their key stakeholders which are donors and volunteers entails a donor or volunteer giving an organisation time or money in exchange for the satisfaction of knowing they’re contributing to a worthwhile cause and/or receiving some level of recognition. This recognition from nonprofits can take the form of anything from swag to naming rights. However, once a pledge is made and a donation is received, the exchange is typically completed, at least until the organisation re-engages the donor or volunteers for another donation.
- Suddenly, a nonprofit shifts from being a relationship manager to one who incentivizes and encourages a thriving marketplace. To do so, a nonprofit must concentrate on analysing their industry in order to create favourable terms for their buyers, as well as creating marketing moments when an investor may want to resell their NFT in order to profit.
3. NFTs as community builders
- NFTs can reflect your personality, ethos, and values. It reflects your membership in that community. Nonprofit-related NFTs give people a new way to say to the world that I am passionate about this issue.
- However, minting or purchasing NFTs is only the first step in demonstrating to the world what issues you value. One thing unites the majority of successful NFT projects. Each has energised a group of people to continue their passion for the same art through continued participation on discord servers, Twitter, in-person events, and NFT roadmaps for future engagements.
- These NFT collections frequently make owners feel like they are part of a club. All successful nonprofits achieve the same goal: making their donors and volunteers feel like they are part of a community and that their opinions are valued. When someone buys one of these exclusive NFTs, they are often buying their way into the community as well as a piece of art.
What are the best practices for using NFTs for Fundraising?
Knowing how valuable NFTs can be in terms of generating funds, it is critical to understand how to best leverage them. Use some of these best practises for using NFTs to fundraise to successfully raise funds for your organisation or chosen cause:
1. Get connected with an NFT artist, creator or project
- For NFT fundraising, almost anything can be converted into a digital asset. To begin, have it minted and uploaded to the blockchain. Increase market recognition by using company logos and branded images.
- Creating, minting, and uploading an NFT is a simple process that almost everyone can do. Some NFT artists and creators, on the other hand, may be able to handle the process for you. Consider what is best for your company.
2. Build a community
- NFTs can also help you build a community around your cause. Connecting your digital assets to some utility is a fantastic strategy.
- Nonprofits thrive, at their core, on their ability to build and sustain an engaged community over time. NFT fundraising is a valuable tool to use to attract new supporters and expand your organisation’s community or support network because it offers novelty, utility, and intrigue.
3. Use NFTs as Novelty Items
- NFT fundraising provides a one-of-a-kind opportunity to reach underserved audiences. They also offer a sense of utility that can be used by nonprofits and other organisations. Then, when participants raise a certain amount of money for your cause, you can reward them.
- Novelty prizes can be more valuable than cash or other forms of payment. Many customers would rather not buy another T-shirt or coffee mug from a money-hungry company. They want something more practical, even if the value is subjective.