Fidelity Charitable Launches NFT Lottery Amid Crypto Crisis

NEW YORK — Fidelity Charitable is getting into NFTs, the digital images that are registered on the blockchain, despite a deluge of bad news from the neighboring world of cryptocurrencies.

The nation’s largest donor is sponsoring a raffle that ends Tuesday where entrants can claim one of the NFTs, which stands for nonfungible token, and 50 will win $1,000 to donate through a donor-advised fund at Fidelity.

“The reason we’re doing this is we really believe there’s a whole new generation of givers and philanthropists out there,” said Amy Pirozzolo, head of donor engagement at Fidelity Charitable. “We want to be where they are and the channels they use and the formats they use, and we want to further encourage their generosity.”

According to a Pew Research Center poll last year, about 16% of Americans say they have invested in cryptocurrencies. The demographic most likely to invest was men between the ages of 18 and 29, with 43% reporting they had invested.

The blockchain is the technology that underpins the trading of cryptocurrencies, but it can also record ownership of digital assets such as images, videos or tweets. Fidelity said 50,000 different wallets, possibly representing as many individuals, have already registered to create an NFT and potentially win the money to donate.

Cryptocurrency contributions to donor-advised funds at Fidelity exploded last year, growing from the equivalent of $28 million in 2020 to $331 million in 2021, Fidelity said.

Jacob Pruitt, president of Fidelity Charitable, said of the NFT project, “I think it will be a unique way to connect with next-generation investors. It’s another way I think Fidelity is innovating and moving into a new space.

Donor-advised funds allow donors to claim a tax credit for charitable donations, but do not require them to give those funds away within a specific time frame. Organizations that host DAFs, such as Fidelity Charitable, also handle more complex donations, including redeeming the assets for cash and producing receipts for donors for tax purposes.

“A lot of the nonprofits can’t take over these assets or they have to hire outside consultants or people to do it,” Pirozzolo said.

One reason for the jump in cryptocurrency donations is that their value had increased significantly until recently. The cryptocurrency market experienced a boom in 2021 with the price of Bitcoin, the first cryptocurrency, rising to an all-time high of around $68,000 in November last year.

But the collapse of Terra — a stablecoin, or a type of cryptocurrency that seeks to peg its value to assets like the US dollar — in May brought down a string of major cryptocurrency companies. Then, earlier this month, one of the largest cryptocurrency exchanges, FTX and related entities, suddenly filed for bankruptcy, preventing both US and international users from accessing assets they held on the exchange.

James Lawrence, co-founder and CEO of Engiven, which powers cryptocurrency to nonprofits, including Christian ministries, noted that many people donating cryptocurrencies make large donations, often occurring in the last quarter of the year. That means it’s too early to say how the fluctuations in the cryptocurrency market might affect donations this year. He said he doesn’t see people who donate cryptocurrencies as different from other donors.

“They just have another trump to give and they’re going to give the most valued trump they can,” Lawrence said.

Of the more than 1.5 million nonprofits registered with the Internal Revenue Service in the US, Lawrence estimated that only four or five thousand could directly receive cryptocurrency donations.

“That’s a huge market that still hasn’t,” he said. He has also noted that many who give large donations in cryptocurrency (they facilitated a $10 million donation in cryptocurrency assets) are the same kind of people who give large donations in general, and not necessarily the younger demographics who are more likely to to invest in cryptocurrency. .

“Many of the largest donations we’ve processed come from an older demographic that has a tradition of making large donations across multiple asset classes,” he said.

Another organization, Endaoment, also facilitates cryptocurrency donations to nonprofits and hosts pooled funds to benefit certain types of nonprofits. Robbie Heeger, the organization’s president and CEO, said in addition to the fact that nonprofits may receive donations from cryptocurrency donors that they otherwise would not receive, cryptocurrency advocates are also eager to attract new users.

“This is a great opportunity for nonprofits to transition from paper checks” to cryptocurrency, Heeger said. “And the crypto space is very focused on adoption flywheels, on ways to boost the traditional economy or encourage it to migrate to the crypto economy.”

He encouraged newcomers to the cryptocurrency space to carefully research projects they might get involved in and look for projects that have received third-party audits from professional auditors.

Pirozzolo argued that the Fidelity Charitable promotion using NFTs is separate from the cryptocurrency ecosystem.

“This is really about the blockchain and having a fun way to celebrate the generosity of giving with digital art,” she said.

The company pays the cost of creating the NFTs, including a “gas” fee that pays for the item to be created and registered, and also said it compensated the artists who created the images.

People claiming the NFTs will need to sign up for a cryptocurrency wallet that has access to the Polygon blockchain. The Fidelity Charitable NFTs are hosted on the OpenSea platform.

Participants will see the NFT in their wallets when they sign up, but the art itself and the winners of the $1,000 tickets won’t be revealed until Giving Tuesday, November 29.


The Associated Press’ coverage of philanthropy and nonprofit organizations is supported by the AP’s partnership with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all AP philanthropic coverage, visit

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