By Daniel Shin
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The majority of donations went to religion, education, health care and so forth. Gifts for arts, culture, humanities, and environment also saw double digit growth. Prior to COVID-19, approximately 78 million citizens of the United States volunteered and contributed 5.8 billion hours for public benefit. Religion, sport, culture, and art are key areas where people were actively engaged in volunteering on top of their donations.
Some might have done philanthropic giving to receive a charitable tax deduction. Though, donors tend to provide their money, capabilities and professional acumen to support charitable causes in ways that also sharpen up their own competitive edge. Philanthropy is an act of goodwill. It helps to improve the well-being of humankind and prevent social problems.
Philanthropy is a driving force of social change. It can be in the form of social movements for civil rights, labor, women's empowerment, environmental and LGBTQ+ issues. Philanthropy is not only providing necessary funding, but also advocacy support for social change. Oftentimes, donors do not want to let their left hand know what their right hand is doing. In order to reach a critical mass, it has to be done proactively and also transparently.
We have to learn to give. We can give our time, expertise, love, and compassion. We should also educate young generations to be equipped with knowledge, experience, and skills to be more compassionate and engaged in various social causes. We don't have to be rich to give. None of us can ever run out of something worthwhile to give.
Giving also means following the frontlines. Next generation leaders can catalyze entrepreneurship and innovations for philanthropy from early on in their life to strengthen citizenship, organizations and communities.
Philanthropy has long contributed to education. Leading research universities around the globe have produced leaders for all sectors and fields. Universities suit their students with a broad range of skills and the inspiration to shape the world for the better. Students will go on to tackle the most serious crises of humankind such as climate change with what they have learned.
The next generation leaders will be more representative by and large thanks to the diversity of philanthropic efforts. Universities can be a magnet for talent. Philanthropy in the form of endowment has made every part of the advanced learning experience more affordable for students from all backgrounds. Generosity building upon the tradition of philanthropy can help shepherd students into a brighter future.
Philanthropic giving should be strategic so that it can prepare every mission-driven student to pursue their last job, not just first. It would help students with intellectual frameworks, competencies and digital literacies that are necessary to confront the challenges of tomorrow, not just today. It would help connect the dots especially for students to have meetings with mentors and advisors on potential career paths and help them to build necessary career portfolios that they are destined for. Philanthropy has to aim to connect people with disadvantaged backgrounds to bring their personal aspirations to fruition, bearing public benefits.
Philanthropy certainly helps embrace obligations for those who have been privileged with their achievement and reputation. It will help them to leave the world just a little bit better off than they have found it. Science, for example, is not just for the elite or done by the highly educated. Philanthropy will open science to devise solutions innovatively engaging all backgrounds and disciplines from artists to engineers or entrepreneurs.
The impact of the work of philanthropy is certainly beyond business. It should focus on affecting change by training the most skilled and compassionate leaders for all kinds of organizations to carry on their efforts. Everyone has to have a sense of belonging where their values are fully supported and encouraged and feel deeply that they are contributing to meaningful solutions for the betterment of society.
Digital assets are poised to disrupt philanthropic donations. Crypto donation is like a lab for philanthropy. Some progressive blockchain leaders now make it possible to donate crypto currency to support science, technology, engineering and mathematics (STEM) education. Donors tend to be young high-net-worth individuals.
Making donations with crypto is also inspiring young generations to give by matching and facilitating directly between donors and recipients. It provides a cause-based impact investing opportunity for crypto holders in unprecedented ways. Blockchain projects offer donors the opportunity to easily participate in and monitor the activity of projects they support.
Crypto donations are a growing trend. Tax authorities like the U.S. Internal Revenue Service (IRS) classify cryptocurrency donations as property, meaning they are not subject to capital gains tax and are tax-deductible. Hence, donations are tax-deductible to the fullest extent permitted by law.
Some progressive churches in Silicon Valley accept crypto, for example, which is no different than accepting a stock, property or contribution-in-kind. Nonprofit leaders in education should also consider acceptance of such digital assets. They should also determine whether to sell the donated crypto promptly. Like many other donated assets, school administrators should decide if they would keep it as an investment or not.
Being a philanthropist is like betting on how to move the needle on a social issue. Similarly, crypto holders can appreciate the long-term value of their bold investment positions. They can choose to bring that approach to their supported causes, as if they are investing in ideas and projects that may take years to manifest ― like making grants to education that take a generation to realize.
Bringing the mindset of crypto investing to philanthropy ― especially in education ― presents uncharted opportunities to elevate new causes and potential solutions. It will help bring in a fresh view on long-standing social challenges. Donations are not simply a windfall to people poorer than donors. Instead, it is an effective and thoughtful way to continue building the world and expanding the horizon of what crypto can do for the world.
Daniel Shin is a venture capitalist and senior luxury fashion executive, overseeing corporate development at MCM, a German luxury brand. He also teaches at Korea University.