{"id":1368,"date":"2022-05-05T16:02:43","date_gmt":"2022-05-05T20:02:43","guid":{"rendered":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/?p=1368"},"modified":"2022-05-05T17:04:49","modified_gmt":"2022-05-05T21:04:49","slug":"what-shift4s-acquisition-of-the-giving-block-tells-us-about-the-future-of-crypto-philanthropy","status":"publish","type":"post","link":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/?p=1368","title":{"rendered":"What Shift4’s Acquisition of the Giving Block Tells Us About the Future of Crypto Philanthropy"},"content":{"rendered":"\n

The Giving Block is one of the main companies making it possible for nonprofits to accepts Crypto donations directly, instead of indirectly through an avenue like a Donor Advised Fund. It is part of a growing number of companies that facilitate direct Crypto donations for a fee, like Engiven<\/a>. The Giving Block reports \u201cthe total donation volume on The Giving Block in 2021 was $69,644,535, an increase of 1,558% from 2020.<\/a>\u201d There is a section<\/a> of the website for non profit arts and culture organizations that accept Crypto through their services. The Giving Block specifically is reported to have processed more than $100 million dollars in Crypto donations in 2021<\/a>.<\/p>\n\n\n\n

According to Funraise\u2019s Global NGO Technology Report from 2019<\/a>, 2% of fundraising was in the form of Cryptocurrency. Some of this is through established funds, like Fidelity, that seem to file Crypto donations as \u201cVirtual Currency<\/a>\u201d. The largest single (direct) Crypto donation to a non profit that I could find is a $1.2 million donation to the Austin Community Foundation<\/a>. As mentioned, the Giving Block, before it was acquired by Shift4 in early 2022, experienced a rise in donations by 1,558%<\/a>. This is a large rise, but overall direct Crypto is still a small part of the total amount of fundraising.<\/p>\n\n\n\n

The Giving Block was recently acquired by a large tech company called Shift4, whose owner has ties to Elon Musk and SpaceX. With Shift4, the Giving Block\u2019s has a new philanthropic venture<\/a>. It was created after its acquisition by Shift4, and includes matching $20 million in Crypto donations. It claims to be the largest Crypto based philanthropic venture ever, and from what I can tell that is the truth. This is interesting, as it is a tech company and its billionaire founder acquiring a company<\/a> and using existing money to attempt to legitimize and normalize Crypto-based donations to non profits.<\/p>\n\n\n\n

\u201cALLENTOWN, Pa.–(BUSINESS WIRE<\/a>)– Shift4 (NYSE: FOUR), a leading provider of integrated payment and commerce technology, today announced the launch of the \u201c<\/em>Caring with Crypto<\/em><\/a>\u201d campaign to raise over $20 million for nonprofit organizations on <\/em>The Giving Block<\/em><\/a>, a cryptocurrency fundraising platform that Shift4 <\/em>recently acquired<\/em><\/a>. Shift4 CEO Jared Isaacman will personally match the first $10 million in crypto donations through the initiative, with the company aiming to create the largest cryptocurrency fundraising campaign in history.\u201d<\/em><\/p>\n\n\n\n

Below is an image from the letter sent to shareholders about the acquisition:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Shift4 also acquired Finaro<\/a>. This is important for context as it shows the Crypto company\u2019s value as it relates to other assets, and how Crypto donations are one part of the larger effort to expand Shift4. Shift4\u2019s stock price<\/a> has been dipping in the past year. It appears that the acquisition of the Giving Block corresponded to a small bump when it was announced but it has since dipped.<\/p>\n\n\n\n

Why was the Giving Block acquired by Shift4 and why has Shift4 promised $20 million dollars? What does this tell us about the future of Crypto and nonprofits? I dug into Shift4\u2019s messages to shareholders and filings with the SEC. In the below shareholder letter explaining the rational and foreseen benefits of the acquisition, we see that the Giving Block was part of a suite of acquisitions designed to prepare Shift4, an existing, powerful tech company, for the mainstreaming of Crypto and international financial transactions. It will be interesting to see if any of the promised benefits play out, or if the Giving Block was an effort to acquire some flashy crypto business, with the added benefit of good PR from philanthropy. It also seems that the focus on philanthropy, and the $20 million promise, is a way for Shift4 to use philanthropy as a way to mainstream Crypto outside of philanthropy and to have a major market position in that realm. I think that it is important for arts organizations to keep in mind the motivations behind Crypto donations, and the role that donations to nonprofit arts orgs will play in turning Crypto into something that is a mainstream source of power and influence for technology companies that are already established.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n

The recent SEC filing<\/a> from Shift4 demonstrates that the company sees big money in the Crypto space, though the \u201ccross-sell potential\u201d part of this is vague. This resources is a good demonstration of the increasing role of established businesses in Crypto, and well known actors being the ones to gate keep Crypto donations in non profit spaces.<\/p>\n\n\n\n

On February 28, 2022, the Company acquired The Giving Block, Inc. (\u201cThe Giving Block\u201d) for approximately $13.5 million in cash, $40.5 million in shares of the Company\u2019s Class A common stock and a performance-based earnout of up to $61.5 million in cash and $184.5 million in shares of the Company\u2019s Class A common stock. The Giving Block is a cryptocurrency donation marketplace that the Company expects to accelerate its growth in the non-profit sector with significant cross-sell potential.<\/em><\/p>\n\n\n\n

Ultimately, the story of the Giving Block and its acquisition is a demonstration of the efforts by existing power players to maintain their position in the Crypto space, and how non-profit donations are a way to achieve this purpose.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Bibliography<\/p>\n\n\n\n

2019 Global NGO Technology Report | Funraise. (n.d.). Retrieved April 23, 2022, from
https:\/\/www.funraise.org\/techreport

Accept Crypto Donations\u2014Donate Crypto to Nonprofits. (n.d.). The Giving Block. Retrieved
April 23, 2022, from https:\/\/thegivingblock.com\/<\/p>\n\n\n\n

Caring With Crypto | Donation Matching Campaign. (n.d.). The Giving Block. Retrieved April
23, 2022, from https:\/\/thegivingblock.com\/caringwithcrypto\/<\/p>\n\n\n\n

Crypto donations rise by 1,558% on The Giving Block in 2021. (2022, February 4).
https:\/\/forkast.news\/headlines\/crypto-donations-rise-giving-block\/
<\/p>\n\n\n\n

Crypto Processor The Giving Block Sold For Cash, Stock. (n.d.). The NonProfit Times.
Retrieved April 23, 2022, from https:\/\/www.thenonprofittimes.com\/fundraising\/cryptoprocessor-the-giving-block-sold-for-cash-stock\/<\/p>\n\n\n\n

Cryptocurrency Fundraising: Key Findings from the Global NGO Technology Report 2019.
(n.d.). The Giving Block. Retrieved April 23, 2022, from
https:\/\/thegivingblock.com\/resources\/cryptocurrency-fundraising-key-findings-from-the-globalngo-technology-report-2019\/
<\/p>\n\n\n\n

CryptoJennie. (2019, July 17). We\u2019re Alex Wilson and Patrick Duffy, Co-founders of The Giving
Block. Ask us anything! [Reddit Post]. R\/BATProject.
www.reddit.com\/r\/BATProject\/comments\/ceerux\/were_alex_wilson_and_patrick_duffy_cofoun
ders_of\/

Decentralized Patronage: Incentivizing Ethical and Effective Philanthropy of Crypto-Assets.
(n.d.). AMT Lab @ CMU. Retrieved April 23, 2022, from
https:\/\/amt-lab.org\/blog\/2020\/6\/decentralized-patronage-incentivizing-ethical-and-effectivephilanthropy-of-crypto-assets
<\/p>\n\n\n\n

Donate Bitcoin to The Museum of Contemporary Art (MOCA). (n.d.). The Giving Block.
Retrieved April 23, 2022, from https:\/\/thegivingblock.com\/donate\/the-museum-ofcontemporary-art-moca\/

Ex991. (n.d.). Retrieved April 23, 2022, from
https:\/\/www.sec.gov\/Archives\/edgar\/data\/0001794669\/000179466922000007\/ex991.htm<\/p>\n\n\n\n


Fidelity Investments Charitable Gift Fund\u2014GuideStar Profile. (n.d.). Retrieved April 23, 2022,
from https:\/\/www.guidestar.org\/profile\/11-0303001<\/p>\n\n\n\n

For-20211231. (n.d.-a). Retrieved April 23, 2022, from
https:\/\/www.sec.gov\/Archives\/edgar\/data\/0001794669\/000179466922000012\/four20211231.htm


Four-20211231. (n.d.-b). Retrieved April 23, 2022, from
https:\/\/www.sec.gov\/Archives\/edgar\/data\/0001794669\/000179466922000012\/four20211231.htm
<\/p>\n\n\n\n

How Crypto Is Changing Philanthropy | Nasdaq. (n.d.). Retrieved April 23, 2022, from
https:\/\/www.nasdaq.com\/articles\/how-crypto-is-changing-philanthropy
<\/p>\n\n\n\n

Shift4 and The Giving Block Announce $20 Million Cryptocurrency Philanthropy Campaign.
(n.d.). Retrieved April 23, 2022, from
https:\/\/investors.shift4.com\/news\/news-details\/2022\/Shift4-and-The-Giving-Block-Announce20-Million-Cryptocurrency-Philanthropy-Campaign\/default.aspx\\

Shift4 Announces Two Acquisitions to Expand International Payments And Cryptocurrency
Capabilities. (n.d.-a). Shift4. Retrieved April 23, 2022, from https:\/\/assets.shift4.com\/shift4-
acquires-finaro-and-the-giving-block\/

Shift4 Announces Two Acquisitions to Expand International Payments And Cryptocurrency
Capabilities. (n.d.-b). Shift4. Retrieved April 23, 2022, from https:\/\/assets.shift4.com\/shift4-
acquires-finaro-and-the-giving-block\/<\/p>\n\n\n\n


Shift4 Announces Two Acquisitions to Expand International Payments And Cryptocurrency
Capabilities. (n.d.-c). Shift4. Retrieved April 23, 2022, from https:\/\/assets.shift4.com\/shift4-
acquires-finaro-and-the-giving-block\/
<\/p>\n\n\n\n

Shift4 Announces Two Acquisitions to Expand International Payments And Cryptocurrency
Capabilities. (n.d.-d). Shift4. Retrieved April 23, 2022, from https:\/\/assets.shift4.com\/shift4-
acquires-finaro-and-the-giving-block\/
<\/p>\n\n\n\n

Shift4 Payments, Inc. (FOUR) Stock Price, News, Quote & History\u2014Yahoo Finance. (n.d.).
Retrieved April 23, 2022, from https:\/\/finance.yahoo.com\/quote\/FOUR?p=FOUR<\/p>\n\n\n\n


The Giving Block Joins Shift4 To Become the Leaders in Nonprofit Innovation, Drive
Mainstream Crypto Adoption. (2022, March 1). The Giving Block.
https:\/\/thegivingblock.com\/updates\/news\/the-giving-block-joins-shift4-to-become-the-leadersin-nonprofit-innovation-drive-mainstream-crypto-adoption\/<\/p>\n\n\n\n


\u201cThe Giving Block\u2019s 2021 Annual Report – Crypto Philanthropy Stats.\u201d The Giving Block<\/em>, https:\/\/thegivingblock.com\/annual-report\/ar21\/. Accessed 5 May 2022.
The Giving Block on Pace To Process More Than $100M in Cryptocurrency Donations in 2021.
(n.d.). NonProfit PRO. Retrieved April 23, 2022, from
https:\/\/www.nonprofitpro.com\/article\/the-giving-block-on-pace-to-process-more-than-100m-incryptocurrency-donations-in-2021\/<\/p>\n\n\n\n

Villalpando, N. (n.d.). Austin Community Foundation gets $1.2 million gift in cryptocurrency.
Austin American-Statesman. Retrieved April 23, 2022, from
https:\/\/www.statesman.com\/story\/news\/local\/2021\/12\/08\/austin-community-foundation-accepts1-2-million-gift-cryptocurrency\/8854884002\/<\/p>\n","protected":false},"excerpt":{"rendered":"

The Giving Block is one of the main companies making it possible for nonprofits to accepts Crypto donations directly, instead of indirectly through an avenue like a Donor Advised Fund. It is part of a growing number of companies that facilitate direct Crypto donations for a fee, like Engiven. The Giving Block reports \u201cthe total […]<\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[7],"_links":{"self":[{"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=\/wp\/v2\/posts\/1368"}],"collection":[{"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1368"}],"version-history":[{"count":4,"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=\/wp\/v2\/posts\/1368\/revisions"}],"predecessor-version":[{"id":1450,"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=\/wp\/v2\/posts\/1368\/revisions\/1450"}],"wp:attachment":[{"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1368"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1368"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/courses.ideate.cmu.edu\/62-830\/s2022\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1368"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}