How to Find and Support Indigenous Artists with CharitiesDAO: Feasibility Research & Analysis for Decentralized autonomous non-profit organizations (DANOs) (Part 2)

In addition to the findings and recommendations mentioned in the previous feasibility research report, it is important to note the following points regarding the use of Decentralized Autonomous Organizations (DAOs) in philanthropy, as reported in the provided source:

• DAOs such as the Big Green DAO, launched in late 2021, promise to “disrupt philanthropic hierarchies” by reducing overhead spending and shaving other expenses.
• There are legal considerations that donors and charities should keep in mind as these arrangements emerge, such as the fact that DAOs have little formal infrastructure.
• Most cryptocurrency donations to charities simply provide capital to eligible organizations that operate like any other standard nonprofit. However, when donors contribute to DAOs, they exchange cash or appreciated property for governance tokens, which represents a fractional form of collective ownership, this could be problematic as authorities may consider it a violation of the precondition that the donor gets nothing of value in return.
• The volatility of the cryptocurrency market represents a risk for donations to DAOs. Charities either need to convert these donations into U.S. dollars right away or gamble regarding their future value.
• Despite the obstacles, DAOs have the potential for a high degree of transparency paired with low overhead.

One good example of a DANO in philanthropy is the Big Green DAO, which is tied to a decade-old food justice charity that had revenue in excess of $9 million in 2019. It’s founded by Kimbal Musk, a member of Tesla’s board and it promises to “disrupt philanthropic hierarchies” by reducing overhead spending and shaving other expenses. However, as reported in the provided source, DAOs currently have little if any formal infrastructure and depending on the jurisdiction, some states only require one individual to be designated as the agent of record. Additionally, there are legal and tax implications of contributing to DANOs that should be considered.

Another example, when donors make charitable contributions, they relinquish the money or asset they just gave to the charity, in return for having a donation be eligible for favorable tax treatment by the authorities, typically, that cryptocurrency donations actually provide donors with a larger tax benefit versus cash donations. But if donors exchange their donations for virtual tokens, this may violate this precondition as the authorities may see it as a barter, rather than a donation.

Furthermore, the volatility of crypto assets is another factor to consider, as the total market value of crypto assets can be unstable, and charities have to either convert these donations into U.S. dollars right away, as they do with donated stocks, or gamble regarding their future value.

Transforming Art and Charity: CharitiesDAO’s Distinctive Features

Traditional grass-root artists, such as Canadian Indigenous artists, are often marginalized and undervalued in the mainstream art world. Their artworks are often unappreciated and undervalued, and charitable donations can often be difficult to track, making it hard for donors to see the impact of their giving. CharitiesDAO aims to address these issues by creating a more transparent and efficient donation chain by leveraging the power of blockchain technology.