Cowgirls and Funding Abortion Rights

Last December, I wrote a series of posts about charitable DAOs. (Brief recap: DAOs–decentralized autonomous organizations–are basically crypto-based business organizations that try to replace human governance with smart contract governance.) When I wrote them, I was thinking mostly hypothetically (though I’ve been informed that there are people actively pursuing charitable DAOs.) Yesterday, I saw a (now 2-month-old) story in the Washington Post about CowgirlDAO, a DAO formed to raise money to fund abortion rights groups.

The format isn’t precisely a charitable DAO, at least as best as I can tell. Rather, the DAO sells  “Computer Cowgirls,’ a set of NFT art to negate its power. The kitschily dressed cowgirls moved with an empowerment swagger, subverting farmhand and cheerleader cliches.” It then donates that money (or, rather, the ethereum used to purchase the NFTs) to abortion rights groups.

Is this a solution in search of a problem? Maybe; the article points out that substantively it’s not a lot different from selling t-shirts and donating the proceeds. But, as the founder points out, she raised a lot more money selling NFTs than she would selling t-shirts, and that money came in significantly faster.

But it also raises significant problems. CowgirlDAO is not tax-exempt, so someone owes taxes on its income from selling NFTs. To the extent it donates its assets to tax-exempt organizations, somebody may get some amount of deduction for its donations.

And critically, many–perhaps most–charities aren’t set up to receive donations of cryptocurrency. Some may have no desire, especially given the volatility, expense, and environmental impacts of cryptocurrency.

So are NFTs sold by DAOs the future of philanthropy? I doubt it. But it’ll be interesting to see whether this ushers in a new revenue stream for nonprofits or a new type of philanthropist.

Samuel D. Brunson

Photo by Marco Verch Professional Photographer. CC BY 2.0