NFTs are becoming more mainstream by the day, but what does this mean for small business? Everything. Today we’ll focus on giving to charity.
Does your small business support local charity? Most small businesses do. Did you know there’s a new way to offer long lasting support for charity? Yes, once again, I’m taking about NFTs (always).
To recap, an NFT (or non-fungible token) is something that allows a person to buy and sell items using smart contracts, which are then stored (or kept) on the blockchain. If you’ve not read the previous articles in this series, don’t leave now, but please do as they were written to help you.
So say you’ve identified an athlete or artist you’d like to work with to create an NFT and give to your customers and clients as value for their services. Great!
Now you have to determine ‘who gets what’ when it comes to the royalties of the items sold – and this is where charities come into play.
NFTs and Charity Giving
One thing a smart contract allows for is a royalty for each and every subsequent sale of an item to another person. Sales of these NFTs could go on for weeks, months, years, or decades – depending on what the NFT is and what value it offers.
NFTs could even ‘outlast’ your business – but we don’t want that, and that’s why we advocate for small business to get involved in the NFT space early. Early as in NOW.
But let’s say you don’t release an NFT and you do go out of business. It’s likely your contribution to the charity would end – and they would have to make up the funding loss by looking for other businesses or individuals to take your place.
Now let’s say you do release an NFT meant to benefit the charity. Even if you went out of business the charity would still benefit. Remember, NFTs ‘live’ forever on the blockchain. So as long as the NFT is still being bought and sold, the charity reaps benefits.
NFTs and Your Royalty
Pretty much the standard across the board royalty rate is 10% (it can be less if you choose).
If you gave your customers an NFT, and they chose to sell it, and it is sold for $100, you would receive the equivalent of $10 (depending on site fees). This $10 could be broken up into sections. One for yourself, one for the artist or athlete, and one for the charity.
Again, this last forever.
Now imagine you have 5,000 customers and clients, and each of them receives your NFT for being a loyal customer. Maybe 4,000 keep their NFT because it has long term value for them, and the other 1,000 customers decide to sell it.
If the “Floor Price” (lowest amount for a listed item) is $100, and 500 people sell theirs, you’ll receive a royalty of $5,000.
Then the 500 that didn’t sell are joined by another 3,000 trying to sell, and they sell, and they sell, and then others sell – you get the picture.
Every sale brings a royalty on the sell – forever (I keep stressing forever because it’s important to remember, NFTs last forever).
You can begin to see how the money with NFTs could start adding up over time.
How Could This Benefit Your Business?
The press love a good, “Local Business Donates X Amount” stories – and they’ll love it even more if the donation is tied to an NFT.
This helps everyone. Your small business, the charity, the partners you have in place, and the artist or athlete (if that’s the route you choose to take, though you certainly don’t have to – you can simply work with the charity to create something special).
As a small business you have to think about using every available resource to spread the word about your business. NFTs and charities provide a great way to get local newspaper articles written, shout-outs on the TV news, and be interviewed on the radio.
Raising your business profile, and that of the charity your NFT project supports, is never a bad thing.
Don’t Let The NFT Take The Place Of Giving
One thing about this: Don’t let the “NFT donation” take the place of your usual giving schedule. NFTs should be used “on top of” what you are already planning to give and not used as a replacement.
This is because although it’s possible for your customers to sell an NFT and for you receive a royalty that could help the charity, it’s also possible the NFT never gets sold – in which case, once again, the charity would be out of badly needed revenue.
It’s best to go into any NFT project thinking solely about the marketing benefits it affords your company and those it is associated with – and the good it could do for the charity.
Other Ideas With Charities
The idea mentioned above isn’t the only way to release an NFT. NFTs are versatile, and there are hundreds of thousands of use cases for each one.
If the charity has a ball or auction each year with attendees, you could create a special ‘owner’ NFT in which the holder of the NFT sits in your private box, or gets a special prize for attending. You could sell (rather than give away your charity NFT) because well, it benefits charity.
And you don’t have to stop with only one NFT. You could release an NFT a year for the charity. Think Christmas Tree bulbs – where a local artist creates bulb art that can be released as an NFT and redeemed for the physical bulb. Every year. New NFT, New Bulb, New Money for the charity.
This article is simply meant to get your mind started on the value of NFTs and what they can do for your small business. And how, in turn, your small business can further help local charities near and dear to you. Remember, all marketing plans take time to formulate and enact, and this is especially true with NFTs. That’s why it’s imperative to get started now in the NFT space.
As always, the NFT Creative Group is here to help. Contact us at NFTCreativeGroup@gmail.com – The first consultation is always free and we look forward to hearing from you.