In brief
- Endaoment raised $2.5 million in a seed funding round.
- It lives on the Ethereum blockchain and is also fully registered in the US as a nonprofit that can distribute charitable donations.
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Endaoment, an entirely on-chain non-profit organization, today completed a seed funding round raising $2.5 million led by Framework Ventures, a major decentralized finance (DeFi) venture capital firm.
“We see these big splashy NFT sales and always hear the same thing: a portion of proceeds will go to charity!” Robbie Heeger, CEO of Endaoment, told Decrypt. “[We] are taking that blanket statement and delivering on it.”
Endaoment is built on Ethereum, so donations never have to leave the blockchain unless the recipient organization wants to cash it out. As it’s registered in California as a 501(c)(3) non-profit, all donations to Endaoment are tax-deductible under U.S. federal law.
Its on-chain smart contracts were vetted by OpenZeppelin, a security audit firm for Ethereum smart contracts.
Endaoment, incubated by Framework Venture’s sister company Framework Labs in 2020, also received additional funding from Distributed Global, Station 13, DeFi Alliance, Chapter One, Tony Sheng, Jayson Hobby, 0age, and Ben Rubin.
It declined to disclose how much of the funding came from each organization or individual.
Despite the name, Endaoment is not yet a decentralized autonomous organization (DAO). But the million-dollar seed funding will allow it to take that step soon, Heeger told Decrypt.
Unfortunately, California, where Endaoment is headquartered, doesn’t legally recognize DAOs—unlike Wyoming.
In a statement shared with Decrypt, Endaoment board member and Framework Ventures co-founder Vance Spencer said, “Endaoment is showing the industry how it can get a portion of its profits into the hands of groups that need it most while remaining true to the values of DeFi.”
Last week, Endaoment launched its first community fund to support the Stand With Asians grassroots movement.
Pplpleasr, a digital artist who in March sold an animated Uniswap ad as an NFT for 310 ETH ($525,000 at the time), was the movement’s first donor with 263.5 ETH ($715,000 in today’s price).
The community fund has recommended that Endaoment distribute $25,000 grants to over two dozen organizations working to end discrimination against the Asian American and Pacific Islander communities.
On-chain charitable-giving with Endaoment
Here’s how on-chain charitable giving works.
The first step is to get Endaoment to set up an on-chain Donor-Advised Fund (DAF) for you—it’s sort of like a charitable financial account. DAF registration is a swift automated process involving basic information about the donor.
Once that’s set up, you can now send crypto—most major cryptocurrencies are accepted—to Endaoment. The non-profit will convert your crypto into USDC, a USD-pegged stablecoin, via Uniswap and deposit the proceeds to your Donor-Advised-Fund’s (DAF) contract address on-chain.
“Proceeds” mean your donated crypto amount minus those hefty Ethereum gas fees for transacting on the network.
And once your DAF’s funded, you can recommend grants to more than 1.5 million nonprofit organizations throughout the United States.
Endaoment will contact the receiving organization, get them onto Ethereum, and transfer them the recommended grant amount. The organization told Decrypt that an Ethereum wallet isn't essential. "Endaoment is able to handle the cash out process on behalf of the organization and send the funds in US dollars directly to their bank account through Circle," a spokesperson said via email.
Editor's note (06.07.2021 3:00 am EST): This article has been updated to reflect that Endaoment can also handle cash, not exclusively crypto.