Chris Larsen, co-founder of Ripple, a company specializing in cryptocurrency, is the world’s richest man in cryptocurrency, according to Forbes, which estimates his net worth at $7.5 billion.
Late last night, the crowdfunding website DonorsChoose.org featured more than 35,000 requests from teachers seeking cash — for field trips, computers, musical instruments, and even an incubator for chicks. But when the clock ticked past midnight, those requests vanished. All the teachers’ needs had been answered by a single donor — a company specializing in cryptocurrency.
The unusual benefactor is Ripple, a San Francisco business that develops global payment networks through which banks, businesses, and institutions make cryptocurrency transactions. The company and its executives agreed to cover the cost of every project on the nonprofit’s website following an email pitch from DonorsChoose founder Charles Best and just a few weeks’ discussion.
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Chris Larsen, co-founder of Ripple, a company specializing in cryptocurrency, is the world’s richest man in cryptocurrency, according to Forbes, which estimates his net worth at $7.5 billion.
Late last night, the crowdfunding website DonorsChoose.org featured more than 35,000 requests from teachers seeking cash — for field trips, computers, musical instruments, and even an incubator for chicks. But when the clock ticked past midnight, those requests vanished. All the teachers’ needs had been answered by a single donor — a company specializing in cryptocurrency.
The unusual benefactor is Ripple, a San Francisco business that develops global payment networks through which banks, businesses, and institutions make cryptocurrency transactions. The company and its executives agreed to cover the cost of every project on the nonprofit’s website following an email pitch from DonorsChoose founder Charles Best and just a few weeks’ discussion.
Ripple’s donation — $29 million in XRP, the cryptocurrency it developed — is the largest gift in the 18-year history of DonorsChoose. One in six public schools across the country will benefit, according to the nonprofit.
Ripple’s gift of $29 million is in XRP, the cryptocurrency it developed.
The gift is also believed to be the largest ever made in cryptocurrency to a single charity and reported publicly. Forbes recently touted Chris Larsen, Ripple’s co-founder and chair of the company, as the world’s richest man in cryptocurrency, estimating his net worth at more than $7.5 billion.
‘Insane’ Pitch
Best says he set the gift in motion in January with an email to Brad Garlinghouse, Ripple’s CEO. Best, who started DonorsChoose when he was a teacher in the Bronx, says Garlinghouse learned about the nonprofit through a relative and has supported it even when it was run out of Best’s classroom.
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Best, who had read a news story about the success of Ripple, suggested to Garlinghouse that the company make a grand statement by covering all the projects on the site.
Says Best: “I wrote, ‘I appreciate that this is an insane ask, and it may not even be financially feasible for you to consider it. But 1 million students and teachers want me to go for it.’ "
He sent the email thinking he’d be lucky to get any response at all. Yet within a week or so, he was flying to San Francisco to talk with Garlinghouse and Larsen. They struck a deal in less than a month, he says.
The Ripple gift illustrates a new wrinkle in DonorsChoose’s fundraising. Once reliant on small donations secured through crowdfunding, it now regularly lands large gifts from individuals and companies. In 2015, DonorsChoose Board member and comedian Stephen Colbert famously pledged to put up $800,000 to pay for all the projects posted by teachers in his home state of South Carolina — about 1,000 altogether. DonorsChoose later capitalized on this idea with its #BestSchoolDay campaign, which has raised $14 million from 58 actors, athletes, philanthropists, and other notables to cover the costs of teachers’ requests from a state, region, or city.
DonorsChoose previously had never received a gift of more than $9 million. Most of its big requests are for $1 million or $2 million, according to officials.
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‘More to Come’
The six-year-old Ripple is a newcomer to big philanthropy. It has no formal “social-good or philanthropic program just yet,” says Monica Long, senior vice president for marketing.
“This is the company’s most significant philanthropic effort to date,” Ms. Long says. “But I expect that beyond our DonorsChoose collaboration, there’d be more to come on that front.”
Ripple is the second major donor in recent months to publicly make big contributions in cryptocurrency. In February, an individual philanthropist who made a fortune in Bitcoin completed a two-month giving blitz that showered some $56 million on nearly 60 nonprofits, including many small charities.
Donor-advised funds also are reporting an increase in contributions of cryptocurrency. Fidelity Charitable says it received $69 million in such gifts in 2017, a tenfold increase from the previous year.
The National Philanthropic Trust, a nonprofit donor-advised-fund sponsor, received 10 gifts of cryptocurrency in 2017 worth more than $10 million — much more than it had ever received previously, according to President Eileen Heisman. The largest gift was valued at $8.5 million.
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A huge run-up in the value of cryptocurrency partly explained the 2017 surge; the value of Bitcoin, for instance, increased from $1,000 to $19,000 over the course of 2017, the Fidelity report noted. But crypto values crashed in January, and though they have increased since, many economists say to expect more volatility.
Some cryptocurrency enthusiasts believe Bitcoin, XRP, and similar products will become commonplace in the next decade. But financial watchdogs warn that it’s being used to launder money acquired through criminal activities.
Heisman says her organization follows strict “know your client” procedures, using its legal team and outside firms to vet crypto donors and make sure they are not passing along ill-gotten gains.
“We’re very careful,” she says. “We’re not treating this as a casual transaction.”
Heisman says it’s not clear whether the surge in crypto donations presages a future in which nonprofits will regularly handle transfers of such illiquid assets. Gifts of hedge-fund and private-equity investments were once rare and baffling, too, she notes, but they’re now common and well understood.
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“Since this is all new, it’s really hard to predict what’s going to happen,” she says. “I don’t have a crystal ball.”
Correction: An earlier version of this article said the National Philanthropic Trust’s largest 2017 gift in cryptocurrency was $1.8 million instead of $8.5 million.