The Potential of Non-Fungible Tokens for Fundraising: The Curious Case of a Successful Failure

Abstract

Abstract Non-fungible tokens (NFTs) are unique digital assets stored on a blockchain that can be used to transfer value without relying on traditional payment intermediaries. In this paper, we present a case study of an action research project in which we apply NFTs to raise funds for a children’s hospital. A total of 11 children’s drawings were digitized, and 10 copies of each were offered on the online marketplace OpenSea. From a technical perspective, the solution works reliably as a vehicle for donations, but user adoption was low. Here, we discuss the lessons learned and list 12 advantages and 8 disadvantages/barriers to using NFTs for fundraising based on feedback from 24 digital natives, supplemented by input from non-expert individuals. From a technological perspective, blockchain technology offers promising affordances for nonprofit organizations. However, important problems must be solved to gain widespread adoption, most notably usability and legal clarification.