This is a new generation of donors.
Transcript:
This podcast was transcribed through a third-party application. Please disregard any misrepresentations.
Brad Caruso (00:00):
Welcome to civic warriors brought to you by Withum. On this podcast, we bring the conversation to you. Sharing, engaging stories that motivate and build consensus in the nonprofit community. This podcast is about the innovators, the leaders on the front line of adversity, guiding lights in the nonprofit industry affecting change and through their stories. We can all join forces to become civic warriors. Hey warriors. Welcome to today’s episode of civic warriors brought to you by Withum. I’m Brad Caruso team leader of Withum’s not-for-profit and education services group. Today, we are talking with Joe Agoada, the founder and chief executive officer of Sostento a. 501c3 not-for-profit organization, whose mission is to help frontline public health workers save lives. Joe has an innovative strategy and is on the forefront of accessing new funding from NFTs or non fungible tokens for Sostento. We’re gonna talk about NFTs the technology and help everyone listening. Think about how they might be of value to your not-for-profit organization. From my perspective, in working with Joe Sostento has an innovative strategy mission and is doing a lot of good for the world. And we’re really excited to have Joe here today. So Joe, welcome to the show.
Joe Agoada (01:04):
Thank you so much, Brad. Excited for this conversation.
Brad Caruso (01:07):
So Joe, why don’t we start off and tell us a little bit about Sostento, what you’re all about and what do you do?
Joe Agoada (01:12):
Yeah, so Sostento is an Italian word that means to uplift, nourish, and sustain. And that is really what we try to do every day for our frontline public health workers. And as you’ve mentioned, our mission is to help them save lives. And so the Sostento story actually begins in 2018. I had just been through about 15 years of work in international public health emergency response. So I had worked on HIV aids in east Africa. I was part of the Ebola response in West Africa. I had worked in the Macko basin on avian flu and dengue and Zika in Latin American Brazil. I had done all this work and I had really just worked internationally, but the group I was working with in 2018, got a call from the CDC and they said, Hey, you’ve done all this stuff around the world. Could you help us here in the United States on the opioid overdose crisis?
Joe Agoada (02:03):
And my team was sort of like, oh no, we don’t do that. We work around the world. Like we don’t work here in the United States, but I was really inspired to learn more. And so I just started talking to frontline health workers here in my own backyard and started to realize that a health worker in Uganda and Cambodia and Brazil and here in the United States really were facing the same challenges. And so I was inspired to leave the organization and startup Sostento. So we actually registered in 2019 to begin this work. And my legal team said, okay, well, we’re submitting this. I think we submitted around October 2019 for our 501c3 and they said, oh, it’ll take a year to get. And lone behold, February of 2020, our 501c3 comes in the beginning of a pandemic with a mission to help frontline health workers save lives. And so we’ve just really grown rapidly during this pandemic. We’ve done life or death support to the frontline and it was beyond anything I prepared for, but our mission is evolving. The need keeps us passionate and working hard to do what we can for these amazing folks that are on our frontline.
Brad Caruso (03:10):
Yeah, no doubt. And to think about that for our listeners out there, you know, starting a nonprofit is not easy. Raising funding for a nonprofit is not easy. Raising funding for a, not-for-profit at the start of a pandemic is really not easy. And so certainly you’ve had some challenges to overcome. What has that ride been like for you, I guess fast forward into today for Sostento just as a whole. And then I think we’ll get into the real interesting side of this, which is some of the innovative strategy you’ve had on the NFTs.
Joe Agoada (03:34):
It has been definitely an exhausting, uh, ride. So when we started again, my vision was a small nonprofit. We would grow over time, focus on the opioid overdose crisis. We had programs actually in West Virginia and Arizona, and we were just getting going. And my idea of taking it slow really was blown up by the pandemic. And so we were forced to listen to the needs of the frontline health workers and grow rapidly. We were about a $500,000 nonprofit in our first year, in our second year in 2021, we were, um, about a 1.7 million nonprofit. And then this year we have received federal funding and we will be at least a 7.2 million nonprofit. That’s how much funding we’ve gotten for COVID response this year. So that kind of hyper growth is not something I ever prepared myself for. You know, I’ve always worked within institutions within United nations, working with the CDC.
Joe Agoada (04:30):
And in those cases you really have an infrastructure. You have a brand, you have a lot of things already set up, uh, but we’ve really had to build the airplane as we’ve been flying it. As you know, people say I’ve been buoyed by the frontline health workers. They’ve not given up. And so we continue to grow to try to meet their needs. And I have an amazing team that slowly but surely we started with just me and about one or two other people today, we’re about 17 people that are working on the Sostento mission. And so it has been a huge learning experience. It’s been a roller coaster of ups and downs, and you know, it’s just an inspiring work that we continue to do for the frontline as they look at where we are and how we can continue to respond to the pandemic, but deal with our other public health issues that maybe we’ve neglected. And we have to get back to hopefully as COVID quiets for a bit.
Brad Caruso (05:22):
Oh I’m sure. And just with, you know, everyone knows that there’s a, you know, they call it the great resignation or staffing crises. There are a whole lot of things that aren’t talked about a whole lot. And I think your organization is directly affecting some of these issues that are not directly talked about. You don’t hear the focus a lot on frontline healthcare workers, other than early on in the pandemic, they were touted as heroes. Then eventually there is a whole lot of different conversation about it. So certainly the help that you’re providing provides a significant impact.
Joe Agoada (05:47):
Yeah. And I would just add one point is I think most uplifting about what Sostento does is that yes, we help, you know, the pharma health workers get the vaccination support that they need, the tests, the PPE, the funding. But what we also do that I don’t talk about a lot is that we bring together the health workers to come together as a network and just like spend time together. Even if it’s virtually every month, we have about a hundred frontline clinics that we support that come together on a webinar. And really what we do is we, we actually play music together. We have little updates from around the country cause our health workers are all around the country and they give updates about what they’re doing. What’s working well, the struggles that they’re seeing. And so sometimes our health workers just need something that will help lift their spirits. And what we do at Sostento is give them a convening. And a lot of ’em say, well, we never had a chance to see each other. Sometimes we feel really isolated or alone, but those kind of, of moments that we bring health workers together are really, uh, something special that we do at existent that I don’t talk about a lot.
Brad Caruso (06:43):
Yeah. I love hearing that. And I think that just bringing people together, having people have their voice heard, we make assumptions all the time about what people are thinking. Isolation is a real problem, especially for a lot of healthcare. I mean they’re work in significant hours. They’re putting in significant effort, they’re dealing with significant challenges. They’re on the frontline of the actual issues themselves too, before the rest of the public is. And you know, they’re dealing with a lot of emotional and very serious things. So, you know, to anyone out there who is a frontline healthcare worker, we appreciate your effort. We’ve all been affected by all the hard work you put in and keep fighting. The fight is what I’ll say. It’s hard to deal with all the noise around it, but it’s appreciated more than you would think. And I think your efforts Joe are helping prove that, which is there is a voice for you. There is a conversation, a lot of people are experiencing the same thing and we’re all gonna get through this together.
Joe Agoada (07:25):
Absolutely.
Brad Caruso (07:26):
I wanna switch gears a little bit cause one of the areas of growth, which really intrigued my interest, Joe, when you first talk to me about it and you hear a lot of buzz in the industry, but hearing a, a real life case study a real life story and how you execute upon it. It’s just so interesting. I’m really to be able to talk about it with you. Um, so I wanna talk about non fungible tokens NFTs. What is an NFT?
Joe Agoada (07:45):
So, you know, I see an NFT as a digital asset that lives on the blockchain and why it’s really important to know that it lives on the blockchain is because that is fundamentally what I think makes it special. And that is because it proves ownership in two important ways. Number one, it allows you to flex a digital asset that you own. So in many ways you can see when someone says, I own this thing. It’s like, well, how do you know you own it? Well with an NFT, you have the blockchain that shows transparently I own this thing. And the other, I think key part of an NFT is that that proof of ownership allows you sometimes to be part of a community of others that own that NFT. And so while there’s still a lot being explored because the NFT could be a collectible, it could just be pure art.
Joe Agoada (08:39):
It could be your per profile picture. It is really still just a digital asset that lives on the blockchain. It is something that you can then flex that ownership of and then can have you feel that you’re part of a community, whether that’s a community that owns the same NFT, a community with an artist who can then directly engage with you and others who are holders of that NFT of that artist. And so I think there’s a lot of excitement and hype around it because of the ability for individuals to flex these NFTs that they own and be part of a new type of virtual community. And I think the pandemic actually helped fuel this because we were all kind of quarantined for time. We couldn’t go out and be part of other communities that were normally a part of in the real world, you know, because of the inability to congregate. And so I think the NFT allowed us to build new types of community and that has definitely created a lot of excitement. So to me, that’s what an NFT is. There’s the technical side of it, but then there’s kind of what it does and what it creates.
Brad Caruso (09:42):
You’re starting to hear more conversation about this publicly about it used as a fundraising vehicle. Why do you feel, I guess from your perspective, it might be popular as a fundraising vehicle, you know, how does Sostento view it as a fundraising vehicle?
Joe Agoada (09:55):
Well, it’s important for me to kinda put it in context. So like we talked about in the beginning, our nonprofit was a startup, like a pure startup when the pandemic began. And so because we were in the first year of our organization and it was literally just me and, and two other people and no one knew our brand and the pandemic hits, we have to get right to work. We were able to kind of get going right away because we were first, right. We were first to respond to the pandemic cause we were small. We were agile because of our mission because of my background of doing international public health emergency response. I was able to hear from folks like this is gonna be a challenge. And we were able to quickly identify a group that we needed to support, which are a special part of the frontline called free and charitable clinics.
Joe Agoada (10:39):
These are volunteer and donor driven health providers that really support those that fall all the way through the crack. Those that are uninsured or undocumented that, you know, for whatever reason, aren’t getting healthcare anywhere else, when they need something, they’re gonna go to a free and charitable clinic and there’s 1400 of them all around the country and they are really the ones that help our essential workers, our working poor families living below the poverty line. So in the beginning we have a first movers advantage because we’re new, we’re agile, we’ve identified these free and charitable clinics to support and we get right going in the pandemic and we’ve actually got some funding because we’re the only ones in the arena, however, slowly but surely as we get through to 2020 into 2021, there are many people entering the pandemic space and many people doing COVID response.
Joe Agoada (11:26):
And we have donors that really stepped up, I would say in 2020 are getting fatigued. So your traditional donors are getting quite fatigued and everyone is trying to think, well, what’s next? How do we deal with this situation? And so by the time our organization gets to early 2021, like I said, we’ve grown rapidly to a $500,000 organization. We’re getting some additional funding, but now we’re seeing there are not the same kind of free flowing of funds that we had the year before. And we have a lot of new competition from organizations that, you know, weren’t doing the COVID response early, but now are doing cause everyone is doing it. And so the competition for funding opportunities gets really, really fierce and as know, necessity is often the mother of innovation. And so it became necessity for me, the CEO of Sostento to be like, well, how do we fulfill our mission if these dollars are kind of getting short?
Joe Agoada (12:25):
And so this was the perfect storm that allowed me to start recognizing NFTs and cryptocurrency as a potential to fulfill our mission. And that’s where our communications and marketing officer comes in. So I was really lucky that I had someone on my team who was actually already engaging in this space. So actually even early in 2021, they said, Joe, we should be paying attention to this NFT crypto thing. Like I think there’s something there. So I listened a little bit, but I’m like, well, what does it have to do with us? Like, I’m not sure about this, but what really kind of inspired me to start really seriously thinking about it was actually a specific NFT that comes from the NBA called NBA top shot. And these are NFTs of like clips of the NBA. So again, that’s like, what is an NFT? Well, in this case, it’s digital collectible clips of NBA players on the blockchain that you can prove I owned.
Joe Agoada (13:18):
And so I’m a basketball fan. So I kind of understood it. But what happened was during the, I think late spring of 2021 NBA top shot runs a fundraiser where they auction off top shot, NFTs to fund community vaccination work. And this was the exact thing that Sostento was trying to raise money for. So what we get is that perfect storm of like not having funding. Things are drying up. You gotta look for new sources, what are we gonna do? And then that NFT that my communications and marketing officer had been talking to me about goes, look at what they’re doing. They’re running a fundraiser. And they raised over a hundred thousand dollars for community vaccination events at a time where I’m like, well, where am I gonna get my funding to do community vaccination events that my frontline health workers are telling me that we need?
Joe Agoada (14:08):
So that was the perfect storm to like get started in it. From there, I’ve really gone down the rabbit hole. There’s a whole story that we can get into. But the hype I think starts getting real because I saw other nonprofits had actually done other NFT charity auctions and raised some big bucks. There was these kind of huge gains happening with NFTs being ten Xing a hundred Xing that’s when I kind of was like, all right, we really need to explore this space. Someone just raised money for the exact issue area that we needed get for, we’re seeing the big dollar signs being flashed in the space. So that’s sort of just the beginning of that story of why me as the CEO of a nonprofit looked at a very new emerging space and decided that we should invest time and resources and seeing what we could do.
Brad Caruso (14:52):
Yeah. And your innovation and your strategy of just looking into it is the first step and the most important step. A lot of conversations I’m having right now, people are staying away from it cause they say they don’t understand it. I don’t know if anybody really fully understands necessarily what they’re getting into, but at the same token, there was a direct connection with your mission with this particular platform and it directly connected with you. So you were able to wrap your head around, okay, this makes sense for my nonprofit. Not only is it gonna bring in cash flow, but it’s directly related to what we’re trying to accomplish as a, not-for-profit. And I think that’s where a lot of organizations, they don’t always bridge the gap. It’s, you know, why am I gonna do this versus that? Or I may have an older donor base if they don’t want to get involved in it. And I think the bigger picture is, you know, it, it is a new form of fundraising. It’s a new form of donor base that may not be your traditional donor base and they have different concerns and cares. And you know, you are able to connect the dots there, which is very important and also very beneficial to your organization. As you’ve shared.
Joe Agoada (15:44):
I’ll share a little bit more about that. It is kind of something that is scary and there is risk involved and how I, started once. So once that like top shot thing happens, I’m like, okay, they raised the money for it. I would say the next step that anyone should do is not to jump right in, but to start engaging authentically in the space. And that begins with understanding what the technology is. And obviously you have to geek out and understand exactly how it works, but to be able to fundraise from this community and engage, you need to be able to authentically have conversation with that community. And so I started doing my homework. I really started to, you know, read articles, listen to podcasts. A lot of them are on Twitter. So Twitter is like the place where the NFT community kind of congregates.
Joe Agoada (16:29):
So I went on there, I joined Twitter spaces. I listened and actually over time I saw that they were really had a charitable spirit in the NFT community. So what I started to see from again, if you’re worried like, oh, is this risky? Should we do it? Take your time and engage authentically and listen and learn first. And what I learned was that there was a charitable spirit baked into this community that all the NFT projects often had. We’re gonna give a percentage of our sales to a charity. These were folks that were younger and probably were not old money. They had never done, you know, donations before, but that was what was a value to them. And so I was able to start being part of conversations with NFT projects, not asking for anything, you know, I would jump on some of their Twitter spaces and they would actually allow me up to talk to them and they would say, Hey, we’re trying to do charity work.
Joe Agoada (17:24):
How can a nonprofit stay on chain? And I would be like, well, let me explain to you why my charity cannot take a donation from you of an NFT or crypto right now because I can’t buy PPE in Bitcoin or Ethereum. I can’t turn an NFT and trade it in for PPE. And so I, as a nonprofit of charity, still live in a centralized world and I understand your values of decentralization and I have some basic understanding of the blockchain and how it creates transparency. And yes, these are some core values that I also have, but I would have conversation about where we as the charity of the nonprofit are and have them understand what it would be like to work with us. So I would just say if you’re a leader in the nonprofit world or you’re a charity and you’re like, this is a interesting, but I’m scared. There’s a lot of risk involved. There’s really a low risk of just taking the time to learn and engage and have conversation with those in the space and they’re open to it. So that was one thing I learned early is they wanna talk to you. They know that they need to do education to you and that they wanna learn from you. So I, I just wanna say that if you see the hype and you’re worried and you wanna get involved, that’s a key first step to take.
Brad Caruso (18:31):
Your comment there. That I think was a revelation to me a little bit too, was getting involved in the community itself. Right? So it’s not as simple as, okay, I’m just gonna tomorrow put a button on my website and it’s, this is just gonna magically create cash flow for me. And there’s a strategy for it. There’s as you mentioned, a very important strategy behind it that you have to execute on and you’re gonna learn along the way. I’m sure you had every day were like, oh, let’s change the way I’m going about this.
Joe Agoada (18:59):
Yeah, there’s definitely ups and downs to the journey. So if you’re someone that needs that consistency of not getting to emotional and not having big ups and downs of moments, when you’re, they say in the, the crypto NFT language is going to the moon there’s moments of that. And there’s moments of what they call being rugged, which is you expect something to happen. Someone pulls the rug out from you and you have to change your plan. So there’s definitely that ups and downs, you know, a quick story of someone I met through those kind of engagement and end up donating to us, and I think is really symbolic of the kind of amazing people that are in the space was an individual named Sean Williams. Sean was an up and coming artist out of Chicago. And during the pandemic, he was working, two jobs was very much a starving artist.
Joe Agoada (19:43):
And he had the time to really get into his art and he got into NFTs. And I think his story also shows the power of NFTs, which is that Sean did not need to rely on art galleries or art dealers to get himself out there and break through. And so he was just on Twitter showing his art, talking about what he was doing and offering it to be sold as an NFT. And so he was making sales and he was doing really well. I think he had, you know, he was making major sales for himself and he broke through and he did not need that middle man of the art dealer. And he was doing direct to his customers. He was really building a community around him and I was able to connect with Sean and I was super impressed with his hustle. And I talked about the work that we were doing.
Joe Agoada (20:30):
And I said, Hey, will you commission a piece for us? Will you create a piece of your artwork that we will auction off when you auction off, you’ll take the proceeds and you’ll donate it to us through be an intermediary that takes in the crypto donations and helps us process it. He was able to create a piece in a few weeks and we sold it for around $4,000. And that was a donation that came to us. And so Sean was someone at the beginning of the pandemic. Who’s just trying to make it himself. He made it as an artist. He didn’t see himself as a philanthropist or as a donor, but because we engaged with him, we had authentic conversation with him and we talked about Chicago, the communities we were working in Chicago, we support health workers out there. And so he created that piece for us.
Joe Agoada (21:13):
And he got the sale done and the donation. That I think shows you that through that conversation, through that engagement, you meet people like Sean. And I’ve worked with a lot of artists. We raised around $130,000 last year through our NFT charity auctions and our crypto donations. And it was through that kind of meaningful connection we made with the artist or with the collector or with the project of NFTs. And they were totally game to help us. And it was through that connection that I kind of started to see, okay, there’s something real here. There’s real people. And there’s a whole class of donors that are untapped. Young people who’ve never given before. They don’t know exactly what it means, but you can see from these projects, they wanna do something. And if you’re willing to engage and you really communicate authentically with them, you’ll have things happen. Like what happened with Sean and Sostento, where someone who, who had just made it themselves, was able to give back through their art. It was amazing.
Brad Caruso (22:08):
That is amazing. You know, raising $130,000 is amazing. And just how you engage that engagement is so important in just understanding the process in connecting. We all know this, right? Anyone that’s, beening an not-for-profit knows about engagement, donor cultivation, but it’s a different form and a different conversation. You’re engaging different types of individuals. You know, the, this case you’re engaging the artist, right? That’s not what you typically hear or see. When I look at this particular transaction stream, I think one of the biggest challenges people have in wrapping their head around an NFT is how does an artist convert art into an NFT? And then how does that NFT then make its way to you, which makes its way to cash. How do you view that conversion process?
Joe Agoada (22:50):
So I can kind of walk you through another one of my favorite stories of how we raised money last year. So there are these like NFT communities, they’re often called PFPs profile pictures because the NFTs meant for you to put as your profile picture on social media to show that you’re part of that community that you purchased that NFT and that you’re, uh, member of, of that community. And so there is an NFT called the cool cats NFT and how those NFTs were created is called a minting process and minting. And again, I don’t know all the technical jargon here, but it’s pretty simple to understand in this way that there were 10,000 of these cool cat NFTs art pieces they created, right. But they’re kind of living, let’s say in the cloud somewhere, right. Until they get minted. And a minting is when an individual.
Joe Agoada (23:39):
So Brad, if you said, okay, I’m gonna purchase one of these things I’m gonna give you, let’s say, uh, you know, know some Ethereum. And then that NFT gets minted, which means it gets put on the blockchain. Right? So for me, minting means the NFT goes from some magical place where we don’t know where it lives to the blockchain. And when it’s on the blockchain, it means that. And when Brad mints it and he’s got that cool cat NFT, Brad can say, oh, I’m put that up. As my profile picture. And Joe can look and go, oh, there’s Brad’s NFT. Does he own that? And I could look on a publicly available blockchain and say, yes, Brad actually owns that cool cat NFT. That’s like, how it comes into existence is this minting process. And we talked about the blockchain as this like transparent kind of ledger that proves digital ownership of the asset.
Joe Agoada (24:26):
It’s now Brad that is the owner of that cool cat NFT. And so there’s 10,000 of them. In the project, the artist, they actually hold onto some of them. So they might sell, let’s say 9,000 of them, but maybe there’s a few that they hold onto. And so the cool cat NFT had gotten minted. And those things went from being worth a few hundred dollars to being worth literally tens of thousands of dollars if you owned one. So we actually reached out to that cool cats project and said, Hey, would, does the project have any of these cool cat NFTs left that have maybe been minted, but that the project still owns. And they said, well, we said, we were trying to do a fundraiser for frontline health workers. Do you have one of these NFTs that the project has owning and has minted and you’re willing to auction off for us.
Joe Agoada (25:10):
And they said, actually, we have a perfect cat NFT for that. Cause each one is like a randomly generated, like the cats have different hats or different qualities about them. So there’s a whole thing. We can rabbit hole. We go down there and that, but basically they had a cool cat NF T one of the 10,000 from the collection that was a nurse. It was a nurse cat that had this huge smile on its face. And they said, you know what? We own this one and we’ll auction it for you and we’ll give you the proceeds. And so then what we did next was we did a number of promos around, you could buy this NFT in proceeds from your, the sale will come to Sostento. And we ended up doing the day of the auction, a Twitter spaces where we had the cool cat artist.
Joe Agoada (25:58):
So the person that was the artist behind that NFT, the project community manager, it’s called the one that kinda engages everyone that owns that NFT collection myself. And one of our clinics, the frontline health workers that needed funding badly. And we ended up doing a Twitter spaces when the auction was coming to a close to talk about, if you buy this NFT, where is the proceeds going? So ended up, there was someone in the audience who was a software developer that had some, you know, crypto currency to their name, obviously, and their wife was a nurse. And they said, I really wanna purchase this one to give to my wife as a gift. And they ended up purchasing it at the time for around nine Ethereum was the winning auction bid that was around $38,000 that we made. And so what happened was that that individual purchased from the cool cats project, that nurse NFT, and there, then there’s like a transfer on the blockchain.
Joe Agoada (26:55):
So the cool cat project no longer owns that NFT the individual, the software developer, I believe they were from San Diego. They sent the cool cats project, the nine Ethereum and the cool cats project sent them the NFT. So now on the blockchain that software developer can show ownership. The cool cat project then took that nine Ethereum and they processed it through our partner called The Giving Block. So there are a number of third party processors, our partners, The Giving Block that then took that nine Ethereum converted it to USD gave all the receding to the coolest project for that donation. And then The Giving Block put in our nonprofit account, the $38,000. And so what’s interesting there is that we were able to do a workaround. Sostento never owned the NFT. We actually never even took in Ethereum, but we were able to get the $38,000 donation by really engaging authentically with the project, asking them for the help, doing the whole promotion, running the auction. And then we were making clear what the impact would be from that sale that’s how Sostento played in that. And really de-risk the situation for us, which is we didn’t have to hold the NFT. We didn’t have to take in the crypto. We just got the $38,000 donation at the end of the day, but you can see the amount of work and engagement that we really did authentically to get there.
Brad Caruso (28:19):
And that’s a phenomenal story. I think that’s a perfect way to put, to context the project, what an NFT is the value of an NFT externally, you know, there’s a digital asset, right? So many of you out there hear about cryptocurrencies. You hear about Bitcoin Ethereum, or either another form of cryptocurrency that sits on the Ethereum blockchain. You have to use these forms of currency or digital asset to then acquire an NFT. So there’s a lot of different concepts that are floating around that I know in conversation with a lot of people, they understand some of ’em like when you hear cryptocurrency, they automatically think Bitcoin and it’s no, no, no, it’s a digital asset. And there are multiple digital assets that sit on multiple different blockchains, right? So you have the Ethereum blockchain, you have the Bitcoin blockchain, you have different blockchains then that now these NFTs are gonna live on.
Brad Caruso (29:05):
You’re gonna acquire them. And then to convert that to Fiat currency, usable country backed currency, you have to then figure out how to do that. Well, a lot of organizations may use a third party. The Giving Block is an example. And for those of you listen to an episode, we had recently, we chatted with The Giving Block on the exact topic, how they operate, how they partner with not-for-profits and how they help not-for-profits it’s super important to find a partner. It makes life easier for both you, the donor and compliance purposes. Compliance is something that many of us don’t wanna deal with per say. And I think it’s important that, uh, we have a partner that can help us deal with that. And, you know, having all that lined up before it even happens, right, this doesn’t just happen tomorrow. Oh, I’m gonna accept this NFT and get cash. It, it doesn’t happen that way. There’s a process. So Joe, I appreciate you sharing all of that and your specific example, and it’s so relevant and just understanding how it works and how you got to having cash in your bank.
Joe Agoada (29:55):
Yeah. And if you’re still early in this process and you wanna kind of get a better sense of it, like my aha moment with the cryptocurrency actually, and the NFTs a little bit came when I went on one of the exchange platforms. So there’s a lot of these platforms where you can buy an exchange NFTs and there’s one called, um, opensea. So I went on opensea and I could see all these NFTs being sold and the prices were all in Ethereum. And really my aha moment when I realized what cryptocurrency was, which is really software, was that not only were the NFTs being sold in Ethereum as the cryptocurrency, but these NFTs lived on the Ethereum blockchain, that Ethereum was the blockchain that proved the ownership of the NFT. Cause I had heard a Bitcoin and I saw it as, oh, this the storage of value.
Joe Agoada (30:42):
It’s a way to speculate. It’s something you could put money in and you hope it goes up or it goes down or people use it to buy things on the black market cause it’s anonymous. And so that’s what I kind of understood cryptocurrency to be until I came to one of these NFT exchange platforms. And I said, no, wait, Ethereum is the software. It’s the blockchain that proves the ownership of the NFT. So yes, it is also the value that I’m saying, oh, here, Brad, I’m gonna give you two Ethereum for this digital asset, this NFT that you’re gonna then send me. But that proof of ownership is also built on Ethereum on that blockchain. So that’s what I’m like, okay. There’s a lot more here than just a currency, a storage of value, something to speculate or make transactions with. But that actually Ethereum and a lot of these blockchains are the way that we can show ownership, show transactions, have that kind of ledger.
Joe Agoada (31:35):
And so that was like a key aha moment for me. And then what I would say is that if you have that aha moment and you’re in the nonprofit and you’re like, oh, let’s do this. This is really exciting. The next thing that you need to do is go talk to your chief operating officer, your finance team or your administrative team, and why is that they need to do the risk assessment. So I kind of talked through the hype and we’ve kind of talked through the exciting part of like, oh, let’s do it. But I think the risk assessment is very important for your organization. You need to take that seriously because you need to first decide, do you wanna take the NFTs in directly or not? That’s a personal choice, but it does get complicated because how the IRS views these assets, how to evaluate them.
Joe Agoada (32:18):
There’s still a lot of unknown there. We need to assess. So we found kind of ways to work or around that with The Giving Block, but still that risk assessment in talking that through with your administrative and finance and operation team is really important because there’s also risks associated with the artist or the project. There’s a lot of anonymity, that’s like a core value in the space. But for example, people right off the bat wanted to send us things and we didn’t do it. We really wanted to talk like with Sean, I called him, I talked to him, we, you know, vetted that out before we said, okay, Sean, do this promotion with us. Like let’s sell something together because the transparency we talked about is both exciting in the space, but it’s also part of the risk, uh, I know that there was a project in the past where even someone had hacked and stole cryptocurrency and sent it to the charity and it can see on the blockchain.
Joe Agoada (33:10):
Okay, look, that donation you just took in, came from a hack and that’s actually, you can see that transparently. So before you get deep into really talked to your administrative team, we were really lucky at Sostento, Jennifer Estevez, our COO was gained to learn and go through the learning process with us, but she gave us that discipline. And so it’s really important that you talk to your COO team. Cause it depends if you’re a small nonprofit, if you’re a large nonprofit, you need to really vet out those risks and understand them and understand there’s gonna be volatility. You may get an NFT. It may not sell. We did a bunch of auctions. There were NFTs that artists created really cool pieces for us and they didn’t sell. And so if we had taken those in, it could have been an even a bigger headache for our team. Make sure you do your due diligence. Make sure you think about the risks with your operations and administrative and finance team.
Brad Caruso (34:00):
Great point, Joe, there are many stakeholders in all of this. You have your board of directors that are gonna need to be involved in this because of the risk component. You know, back in the day, the equivalent was land donations, right? Organizations would accept land donations and then find out there’s all these environmental issues with the land. And then you can’t sell the land cause the town doesn’t let you. And you don’t have an attorney doing the due diligence and then an accountant saying, well, what does this go, gonna look like on your books? And what is the tax ramification of accepting it yourself as opposed to just accepting cash. One area that our firm has been specifically helping out with in our tax department is now what are the tax implications? What are the filing requirements? What are some of those issues that pop up, if you’re going to open your own wallet and you’re gonna accept a digital asset yourself, or you’re gonna hold that without having it converted prior to getting to you, I think all very important considerations and, and glad you brought up the risk component, which the conservative auditor in me is always risk, risk, risk.
Brad Caruso (34:47):
And we constantly are thinking about that, which is there’s a huge risk with it. However, with all risk, there’s an opportunity and it’s not a one size fit all. And every organization, this may not make sense for, you know, there’s environmental organizations that say specifically, I’m not going to go near digital assets because of the backend of how some of these things are mined or minted. And you know, I don’t know all the specifics, but certainly there are considerations I’ve heard from board discussions of, we’re not even gonna entertain this because of the external PR risk. And as you mentioned, there’s a PR risk of accepting something you don’t know where it’s coming from, or you don’t know the originator of it all valid concerns. So the key point for the not-for-profits out there listening it’s what is it that you should consider? Who should you talk with? How do you go about that conversation? And when do you start? And I think you start the conversation today and I think you arrive at a conclusion that makes sense. And it’s not a tomorrow thing. It could happen over six months, you have to do research.
Joe Agoada (35:41):
Then why did Sosento take this risk? We talked a little bit about it in the beginning, which was, you know, we were a new brand in the space. There was limited funding. There was a bit of necessity right, to it. But now Sostento recently got a huge funding from the federal government to do our COVID response. Right. So why would I still wanna go into this risky space? Right? Why would I still want to do this? Part of it is definitely that there’s still needs of the frontline health workers that are not being met by the traditional donors by this government funding. I have restrictions on it, but I would say like the bigger reason even with all these risks and volatility, why you still need to be paying attention at least to this space, as things are maybe getting a little bit clearer is that this is a new generation of donors.
Joe Agoada (36:31):
So there’s a huge difference between the cash rich and the crypto rich community. When you’re cash rich, you can already see yourself as a philanthropist. You already understand sort of your old money or you’ve got that lots of cash. I think those folks kind of know how to view themselves as a donor, but I would say those individuals are already really tapped, right? They’re already have their causes. They’re already giving. So we have to pay attention to this new class of donor, which are younger people who are wealthy in crypto that don’t wanna simply just take it off chain and give it, they need very tailored education and understanding of what it means to work with a charity and a nonprofit. And so this untapped group of young people who are not in position to give have in the past now are. You can’t ignore this group because when your older donors age out, you’re gonna need to engage with these younger donors.
Joe Agoada (37:27):
They’re gonna become really important for you to be fulfilling your mission. And so while you know, there’s a risk with anything new, I just think the folly of someone being like, oh, well, uh, oh, the environmental concerns. I’m not gonna look at this, the risk of the anonymity. I’m not gonna look at this. I really think that you will be missing the boat of these really important donors, because I’ll tell you there are special blockchains that are promoted as being carbon neutral that are really taking into consideration some of those environmental concerns. And so maybe there is a, a specific crypto or NFT project that you could still work with. I’m excited to engage with this young demographic of folks that never saw themselves as donors were never in position to be able to make donations. And yet now they are, and they’re gonna be a force to be reckoned with.
Joe Agoada (38:15):
And so if you’re not getting to at least know them and communicate with them and understand them, then in three to five years, maybe when rules are a little bit clearer, they will already have formed relationships and have connections with other charities and nonprofits that did this work early. Uh, and so that would be like, you know, the, again, you’re getting the sense of that I think we were doing a good job of working in the NFT crypto space, it’s ups and downs. It’s like it’s called, um, FOMO and FUD cycles, right? That’s what they call in the crypto space. Um, FOMO is fear of missing out, right? Of like, oh my gosh, if I don’t talk to these new young donors, I’m gonna miss out. But then there’s FUD the fear of uncertain doubt of who they are, where this money’s coming from, the environmental concerns that’s called the FUD.
Joe Agoada (38:59):
And so get ready for the cycles of the FOMO and FUD if you’re in the space. Uh, but for me, how I kind of weather that is that I’m actually beyond a few of those NBA NFTs. I do not purchase NFTs. So I’m not big into the space. I’m not seeing them as an investment vehicle or anything for myself. So that allows me to kind of keep an arms length from the cycles of the FOMO and FUD, and I can really take my due diligence. I can take the conversations. I can work with groups like yours. Brad, you’re advising us in this space. Uh, The Giving Block is advising us in the space. You can have those conversations and I could do it with a little, a level head. Uh, and knowing that this there’s a risk in anything new, right? There’s a risk in it trying anything new.
Joe Agoada (39:44):
And so that’s, I, uh, you know, that’s part of the game. I think what I’ve done also is to know that I’m gonna have to switch up our plans quickly. So when I redid our fundraising campaign with our team, we, we knew that we would have to pivot. We knew that there was moments when we’re like, oh my gosh, we’re going to get a huge donation, but then, oh my gosh, we can’t actually take that donation. Or we can’t take it the way that we want. There was one NFT project at the time, I wanna say the NFT was worth close to $20,000, but they were not willing to auction it themselves. They were like, no, we just wanna send it to you. You do the auction, we don’t wanna do it. And we had to say, no, we had to say no. You know what?
Joe Agoada (40:24):
We had the discipline, thanks to our COO to say, no, we have to actually leave that $20,000 on the table. And that was hurt. That hurt a little bit. Right. But we were able to change up our plans. We were able to continue to engage with the other projects and know how to communicate clearly, why we couldn’t take the NFT and why we needed them to do it in the way. And enough of them said, okay, we got it. We understand it. We will work with you through that. So get ready for those ups and downs. But if you’re able to say, Hey, we’re gonna be agile agile. We’re gonna have to change our plans potentially in the middle of it. If you’re willing to do that, I would say, this is a great space for you. If you’re not, if you’re like, no, we, I don’t want that volatility.
Joe Agoada (41:09):
I don’t want that up and down. I wanna plan it. I wanna stick to it, then just wait it out. You can wait it out. Uh, you can still maybe engage authentically in the space and learn, but it’s for you. Uh, so anyways, it’s a little bit more of what it feels like from the, the CEO of a charity or nonprofit going through this. Um, you know, and I’ve, I’ve, I’ve felt a little bit of the hurt, you know, ups and downs. But because again, we really knew our limits and I was not personally invested in the space. It, it made it so that we could, we could be resilient and be successful at, with which at the end of the day, raising $130,000 from the auction of what some would say are just JPEGs or photos, you know, is something kind of mind blowing.
Joe Agoada (41:50):
Uh, and then we’re able to use things for, you know, we operate free ride program for clinics. So one of our really special programs here at Sostento is that we’re able to provide, uh, a program where clinics can actually order rides for individuals that don’t have transportation to get to their critical, essential, you know, life saving healthcare appointments. Well, now that we have some of NFT funding, we have flexibility to continue to grow that program and focus in on it while maybe there isn’t a donor wanting us to continue to do that. We definitely have a lot of support on the free rides, but it allows us to do things that we think are important rather than just, you know, maybe what the traditional donors want us to do. So that’s what the freedom that we have gotten from being able to have, have that funding in our, in our corner.
Brad Caruso (42:34):
Yeah. Love your personal story. And, and the ups and downs is important to understand, and the, the real time decisions that you have to make, and some of those are hard to make. Those are challenging decisions to make while they’re happening. And, you know, you may have, and you invested a lot of time and you get to the point of, I have to say, no, or I have to, this is it. We’re taking a chance. We’re making it happen we’re rolling the dice. And you know, and it’s gonna change. There’s gonna be services in the future. There’s gonna be things in the future that change that are gonna disrupt this industry to the point where all of your innovation, someone’s going to develop something that’s going to take its place, you know, unfortunately, but it it’s fast. It’s fast moving. It’s, you know, two years ago, no one heard the term NFT. Now everybody’s like NFT NFT. You know, it’s a vending machine in New York that you can buy an NFT from. Vending machine. It’s, it’s a thing. So moving fast. So, so Joe, just, just to, uh, close it up here, how, how can the public help you? How can, how can organizations, others, individuals, people that have the NFTs or crypto, how, how can individuals help you and Sostento continue to do the work that you’re doing?
Joe Agoada (43:36):
Yeah. So, I mean, my call to action here would just be to continue to have the conversations and engage. And so that would be following Sostento on Twitter or LinkedIn, where we are talking about what we’re doing with the crypto and NFTs about what the impact it’s having. We’re pursuing right now, for example, with that cool cat nurse cat that I talked about, we’re actually trying to work with the clinic to put up a mural of that NFT by at the clinic, cause they received a lot of support. They got critical piece of equipment they needed because of that sale. And so we’re looking to engage with them, continue the story, put up that artwork, uh, and continue the conversation. So you can join us on social media. Um, you know, mostly Twitter and LinkedIn, keep the conversation going. Uh, you know, I’ve been talking to a lot of nonprofits that are trying to figure this out.
Joe Agoada (44:24):
Uh, and so we gotta also stick together as a sector, uh, learn from each other, share and continue to engage authentically with the NFT community and have them, you know, the more as nonprofits and charities, we can educate the NFT community about what it means to be a donor, what it means to be a philanthropist. I think there’s a lot to gain from all parties. So yeah. Join us in the conversation, check us out. You know, if you are an NFT or a crypto project, we’d love to hear what you’re trying to do and, and talk with you about it. Um, so yeah, that, that, that would be the main thing. Let’s just keep talking let’s as we are waiting for, for some of the, the rules and regulations to be figured out, let’s keep talking with folks like, you know, with you, Brad, that kind of are working on that compliance side so that we can do this in a way that, you know, it doesn’t, doesn’t hurt our ability to administer, um, our funds or, you know, puts our 501c3 at any kind of risk. You know, these are conversations with all the different parties that we could be having to grow this amazing new space of crypto NFTs in philanthropy.
Brad Caruso (45:26):
Love it, phenomenal story, phenomenal mission. I think just all of your real, real life experience and you know, going out there on, on a ledge and making it happen. I appreciate you spending your time with us, Joe Agoada, founder, and chief executive officer of Sostento. I mean, we really appreciate you joining us on the civic warrior podcast and thanks so much, Joe.
Joe Agoada (45:46):
Thank you, Brad, for, opening up this, uh, opportunity, to chat about this.
