NFT for Membership Organizations - A Blockchain Think Piece
NFT for Membership Organizations - A Blockchain Think Piece

NFT for Membership Organizations - A Blockchain Think Piece

08/11/2021 by Justin Edelstein
Musings around a blockchain solution enabling membership organizations to engage meaningfully with constituents.
What is a NFT

At its core, a NFT is a digital collectible that lives on a blockchain. As of the time of writing this post, the majority of NFTs “live” on the Ethereum blockchain. One of the key reasons for this is Ethereum’s ability to facilitate something called a “smart contract”. The smart contract is one of the main keys in creating a network where people can transact and trade assets with varying degrees of value. 

So what is a NFT again? That was a lot of word vomit… again, very simply, a NFT is a digital asset that lives on a blockchain. It can be an image. It can be a video file or an audio file. It can be almost anything in terms of a digital file and they can be used to form clubs, play virtual games in a metaverse, and form online communities. Some entertainers have even launched a series of NFTs that allow the owners to watch a television show that was funded by the purchase of the series of NFTs (think Kickstarter but with provenance). Others have created a market around themselves, basically creating digital pieces, selling them, and adding in the utility of being able to attend a conference for three years, in essence turning the NFT into a ticket for a physical event. I can imagine a world where all tickets become NFTs & collectibles (I happen to have a ticket stub from game 5 of the 1956 world series hanging in my office as a collectible). We will get more into that throughout the post.

Why NFT 

One of the big draws to these digital assets is the personal ownership aspect. NFTs are issued by a creator (an artist, an influencer, a celebrity, a filmmaker, a corporation, etc.) and purchased by a collector (regular people like us). As mentioned above, provenance on the blockchain is a real game changer. Gone are the days of wondering if this is a real piece or a fraud. Gone are the days of wondering who owned a piece before you did and what was the actual chain of custody. Everything is logged to the blockchain. 

Ok, so, why does this matter in the world of memberships? Let's start to put the pieces together. 

Any NFT can be displayed and be shown off in a public way through a collector’s wallet (think of a wallet as a universal account on the blockchain). Membership organizations generally speaking print and send out membership cards. A few things about this: 

1 - it is rather wasteful to be printing cards and sending them through the mail to people in 2021 — not to mention how many people lose their cards, request new cards, and need a re-printed card

2 - it is rather time consuming to be printing cards and sending them through the mail 

3 - there is literally zero understanding of who has a card, when they got the card, and why 

4 - it is really hard to prevent fraud 

5 - probably most importantly, there is no connection between this physical laminated card that likely sits in a desk drawer and the organization that issued it — the connection is really lost at that point 

Building a real community of people that have a stake in the game or a cause or a profession is paramount to sustaining a membership organization. People will care more about it if they owned a part of it or felt like they owned their identity. A physical card doesn’t allow them to do any of these things, however, a NFT can be displayed online, it can be used as a community profile avatar, it can be utilized as a ticket to an event, it can be utilized to verify with authority that the person who says they are a member actually is a member. These are all plenty of good reasons to use NFTs as a membership model, but there's more that makes this even more enticing for the greater universe of membership organizations.  

Unify memberships through a wallet 

If all of a sudden membership organizations started to issue NFTs as membership “tokens” it makes the life of the members so much easier. A member can jump between different websites and experiences based on which NFT(s) are contained in the wallet at any time. This is a really interesting Web3 phenomena whereby a NFT acts as your identity and login to a website. The wallet that stores the NFTs is connected via a browser and websites ask for permission to “look inside the wallet to check for a specific NFT” and when it is found, login is successful. Whoa — that’s like a single sign on across the entire internet using a wallet?!?  

Additionally, smart contracts easily fulfill workflow around any start & end date periods — they are contracts after all. They can be programmed to auto-renew people, they can be programmed to incentivise referrals, they can be programmed to incentivize people to renew, and further they can be programmed to automatically provide additional services to the owner of the NFT at a later point in time - perhaps something that hasn’t even been thought of yet.  

Lastly, with native currency on a blockchain, commerce is made rather simple. This is the use case most people are familiar with - blockchain is synonymous with Bitcoin which is a currency, as is Ether, the native currency on the Ethereum blockchain. It stands to reason that by moving to NFTs an organization can make ecommerce much simpler for their members. 

Utility and personalization 

NFTs are not just pictures or videos or files. Embedded metadata allows for different levels or properties to be explicitly called out. This is a key in membership organizations. Think of a 1/1 or a 1/10 or a 1/200 that is created. Each may have different value based on scarcity or rarity, however the value can also be put into real practice by providing a unique and engaging experience for those 1/1 folks. Perhaps at the highest membership level perks are given out. Whereby at the 1/200 level some things cost a little extra from time to time or they miss out on some perks. To keep it really interesting, create a lot fewer of the 1/1 pieces, perhaps it’s a different color background or a completely different image and increase the price for them just as you would any other membership tier. 

As NFTs store additional metadata, things such as achievements through a membership ladder are easily fulfilled by “minting and air dropping” new achievements to already existing members. Now we have a way to see where people are within the organization membership structure. Perhaps a speaker at an event gets a special NFT, or an author of an article, or someone who explored a place in the world that’s never been seen before…?!?

Accept donations or sell more items in an online store

Donation models are wide open once a NFT project or blockchain project has been deployed at an organization. Commerce is extended to digital assets and physical assets all unified by a wallet. A NFT backed by a physical object is easy enough to see - this has already been done - think of a physical piece of art being sold alongside a NFT. In this example the NFT actually provides the provenance record of the physical piece and they are tied together in history on the blockchain. 

An NFT that spins off to then create physical objects is also a logical leap easily made - I can imagine a world where an organization mints 1,000 NFTs using a picture of an animal, and then once those 1,000 NFTs are purchased the organization takes to launching real world hats or shirts or SWAG based on the organizational culture. Add in the ability to understand if these consumers are members or not and you’ve got a real game changer in terms of what can be offered to whom and when. These new items could therefore be sold to existing NFT holders (members) or not… The sky's the limit when it comes to commerce. An organization can also setup online giving forms to accept crypto, that’s for an entirely different blog post however...  

Cool art for membership cards 

This is really where I land on this topic. People love to collect cool things. A membership organization can make something really special and unique with an artist & grow awareness with a cross community collaboration. Every artist has a cause and every cause ignites and inspires artists — NFTs couldn’t be more of a perfect vehicle to marry these two things. Bored apes are actually members of a thriving club & online community. Engagement is through the roof. I rarely see this within most membership organizations, I wonder if NFTs would bring people closer together through cool art. 

Well that was a fun little jaunt through a thought experiment and think piece on where blockchain technology and NFTs can fit in the nonprofit community and specifically within membership organizations. What do you think? Please feel free to comment directly at me on Twitter @JustEdelstein to continue this conversation.