Coffee and Crypto Part 1 - Crypto Philanthropy

This article is a collaboration between Stephan Koch from Hanns R. Neumann Stiftung (HRNS), and Drew Simon from Crypto Altruism. It is part 1 in a series of how blockchain and cryptocurrency could potentially disrupt the coffee industry.

Hanns R. Neumann Stiftung (HRNS) is an independent foundation in operation since 2005. The aim of the foundation is to improve the social situation of people in tropical countries (especially the producers of agricultural crops such as coffee), the welfare and education of youth, and the protection of nature and the environment. HRNS pursues its objectives through proactively implementing project work and programs, engaging in partnerships and cooperation with like-minded organizations from the public and private sector as well as learning jointly with partners and sharing experiences and lessons learnt. Since 2001, HRNS has reached more than 300.000 smallholder families in 18 producing countries and plans to reach an additional 100.000 families until 2023.

Let’s talk about coffee. Billions all over the world start their day with a cup of coffee, or maybe two or three. When you meet up with a friend, you “grab coffee”. If you need to pull an all-nighter to meet an important deadline, you better bet coffee will be at your side.

Despite coffee playing such an important role in the lives of many of us, there’s not usually too much thought put into where the coffee came from; how it got from the other side of the world, in the form of raw coffee beans, to the delicious cup of coffee you are drinking.

In addition to those who consume coffee everyday, there are also millions of people around the world whose livelihoods rely on coffee farming. Unfortunately, many of these individuals also live in poverty, and are struggling to keep afloat with their family farms.

In this article, we highlight some of the challenges faced by coffee producers and the role crypto philanthropy can play in supporting them.

The problem

Coffee is produced in more than 60 countries, with around 12.5 million smallholder families worldwide depending on coffee for their livelihoods. Most of these smallholder families live in poverty and grow coffee on small pieces of land in combination with other crops. They face numerous challenges, such as a lack of agricultural knowledge or access to competitive finance, production inputs, markets, technology, quality information, and land titles.

Farmer organizations exist in most coffee producing countries but are often weakly managed, ineffectual, or dysfunctional. Smallholder families are largely left to act alone in the market, usually at the lowest value point, and without access to support. Coffee production and the cultivation of other crops is being adversely affected by climate change and environmental degradation.

The voices of women and youth are rarely heard, which leads to inequalities in decision making and unfair distributions of responsibilities between family members. Young people lack opportunities and do not see a future in agriculture. Consequently, they are migrating to urban centers in search of job opportunities. In many cases this results in precarious employment situations.

At the same time, the farming population in coffee regions is aging, and the potentials of future generations cannot develop. Sustainability programs within the coffee value chain often neglect small holders at the bottom of the supply chain.

HRNS’ solution

There are many great organizations around the world working to improve the livelihoods of coffee producers. HRNS’ work goes beyond coffee production alone. They support smallholder families to take a proactive role in shaping their own lives in an informed and self-determined way. HRNS is driven by the conviction that diversified production is the backbone of rural well-being, as it reduces risks of internal and external shocks such as price volatility, climate hazards, or pests and diseases.

Improved agricultural output advances the economic situation and fosters the living standard of smallholder families. To enable such positive improvements, HRNS’ approach combines the development of advanced agricultural practices, appropriate farm and household management strategies, adaptation to climate change, and member-oriented farmer organizations. Gender equality, intergenerational dialogue and skills development for young people are vital in all project activities.

HRNS supports the farming community to advocate for their needs and promote entrepreneurship, respect, and integrity as values of decision-making. As a result, smallholder families are driving prosperous development of their livelihoods for themselves and their communities.

In the difficult situation the world is in today with the joint consequences of the pandemic, climate change, supply chain difficulties, food shortages, high input prices, inflation and much more, holistic approaches are more important than ever.

Supporting coffee producers with crypto philanthropy

How can the crypto community support? Crypto philanthropy has already gained strong momentum as an additional fundraising channel for non profits in recent years. Approximately $300 million in crypto has been donated to charitable causes in the record year 2021.

Crypto donors are incredibly generous, with one study finding that nearly half of crypto holders donated $1,000 or more to the charity in 2020, compared to only a third of the investor population as a whole. Crypto donors are also much younger, globally connected and more digital than the average donor.

Crypto philanthropy can thus help non-profits expand their reach globally, and connect with a new donor demographic, helping them diversify their revenue. Donors on the other hand can now give to their preferred causes in their desired cryptocurrencies, their donation is processed in a matter of minutes, and they also generate significant tax benefits depending on the country. It also demonstrates that non-profits value transparency, as all crypto donations are recorded on a transparent and immutable blockchain, ensuring that donors know exactly how much the non-profit is bringing in.

For more information on crypto giving, check out our blog post: Ten reasons non-profits should embrace crypto philanthropy in 2022.

Crypto philanthropy will help HRNS continue expanding their support for the most vulnerable smallholder families who need to adapt to the realities of a new and rapidly evolving coffee production environment, especially when it comes to the impact of climate change. Naturally, climate change is one of the most critical issues for smallholder families in tropical countries, and the changing climate is threatening the livelihoods of those working in coffee production around the world.

The coffee plant is particularly sensitive to these changes in weather patterns, and soon entire coffee growing regions could be eliminated. Scientists predict that 25%-60% of Africa’s coffee could be lost by 2050. This would lead to significant loss of income for many smallholder families, and drive increased migration from rural areas. In Uganda alone more than 1.7m smallholder families rely on coffee.

With additional crypto donations, HRNS will further focus on their climate work with coffee farmers in Brazil, Central America, Ethiopia, Indonesia, Uganda and Tanzania. Coffee production must become climate smart to prepare the next generation of coffee farmers for these challenges to come, and HRNS is working at the forefront of this challenge.

Smallholder farmers are often overlooked when it comes to the important impact they already have and will increasingly have on maintaining balanced agricultural production systems of the future. These more diversified smallholder production systems can contribute significantly to the storage and long-term systemic sequestration of CO2, in addition to all the other benefits that come with agroforestry.

These systems moreover offer ecological diversity, further income sources, and the protection of natural resources. In short, through the work of HRNS, they are educating smallholder families and improving these systems together with them, so that they can help themselves first and foremost, while also contributing to the fight against climate change.

Hanns R. Neumann Stiftung North America (HRNS NA) has partnered with the Giving Block, the top facilitator of crypto philanthropy, with the launch of their #CoffeeFarmerCryptoFund in April 2022. They accept more than 80 cryptocurrencies including Bitcoin, Ethereum or Solana. To learn more about HRNS NA, and to make a contribution in cryptocurrency, check out their page on the Giving Block HERE.

Coffee and crypto culture

Now, you may be wondering, how does crypto match with coffee? Coffee is actually ubiquitous in crypto culture. It all starts with #DYOR. Who could really research 20,000 cryptocurrencies (Coinmarketcap) and 80,000,000 NFTs (OpenSea) without some good coffee? Many of the daily Twitter spaces where crypto users discuss latest news and developments are called Crypto & Coffee. Crypto Investors usually spend their days looking at charts or researching on Twitter, Discords or, Telegram, with a coffee by their side. Coffee fuels this sometimes pretty intense lifestyle. And, of course, when people send their “gm’s”, it’s often accompanied by a coffee emoji.

But there is so much more to it than just that. Whether it’s the coffee themed NFT projects, or the belief that one day, crypto will be the most common form of payment for your morning coffee, there are many overlaps between coffee and crypto. Now, it’s time to make crypto philanthropy, in support of smallholder coffee farmers, part of the culture and give back.

HRNS NA is at the start of their crypto fundraising journey and is excited to connect with like minded individuals from the crypto and NFT communities. They are also open to getting to know NFT projects which align with their mission. The aim is to be the voice and advocate for coffee farmers in web3 as new digital coffee communities are emerging around NFT projects these days.

HRNS NA would love to partner with one of the many coffee themed NFT projects, to help ensure they are thinking of coffee from farm to cup, as opposed to just looking at the end product. Crypto, Blockchain and NFTs are technologies that have the power to be beneficial for everybody. Let’s make sure #WAGMI really means “We are all gonna make it.”

All in all, new technologies present amazing opportunities to improve livelihoods around the world, but it is important that this is not just limited to those in the developed world. Join HRNS NA, and help them ensure that web3 technology plays a core role in improving the livelihoods of smallholder coffee farmers around the world.

Stay tuned for future blog posts in the Coffee and Crypto series, where we explore how blockchain can help improve coffee supply chains and further support smallholder farmers. If you want to connect with HRNS NA and follow their web3 journey make sure to follow them on Twitter @HRNStiftungNA.

Support HRNS with Crypto