Decentralized autonomous organizations (DAOs) are cryptocurrency-native entities that operate autonomously without any centralized authority, with governance managed by their members. DAOs collectively hold over $24 billion in combined treasury assets as of mid-2025, with liquid assets — excluding native tokens — sitting closer to $21.4 billion, according to DeepDAO, which tracks governance and financial data across more than 13,000 decentralized organizations. These figures fluctuate alongside broader crypto market conditions and can be tracked in real time via DefiLlama’s Treasury dashboard.
While DAOs can potentially donate money, they also involve crypto philanthropy that can disrupt the entire charity-giving scenario. These organizations have been capitalizing on which has led to vital social causes in fresh, innovative ways. Here, we will explore the crypto-philanthropic side of DAOs and tokens and how they fund social causes.
How DAOs Are Redefining Social Responsibility in Crypto
What does a DAO ideally give? The obvious answer is that a DAO can be used as a native cryptocurrency. This undeniably lowers the entry barrier since numerous DAOs have a stockpile of native tokens akin to a treasury, while some are naturally concerned about immediate sell-offs by receiving parties that would increase the selling pressure of the token and reduce its price.
Our analysis of DefiLlama’s treasury dashboard illustrates exactly why this tension matters. ENS DAO, for instance, holds a total treasury of $420 million — but $327 million of that is its own ENS token. Strip out native tokens, and the liquid treasury drops to $93.6 million. Gnosis DAO tells a similar story: $241 million total, but only $118 million excluding its own GNO holdings. For philanthropic purposes, it is the liquid, non-native portion that actually matters — the funds a DAO could realistically grant to a cause without crashing its own token price. Across the top DAO treasuries tracked by DefiLlama, the gap between headline treasury size and genuinely deployable assets is consistently 50–70%, a structural constraint that any DAO-based giving model must account for.
In 2021, the grant from Uniswap liquidated around $10 million, almost 50% to the fund’s allocation, which frustrated the token holders and backers of crypto philanthropy. This issue was addressed by using existing financial tools developed – Donor-Advised Funds (DAFs).
DAFs existed in the traditional world in the US for more than 95 years, serving as an efficient tax instrument for the owners of property, bonds, stocks, and other financial assets and facilitating donations to charity completely capital gains tax-free.
In a DAF model, donors donate their assets directly to the charity of the DAF provider, who then liquidates the assets without any taxes owed since it is a tax-exempt entity. Through DAFs, the recipient gets the asset’s full value while the donor, in certain cases, gets the tax write-off for their donation’s value.
The aforementioned grant by Uniswap would have been slightly different using this DAF model. By donating the same amount of UNI worth $10 million into Uniswap’s DAF and setting up the disbursement schedule in US dollars or USDC, Uniswap could have avoided the rapid sell-off.
DAFs offer additional control and flexibility to account holders and represent the most efficient and best means of making charitable tax-deductible contributions to nonprofit organizations.
5 Ways DAOs Are Transforming Charitable Giving
Let’s take a look at the social impacts of DAOs and how they fund social causes:
Why DAO Governance Creates Stronger Community Oversight
One very interesting use case of DAOs involves the creation of new processes and models for accountability. By using governance protocols and smart contracts, a DAO allows a community to exercise its power and ownership over specific causes that they want or care about, and also holds organizations and leaders accountable in that cause.
Any charitable organization should have an official board and some membership, but the opportunities for active community engagement in matters related to how the funds are being spent and the types of services and activities undertaken by the organization may often be limited.
Decentralizing the organization’s governance presents more opportunities for the members, including the beneficiaries, who can exercise their control in the organization’s operations. But this comes with a disadvantage. Having too many members involved can slow down and restrain organizational processes. Some people are suggesting that AI agents can be incorporated to help filter proposals, automate routine decisions, and make voting more efficient. This will also bring down friction and keep things running smoothly as DAOs get bigger and better.
There is also the risk of a 51% attack, where bad actors gather adequate governance tokens to take ownership and control of the DAO. Therefore, these risks need to be considered while designing mission-driven DAOs.
How DAOs Are Changing Traditional Fundraising Models
The most relevant social impact of DAOs is using them for fundraising or for offering direct donations to charity or charitable causes. They are set up to allow membership communities of those interested in purchasing governance tokens to support social causes. Communities are formed that collectively decide how to disperse the funds.
If 100 members purchase $100 of DAO tokens each, which grant them both voting permissions and membership, 25% of the tokens’ value can go towards charitable funds supported by the DAO. The token holders can vote on the social causes they want the funds raised (worth $2,500) to support, depending on the projects that the community members propose. With more members joining in, additional funds get added to the fund pool, which can be collectively used to pay out to charities.
DAOs organize NFT auctions, fundraising events, and campaigns for fundraising directly from community members. For instance, the Ukraine DAO, which emerged after Ukraine’s invasion by Russia, raised funds to support the Ukrainians through a 1/1 NFT sale and crypto donations. The Ukraine DAO could raise more than US $7 million in total within a period of a few weeks.
There are other instances as well, where NFTs have been used by philanthropic DAOs. In other cases, these NFTs are auctioned off or given as “thank-you” badges to the people who contribute. In this way, people are not just donating, but they are also getting something that is unique and ties them to the cause and the community.
Tracking Every Donation: The Transparency Advantage of DAOs
New opportunities emerge with DAOs that bring more transparency to the social realm. One central element of crypto and Web3 is transparency, and by incorporating more charitable events and activities on-chain, like fund disbursement or fundraising, it allows donors to calculate the amount of funds coming in, how they are spent, and funds going to charitable causes.
In addition to finances, transparency is also added by DAOs in decision-making and vital organizational matters. There is no secretive executive decision-making or in-camera voting session. All records of important decisions that DAO members vote on are available to the on-chain public, which ensures greater transparency and accountability.
Big Green DAO, which was founded by Kimbal Musk, is focusing on food justice and local agriculture. Instead of a traditional foundation deciding where the money goes, the members vote directly on which grants are to be approved. With these steps, the entire process becomes more participatory and trust-based, and gives communities a real say in how the funds are being used.
Peace DAO focuses on humanitarian relief. The main aim of this DAO is to make aid faster and more transparent in areas such as Ukraine, where accountability can save lives. By means of on-chain tools, it makes sure that the donors can see where their money is being used.
Another example is the Dream DAO, which supports young people who are working on Web3 and social impact projects. It is not about funding, but it is about providing mentorship, support, and a say in shaping projects that they back. This creates a blend of philanthropy and capacity building.
Community-Led Fundraising Through Decentralized Organizations
DAOs have created innovative ways to manage and organize communities that never existed before. These communities are provided with a structure to raise funds and conduct important services. It can be a local neighborhood group creating a DAO for fundraising for a local project, or a municipal government using the DAO structure for a referendum or for participatory budgeting.
With DAO, the use cases for social causes are limitless and truly amazing. An excellent example of this is Pact Foundation (formerly impactMarket), a cryptocurrency-UBI network built on the Celo blockchain that distributed over $1.65 million to 25,000 beneficiaries across 25+ developing countries by early 2022 — figures that have grown since as the protocol expanded. This is a unique community-driven structure that has allowed communities to take control and ownership of their UBI programs and serve as program managers for the onboarding of other beneficiaries.
The Emergence of Hybrid DAO-Charity Models
New hybrid DAO-charity models have been developed where on-chain governance joins hands with off-chain nonprofit expertise. The main aim here is to manage compliance and make sure that the impact is maximised. Here, regulatory clarity remains crucial, especially around tax. Since there is no clarity, reporting requirements are not clear in many countries. This makes it tricky to scale-DAO-based philanthropy while making sure that the donors get the receipts or tax benefits.
Are DAOs the Future of Social Impact and Philanthropy?
Crypto philanthropy through DAOs has moved well past proof-of-concept — the Ukraine DAO raised $7 million in weeks, Pact Foundation has disbursed UBI across 25 countries, and Big Green DAO has shifted grant-making power directly to token holders. These are operational models with on-chain track records, not experiments.
The next phase will be defined by legal infrastructure. No philanthropic DAO has yet solved tax-deductible donor receipts at scale — only those operating through a 501(c)(3) wrapper like Endaoment have managed it. As ESMA prepares decentralization guidance under MiCA in 2026, DAOs that build compliant hybrid structures now will be first in line for the institutional donors and tax-advantaged capital that remain out of reach for purely on-chain giving models today.
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