Cryptocurrency is a digital asset and unit of exchange produced using a unique identifiable code. It is impossible to facilitate fake transactions, it cuts across international boundaries, and it can be stored on your hard drive instead of in a bank. Moreover, every cryptocurrency transaction is tracked in a public ledger allowing for more transparency, especially with regard to philanthropic donations.
It is estimated that roughly 14% of the U.S. population owns cryptocurrency. This translates to 21.2 million U.S. adults who own cryptocurrency, and other studies estimate this number to be even higher. The Giving Block, a crypto donation platform for nonprofits, facilitated a record $2.1 million in cryptocurrency donations to nonprofits during the month of December 2020.
Many donors have been drawn to donating cryptocurrency directly to 501(c)(3) nonprofits since it is more tax efficient and can save the donor money. According to the IRS, cryptocurrency is classified as property, similar to other assets such as stocks, bonds or vehicles. When a donor gives crypto to a nonprofit, they receive a tax deduction for the fair market value of the crypto and avoid the capital gains tax that would have been incurred had they sold the crypto before donating. This means donating crypto translates into a larger donation for the charity and a higher tax deduction for the donor.
The average donor in the United States is 64 years old; however, in contrast, the average crypto holder is just 38 years old. We know that this younger audience, and in particular millennials, prefers to give digitally, which includes mobile crypto donations.
There are currently over 450 nonprofit organizations listed on The Giving Block platform, already taking advantage of the benefits of accepting crypto donations. With many platforms available the number of organizations accepting crypto is growing daily.
Why Accept Crypto?
- Cryptocurrency donations are quick, easy, and mobile.
- The nonprofit receives more of the donation since there are lower, if any, transaction fees.
- International donations are easier to accept with no exchange fees.
- Accepting crypto donations expands your donor database beyond traditional donors.
How to Accept Crypto?
- Set up a digital wallet. There are many platforms where you can do this, including The Giving Block, GiveTrack and Binance Charity. Features that you will want include:
- An Institutional Account: Open an account with your 501(c)(3), not individually.
- A Fundraising Platform: Don’t just put a button on your site and wait. Join one of the platforms listed above.
- Autosell/Auto-receipt: Open an account that can sell the crypto for you and issue donor receipts.
- Add a crypto donation button to your charity’s website.
- Advertise to your donors that you accept crypto donations – reference this donation option in your newsletters and promote via social media.
- Review and monitor donations as they are received.
As we approach the year-end giving season – and Giving Tuesday, the biggest online fundraising day of the entire year – many donors are gearing up to make their annual contribution to the nonprofits they care most about. Millennials are heavily influenced by social media, and with the large online push during Giving Tuesday, millennials are the generation most likely to donate during Giving Tuesday and year-end campaigns. Why not leverage this as an opportunity to reach an even larger pool of potential donors by getting set up to accept cryptocurrency? Reach out to our team to learn more!