Thanks to the increase in the price of Bitcoin and other cryptocurrencies, nonprofits are increasingly turning to cryptocurrency as a new source of revenue. Beyond the revenue potential, some nonprofits are taking things a step further by looking at ways they can become more transparent, provide stability, and provide tax benefits to their donors.
1) Cryptocurrency Fundraising
Over the last few years, we’ve seen hundreds of millions of dollars in cryptocurrency donated to nonprofits. Why? Because of the massive tax incentive offered to donors who can give appreciated assets directly, rather than cashing out first. Like stock donations, when you transfer cryptocurrencies to a nonprofit, you pay no capital gains tax and can write off the full amount of the cryptocurrency donation. If someone sells Bitcoin and then donates the cash proceeds, the donation amount is smaller and as a result, so is their tax write off. To learn more about cryptocurrency fundraising and how your nonprofit can accept cryptocurrency donations, visit The Giving Block – a start-up of composed of cryptocurrency early adopters and change-makers.
2) Marketing and Awareness
Accepting cryptocurrency donations is just as much of a marketing opportunity as it is a fundraising tool. Cryptocurrency donations create viral content in ways traditional donations do not. This may come as a surprise, but there are an estimated 50 million cryptocurrency users worldwide and the number is growing. When Robinhood (the popular stock trading app for millennials) began offering cryptocurrency trading, they onboarded millions of new users and even had a wait list because of the overwhelming demand. Major cryptocurrency exchanges continue to add tens of thousands of users each day.
One way nonprofits have engaged the cryptocurrency community is through The Giving Block’s Brave Ad Grants Program. Selected crypto-friendly nonprofits, like Code to Inspire and the Human Rights Foundation, receive $10,000+ of free ads every month in the Brave Browser. Think of this as the equivalent of Google Ad Grants, but for a more tech-savvy audience.
A recent study showed that 18% of millennials own Bitcoin. Another survey from eToro showed that 43% of millennials trust cryptocurrency exchanges more than stock exchanges. Already, the term “bitcoin” is searched more often on Google than Kim Kardashian or Justin Bieber. As the cryptocurrency investing trend grows, so too will grow the cryptocurrency donation trend.
In addition to Bitcoin and Ethereum, nonprofits are using “stablecoins” to minimize volatility. Stablecoins are a new class of cryptocurrencies which attempt to offer price stability by having them pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (such as precious metals or industrial metals). This gives users many of the benefits of digital currency without price fluctuations.
The very nature of major public blockchains, like Bitcoin and Ethereum, is their transparency. Cryptocurrencies are the most transparent way of exchanging value ever created. Even the FBI and DEA have said they wish more criminals would use cryptocurrencies because they are so much easier to track. Anyone can view the entire Bitcoin or Ethereum blockchain back to the very first Bitcoin or Ethereum transaction.
Cryptocurrency donations are becoming increasingly common. Donors who own cryptocurrencies are quickly shifting their support to nonprofits who offer the ability to donate their cryptocurrency directly. As we saw with credit card adoption, with each uptick in the size of the user base, more nonprofits are entertaining the notion of fundraising cryptocurrencies. Like artificial intelligence and the Internet of Things, cryptocurrency has quickly become one of the top innovative technologies that give nonprofits a competitive advantage.
About The Giving Block
The Giving Block equips nonprofits to fundraise cryptocurrencies like Bitcoin, providing education, training, and a technical solution. For nonprofits who choose to go the extra mile, they advise on crypto fundraising strategies, and pair nonprofits up with partner crypto organizations, elevating fundraising and awareness outcomes. Ultimately, they help nonprofits build a crypto fundraising program, and a brand in the cryptocurrency industry.