How to Get Started with Cryptocurrency Donations at Your Nonprofit
We’re all hearing more and more about cryptocurrency these days. And as a nonprofit professional, you might be wondering what cryptocurrency is, what it means nonprofits, and how you get started with it.
The truth is that cryptocurrency can seem intimidating. But it doesn’t have to be.
Let’s look at a few basics to help you decide if it’s time to consider cryptocurrency for your nonprofit and how to get started.
What is cryptocurrency?
Simply put, cryptocurrency is a digital currency that can be transferred electronically. You may be most familiar with the cryptocurrency called Bitcoin, but there are many other forms of cryptocurrency. Cryptocurrencies are traded on platforms, or exchanges, such as Coinbase and their value can go up and down.
What does cryptocurrency have to do with nonprofits?
There are basically two ways a nonprofit can get into the world of cryptocurrency. The first, and most common, is simply by accepting cryptocurrency donations, just as you would accept donations via cash, check, credit card, stock, or real estate.
The second, and less common, way is to invest in cryptocurrency. While some larger nonprofits might invest in cryptocurrency as part of their investment portfolio, it’s not how most nonprofits get started in the crypto arena.
Why would a nonprofit want to accept cryptocurrency donations?
Here are a few statistics to consider:
- 16% of Americans say they have invested in, traded, or used cryptocurrency. (Pew Research Center survey)
- 83% of millennial millionaires own cryptocurrencies. (CNBC survey)
- The annual volume of crypto donations jumped from $4.2 million in 2020 to $69.6 million in 2021. (article from The NonProfit Times about a report from The Giving Block)
- The average cryptocurrency donation in 2021 was $10,455, up 236% from $3,109 in 2020. (article from The NonProfit Times about a report from The Giving Block)
In short, the user base of cryptocurrency appears to be growing. And so do crypto donations.
Accepting cryptocurrency donations is a way to expand the giving experience for your donors. It helps you to tap into a new community of donors and remove barriers to giving by allowing more donors to give the way they want.
And donating in cryptocurrency is appealing to some people because it offers substantial tax advantages for the donor. The IRS has classified cryptocurrency as property for tax purposes, so it’s like donating stocks or real estate; however, it can be instantly converted to U.S. dollars on the public market.
How can a nonprofit get started accepting cryptocurrency donations?
You can easily get started by using a cryptocurrency donation solution like the one from The Giving Block. They offer a sort of “PayPal” for cryptocurrency for nonprofits. Essentially, it allows you to accept cryptocurrency as a form of payment on your donation form and then automatically liquidate it into U.S. dollars.
Learn more about cryptocurrency and nonprofits
I recently asked Pat Duffy from The Giving Block and Heather Bennett from the nonprofit, Direct Relief, to join my recent podcast for NonProfit PRO to talk about how easy it is to start accepting cryptocurrency donations and why starting small is best. Listen to the podcast, How to Easily Start Accepting Cryptocurrency Donations at Your Nonprofit and learn more about adding crypto as one of your donation options:
