Cryptocurrency donations from a financial institution to a charity are one kind of promotion or marketing. Anyone can grow their business by donating crypto.
Bitcoin prices crossed the $50,000 milestone in February, and in 2022 total cryptocurrencies crossed the $1.5 trillion market cap, reaching historic levels. This rapid growth means that a rapid generation of millionaires will be created who can begin to be considered philanthropic.
What this could mean for charities is that when it comes to raising capital for these new millionaires, the option of donating directly to Bitcoin, Ethereum, and other Altcoins can be very attractive.
This is because a cryptocurrency directly donated to a charity will be set on the market price of the transfer, avoiding the taxes required to liquidate the assets.
Basically, for a registered 501c (3) the gift will be *20% more valuable and the donor will receive the full value of the gift (*depending on the tax rate applicable).
What’s more, these types of donations will probably be more in line with their belief because the alternative is to pay more taxes on government policy that donors may not support. The nonprofit can then potentially benefit from that wealth because it can grow tax-free.
What exactly is cryptocurrency crowdfunding and how does it work?
Cryptocurrency fundraising is the practice of cultivating donors who give in the form of virtual currencies such as Bitcoin or Etherium. To receive cryptocurrency gifts, nonprofits need a digital platform where they can instruct donors.
The problem is that a lot of nonprofit donations use widgets and forms that accept cash but not crypto. For many, setting up a crypto donations platform seems like a big step, needing certain approvals.
But beyond integrating a crypto donation form, it takes time to understand how nonprofits work, the benefits for donors and nonprofits, current trends in the cryptocurrency landscape, proven fundraising methods, and other ways to get started.
What is Driving the Popularity of Crypto?
As of 2022, it is estimated that more than 106M users worldwide have at least one form of cryptocurrency; such as Bitcoin, Ethereum, or one of the thousands of other cryptocurrencies.
With almost double the number of users each year, total cryptocurrency users are expected to reach more than 200M by 2023.
A recent report prepared by Crypto.com found that crypto adoption was probably driven by “the huge increase in DeFi [aka decentralized money] last summer, the opening of PayPal’s crypto services, and the widespread institutional acceptance and convenience of cryptocurrencies.”
In other words, as more and more businesses (and now all countries, such as El Salvador) accept cryptocurrencies as legitimate payment methods, crypto users are growing.
Many investors also believe that Bitcoin will continue to grow in price and popularity at a much faster rate than gold in the coming years, further increasing demand.
Acceptance of crypto by non-profit and charitable organizations will push the cryptocurrency further into the mainstream. Pineapple Fund has given bitcoin grants to 50 nonprofits worth millions.
Today we see persisted impact across the crypto community. Individual investors and blockchain companies see charity as a way to highlight the potential of crypto to bring positive change in the world.
Which Charities Accept Donations in Bitcoin and Other Crypto?
All types of charities accept cryptocurrencies: large, small, global, local, old, and new.
Chances are if you’re reading this, there’s been a recent phone call with your executive director asking you to “find pitiful donors” and “diversify the organization’s sources of income.”
Many organizations struggle to use social media to reach new potential donors, while others repeatedly ask their young alumni networks what is notoriously difficult to transform from potential to active donors. Nonprofits are increasingly turning to crypto as an alternative to the traditional way of propaganda.
Giving Block allows nonprofit clients from around the world to receive gifts with new cryptocurrencies in Bitcoin, Ethereum (ETH), Dai (DAI), Dogecoin (DOGE), Litecoin (LTC), Zcash (ZCASH), and more. Being supported by the platform at all times.
Here we work with several types of US 501 (c) 3 non-profit organizations and international charities:
- First Responders & Veterans
- Fiscal Sponsor Organizations
- Addiction & Recovery
- Community Foundations
- Community Service
- Developmental Disabilities
- Arts & Culture
- Children & Youth
- Disaster Response
- Donor-advised funds
- Education & Training
- Immigration & Refugees
- International Development
- Legal Support
- Racial Justice
- Religion & Faith-Based
- Water & Hygiene
- Women & Girls
- Health & Medicine
- Higher Education
- Human Rights
And many more…
How to Accept Donations in Crypto
Whether you’re representing a large, well-established nonprofit or a small local charity, setting up your crypto-giving platform and taking your first crypto gift is just a few simple steps to follow.
We guide you through all nonprofit compliance steps to ensure your institutional-grade cryptocurrency account is properly set up. From there, we create a widget that you can embed in the pages you donate, as well as a custom profile page on our donation platform that often generates over 80% of our clients’ cryptocurrency donation revenue!
Once they are launched, you are ready to receive cryptocurrency grants and start promoting your brand new cryptocurrency option!
In addition to direct donations to cryptocurrencies, some donors choose to offer cryptocurrencies in a number of new and innovative ways. Rest assured, we will always be there to help and support your donors if they are interested in one of the following methods:
NFTs (non-fungible tokens) are data stored in a blockchain, often in the form of music or visual art.
Creators who are interested in donating to a charity can sell an NFT through an auction, then donate the proceeds to a charity. The popularity and price of NFT have reached new heights. Christie’s has recently become the first major auction house to be involved, with artist Bepel selling work at a record $69.3M.
Decentralized financial platforms like 1inch have started to integrate donation features. Another way to embrace DeFi’s charitable options is to show the crypto community its interest in social good.
- Charity coins and tokens
Charity tokens and coins are other formats that the crypto community uses to support nonprofits.
Special charitable coins are made and sold to consumers who buy them, knowing that some or all of the proceeds will be a non-profit.
Crypto Fundraising: Taxes and Reports
Nonprofits receiving crypto will want to get familiar with the general tax guidelines for crypto gifts.
In the United States, cryptocurrencies are classified as assets by the IRS, so cryptocurrencies may be considered a charity write-off for donors and tax-free for nonprofits. Many other tax departments classify cryptocurrencies similarly.
Crypto investors looking for ways to reduce their tax burden often find charitable giving to be the perfect solution, which benefits them and the reason they think about it.