- What’s Driving Crypto’s Popularity?
- Who Owns and Donates Bitcoin?
- How Much is a Crypto Gift Worth in Cash?
- Methods of Accepting a Donation in Crypt
- Taxes and Reporting
Cryptocurrency is among the most underutilized revenue stream generators for nonprofits. Many charities struggle to understand the benefits of accepting crypto or have reservations about the technological details. But crypto is here to stay, and that’s great news for nonprofits.
Setting up your nonprofit’s cryptocurrency donation platform is easier than you might expect. When done right, it’s safe, regulatory compliant, and efficient for fundraising teams and their donors. And much like digging a well for clean water, the benefits are long term and quick to outweigh the early setup costs.
Learn the basics and discover the best practices we’ve developed through our work elevating the fundraising game for hundreds of nonprofits by helping them accept crypto donations.
What is cryptocurrency fundraising and how does it work?
Cryptocurrency fundraising is the practice of cultivating donors who give in the form of a virtual currency like Bitcoin or Ethereum. In order to accept cryptocurrency gifts, nonprofits need a digital platform where they can direct donors.
The problem is that almost all nonprofits today use donation widgets and forms that accept cash but not cryptocurrencies. For many, setting up a crypto donation platform seems like a big step and it likely requires getting several approvals.
But beyond integrating a crypto donation form, nonprofits have much to gain by taking time to understand how it works, the benefits for donors and nonprofits, current trends in the cryptocurrency landscape, proven fundraising methods, and other ways to start heading in the right direction.
Crypto Fundraising is Here for Good
Nonprofits looking to accept cryptocurrency as a new revenue source are in great company. Major global and national players in the charitable sector, including Save the Children, Direct Relief, American Cancer Society, World Vision, No Kid Hungry and United Way, have established crypto and bitcoin donations as a key part of their long-term fundraising strategy. The move toward crypto adoption among nonprofits comes at a pivotal time in philanthropy.
Several areas of traditional fundraising seem to be trending in a concerning direction. Giving USA’s Annual Report on Philanthropy for the Year 2020 found that corporate giving, which includes cash, in-kind contributions, grants, and gifts made by corporate foundations, has declined by an estimated 6% in 2020, totaling about $16.8B. Meanwhile, organizations focused on health and arts, culture, and humanities have faced overall losses in contributions in the last year. Across the board, hardships caused by the COVID-19 pandemic also posed numerous fundraising challenges, with in-person events such as walks and charity galas made impossible and many nonprofits seeing their reliable donors giving less (or nothing) in 2020.
Though we’re yet to fully grasp the ripple effects of COVID-19 in the world of philanthropy, many worried fundraisers are finding hope in accepting cryptocurrency donations, noting its emergence as a force for funding social good.
What’s Driving Crypto’s Popularity?
As of 2021, it is estimated that more than 106M users globally hold at least one form of cryptocurrency, such as Bitcoin, Ethereum, or one of thousands of other cryptocurrencies. With the user base nearly doubling each year, total cryptocurrency users are on pace to reach more than 200M by 2022.
A recent report prepared by Crypto.com found that crypto adoption is likely driven by “huge growth of DeFi [aka decentralized finance] last summer, PayPal’s opening up crypto services, and massive institutional adoption and facilitation of cryptocurrencies.” In other words, crypto users are increasing as more and more businesses (and now entire countries, such as El Salvador) accept cryptocurrencies as a legitimate form of payment. Many investors also believe that bitcoin will continue to increase in value and popularity at a rate many times faster than gold in the coming years, further driving up demand.
The adoption of crypto by nonprofits and charities will further push cryptocurrency into the mainstream. The Pineapple Fund, which gave away bitcoin grants to 50 nonprofits valued somewhere between $55-86M, thrust crypto philanthropy into the headlines in 2018. Today we can see its continued influence throughout the crypto community, from individual investors to blockchain companies, who see charitable giving as a way to highlight crypto’s potential to make positive change in the world.
Who Owns and Donates Bitcoin?
Cryptocurrency investors tend to be young and tech-savvy. A study found that 94% of crypto buyers are between the ages of 18 and 40, the majority of whom are millennials. As a generation raised on the internet and mobile phones, millennials and their Gen Z peers are quick to adopt new digital and virtual technologies, and tend to view crypto as a more reliable investment than traditional stocks.
The strong returns on bitcoin, ether, and others have brought new wealth to many young investors. They see donating a portion of their crypto gains as a way to support causes they care about while also reducing their tax burdens. (Don’t worry, we’ll talk more about this later!)
Year on year, we have seen crypto donations continue to increase. Currently, about $300M is donated in the form of cryptocurrency each year. In the first half of 2021, The Giving Block’s donors and charities have more than doubled the entire previous year’s worth of cryptocurrency donations!
We’re doing our part to help make crypto the most charitable industry in the world, in part by launching the Crypto Giving Pledge, which encourages annual charitable giving by high net worth individuals who invest in crypto. We also support social giving initiatives like #BitcoinTuesday, the #GivingTuesday community campaign for crypto.
The momentum is now virtually unstoppable and it’s the perfect time for your nonprofit to seize the opportunity to find new donors ready to give crypto to your cause.
Make a donation today
Other Ways of Giving Crypto
The Giving Block works with donors and nonprofits to give and receive cryptocurrency through a variety of alternate methods to direct giving.
Donate with NFTs
“Non-Fungible Token,” or NFT, is a type of data stored on a blockchain, often in the form of crypto art or music. A NFT can be bought, sold, and resold on specific platforms meant for trading them. Big names, from Jack Dorsey to Mick Jagger, are putting up their content for auction. And recently, Christie’s became the first major auction house to get involved, selling artist Beeple’s work, Everydays – The First 5000 Days, for $69.3M.
The most efficient way for NFT creators to give to a charitable cause is to auction off their NFTs and donate the proceeds directly to the charity of their choice.
Creators can generate a wallet address using The Giving Block’s widget, and configure it so that nonprofits can receive royalties in perpetuity every time the NFT is sold.
Charity Coins & Tokens
The Giving Block makes it easy for cryptocurrency charity projects such as charity tokens and coins to donate directly to nonprofit organizations. Charities accept many cryptocurrencies including bitcoin and ethereum, and are arranged in categories based on their mission.
Projects can make a donation and will receive a receipt by email that will verify that the donation was made to a wallet that is controlled by the nonprofit organization.
Is your charity token or coin interested in supporting a nonprofit? Let us know by contacting us here.
How to Donate Crypto to Support Charities
The simplest way to give crypto is to make an online donation directly to a nonprofit. The Giving Block also makes it easy to find a charity you’ll want to support. We’ve broken the process down into three quick steps.
Make a Crypto Donation in 3 Easy Steps
Support a cause that matters to you by selecting a charity that accepts donations in crypto.
1. Find a Charity
Either search the charity by name, or choose a category using the dropdown option. Is your favorite charity not listed? Contact us to nominate a worthy organization. We have made it possible for several nonprofits to accept crypto because they were nominated by donors interested in supporting their cause.
2. Make Your Crypto Donation
First, select Bitcoin, Ethereum or another cryptocurrency you want to donate from the dropdown, and enter your donation amount in the crypto of your choice or USD. Next, fill out some basic information about you (optional), and enter an email address where you would like to receive a tax receipt. Third, a dynamic wallet address will be generated for your donation which is linked directly to the charity’s wallet. We use dynamic wallet addresses to protect your privacy, but these addresses can be re-used if you’d like! Use this to send the cryptocurrency from your wallet or exchange account.
3. Get Your Tax Receipt
Donors can choose to receive a tax receipt via email. This will arrive as soon as your donation has received the minimum amount of confirmations on the blockchain, so keep a lookout for it. If you can’t see it, double check your spam or junk mail, and contact The Giving Block if you require it to be resent.
Be sure to file away your tax receipt in a safe location that is accessible when filing your tax return and use it for proof of your donation.
Where to Donate Cryptocurrency
More than 300 charities that work with The Giving Block accept donations in Bitcoin, Ethereum, and other cryptocurrencies.
If you don’t see your favorite nonprofit on this list, get in touch with us to nominate one today.
As the interest among donors and nonprofits continues to increase, we expect to see fast growth in crypto philanthropy. Together, we can make crypto the most charitable industry in the world.
ABOUT THE GIVING BLOCK
The Giving Block was founded in 2018 after seeing hundreds of millions of dollars in crypto being donated to the few nonprofits that were equipped to accept those donations. Our mission is to ensure that nonprofits from all sectors are equipped to accept cryptocurrencies and are connected with those in the crypto community who wish to donate. We achieve this with their founders’ wealth of experience in cryptocurrency as well as nonprofit fundraising and operations.