Fundraising is the lifeblood of charities and is of great importance to nonprofits. Most nonprofit/nongovernmental organizations rely on fundraising to cover the costs of campaigns and programs driving social impact.
Over the last few years, a large number of charities and foundations have been trialing bitcoin donations. These include well-known organizations like the Red Cross, Save the Children, United Way, the Wikimedia Foundation, and the Electronic Frontier Foundation. Once established, an online “wallet” allows charity institutions to accept bitcoin and other cryptocurrency donations and these are later exchanged for fiat currencies such as the dollar. In some cases, online wallet providers offer 0% processing fees for nonprofits, compared to the 2% or more required by traditional donation processors. This means, potentially 100% of donations can end up in the pockets of charity organizations or donation recipients. Bitcoin donations to charities are also tax deductible in most countries and offer donors the added benefit of avoiding capital gains taxes on the dollar amount value of their cryptocurrency donations.
In the United States, it is difficult to say how much money has been generated through bitcoin and other digital currency donations. There is evidence to suggest that bitcoin transactions are on the rise. Fidelity Charitable, which houses the nation’s largest donor-advised fund, reportedly received $69 million in cryptocurrency donations in 2017, up from $7 million received in 2015 and 2016 combined.
In addition to direct digital currency donations, there are a variety of other innovative and unique platforms and projects underway in the emerging “crypto-philanthropy” space.
If there is greater transparency in giving and impact does lead to increased confidence in charities, millions (or even billions) of dollars more could be generated for the social sector.
Now is the time for philanthropists, foundations, and nonprofits to come together with social entrepreneurs, blockchain visionaries, and technologists to collectively guide the direction of crypto-philanthropy. The future of giving is for all of us to imagine and create, built on our common love of giving back.