Cryptocurrency Donations – What Nonprofits Need to Know
As mentions of Bitcoin and Ethereum continue to circulate among the financial sector, many people have questions about the relevancy and legitimacy associated with cryptocurrency. Despite this hesitancy, cryptocurrency is an extremely secure way to exchange funds, and accepting cryptocurrency as a method of donation can lead to significant growth for many nonprofits.
In our most recent webinar, PBO Advisory Group’s Rick Dahlseid and Tom Hillebrecht were joined by crypto analyst Nathan Gurr and The Giving Block’s Alex Wilson, who explained the nuances of accepting cryptocurrency donations and discussed the rise and prominence of crypto in the new Web 3 landscape.
Here are some of the key takeaways from their discussion.
What nonprofits are good candidates to receive donations via cryptocurrency?
Nonprofits who are well-versed and active in the digital world are the ideal candidates to embrace cryptocurrency donations. These include established organizations with a strong and existing social media presence, as well as a secure website that accepts credit cards. They should have a “digital first strategy” and be interested in creating new donor experiences to connect with new benefactors and demographics. Additionally, as much of the younger generation owns and is more inclined to make donations of cryptocurrency instead of cash, nonprofits who want to connect with and appeal to the behaviors of younger donors are great candidates for organizations that should embrace cryptocurrency donations.
Why should nonprofits consider accepting cryptocurrency?
With $1 billion of crypto donated in 2021 alone, noncash giving is the fastest growing method of giving in the world. As businesses, organizations and individuals begin to embrace this new element of the digital age, donations via cryptocurrency are becoming the norm and will soon be the default method of giving. These types of donations also tend to be much larger, averaging at $10,000.
Is it safe and reliable?
Yes! Because it has a public audit trail, cryptocurrency is extremely transparent and trustworthy. (Cryptocurrency transactions are nearly impossible to counterfeit, making them much more secure than cash.)
Is cryptocurrency environmentally friendly?
Yes. The myth that cryptocurrency is harmful to the environment is just that—a myth. Mining for crypto is actually more efficient than mining for gold and 60% of the energy used to mine for crypto is green and renewable.
Do I have to own Bitcoin or Ethereum to donate or receive donations of cryptocurrency?
No. Cryptocurrency also encompasses stablecoins, which are coins tied to our standard currency. One of the most well-known stablecoins is USDC, or U.S. Dollar Coin.
How can PBO Advisory Group help?
PBO Advisory Group has a proven track record of helping nonprofits flourish. We are committed to the nonprofit sector and aim to help provide the education and assistance necessary for charitable organizations to feel comfortable and confident embracing cryptocurrency in their daily processes. We are also developing a digital library of resources on our website to provide additional tools such as examples of gift acceptance policies.