Cryptocurrency donations are booming as the calendar winds down
Pineapple Fund’s online doors closed in 2018 after providing $55 million to non-profits ranging from the Water Project to the ACLU. Pineapple participated in a strong experiment conducted by “Pine”.
A Bitcoin-only philanthropy named Fund demonstrated the influence that Bitcoin (BTC) could have on charity missions and its impact on fundraising, which is a make-or-break component of nonprofits. The philanthropic community acted upon this demonstration by donating money to 60 charities worldwide.
What makes Bitcoin, Ethereum, and other cryptocurrencies so powerful for fundraising? People have envisioned digital coins as a tool that could help decentralise power. The other two objectives for creating and using cryptocurrencies are to alleviate economic inequality and help developing countries. Therefore, if you have an NGO and are looking for sustainable ways to raise money for your cause, you can consider adopting crypto donations. It’s especially important to reach out to a larger audience since more money is now going to causes like war and famine than local charities.
Why do blockchain-based virtual currencies appear to be the new money and investment tool for entrepreneurs and 501(c)(3) organisations?
Cryptocurrency donations allow for diversified revenue streams
You don’t need prior knowledge of blockchain, digital assets, and cryptocurrency to make cryptocurrency donations. But if you want to implement such payment methods, you will need to inform them about legal aspects in your country.
One main reason to accept virtual currency as a donation is that it helps diversify revenue streams. Donor apathy is a hot issue, but the reality is that even marginally decreased giving levels can negatively impact your non-profit’s capacity to function and execute its main mission goals.
The issue may not be with how you market your NGO’s goals. Current events, such as the humanitarian disaster in Ukraine, may have caused your usual donors to contribute elsewhere prior to your plea.
In situations like these, having another contribution stream, such as cryptocurrency, allows your organisation to rely less on one or two primary ways of fundraising. You’ll have more opportunities to fundraise and another donor base to interact with, meaning you’ll have alternatives regardless of the events, time of year or what’s happening around the globe.
Crypto’s likely to stay
Mainstream crypto adoption nowadays occurs at a rate similar to the internet in the mid-late ’90s. This is why you should keep up-to-date with economic trends, cryptocurrency and other digital assets. Owning and trading crypto is not hard, so if you’ve ever wondered how to buy Bitcoin, find out that it’s not complicated; it’s accessible and widely available. What is not that easy, however, is to predict which digital assets can bring you profits because the crypto market is highly volatile. Therefore, don’t invest more than you can lose, and always secure your money in a preferably cold wallet.
When you receive crypto donations, you can trade them for fiat cash. It’s only important to go with a popular, widely used cryptocurrency exchange because it uses good security programs to ensure your money is as safe as possible. It’s a good idea to examine the reputation of a crypto exchange before signing up for an account. Check into the history of the exchange, read customer reviews and look for any current news reports that may give some useful insight.
Of course, contributors want to know that their contributions are making an impact. However, while making charitable contributions, people also consider other things, such as tax deductions. Tax efficiency is likely the most evident benefit of Bitcoin, Ethereum and more crypto donations for your organisation and contributors. Donating cryptocurrency is an extremely tax-efficient method to donate to charity. And because the tax benefits of crypto donations frequently surpass those of cash donations, a crypto investor who wants to assist your cause would likely opt to donate digital money.
You can future-proof your organisations with crypto
The uncertainty of the future can be one reason why NGOs make efforts now to secure fundraising in the years ahead. Their strong will should inspire you to find ways to get your charity ready to raise funds during economic crises, recessions, etc. Preparing to deploy the next generation of non-profit technology to remain ahead of the competition and building a digital-first strategy for times when in-person activities are less popular should be among your NGO’s top priorities. These objectives can be met by accepting cryptocurrency donations or other payment methods.
There are many conventional fundraising strategies, like in-person galas and direct mail. These strategies generate a large annual gift volume, which makes sense given that the typical cash contributor today is around 65 years old.
However, as most organisations are aware, what inspires the 60+ group to offer money doesn’t necessarily resonate with younger donors. Crypto investors are a whole new type of donor, and most NGOs frequently ignore them. Crypto contributors are often young, wealthy, and committed to the organisations they support.
Most crypto users are Millennials, with Gen Z and Gen X coming next, and the average age of the crypto donner is 38. They’re also relatively wealthy compared to their peers, and according to a Fidelity Charitable report, they seem to be more generous, too. The report also shows that crypto donors seem more likely to contribute $1,000 or more to charities yearly than cash contributors.
Accepting bitcoin donations is a simple approach to connecting with a generous and younger contributor base that you aren’t currently accessing through traditional fundraising tactics.
Cryptocurrency donations are gaining ground worldwide, so you should consider crypto donors as potential supporters of your cause. They may help you accomplish your most ambitious fundraising objectives, regardless of your NGO’s size or purpose.
While they may charge service fees, crypto processors make it easier to take cryptocurrency, convert it to cash, and send out receipts; they may also help with marketing initiatives aimed at the crypto community.
This technique is chosen by NGOs who desire custody of the cryptocurrency or want to incorporate it more thoroughly into their fundraising.
However, keep in mind that exchanges are designed with the average consumer in mind and not donations, so using them can come with fees. And also, don’t forget that you’ll need a specialised wallet for receiving donations.