Thirty years ago, non-profits were asking themselves if they should set up a way to accept gifts from their website. Many non-profits at the time were really skeptical. “Why would someone choose to give over the internet?” I know it’s hard to believe, but at that time the idea of giving online was, for many non-profit leaders, just a fantasy.
And here we are, thirty years later, and we don’t even think about it anymore. Of course, your website accepts gifts online.
The same thing that happened thirty years ago, with non-profits shifting to accept donations online, is now happening with cryptocurrencies today.
According to the Chronicle of Philanthropy, the best guess is that only 500-1,000 charities in the U.S. have the ability to accept cryptocurrencies. But the potential is huge.
The top 100 cryptocurrencies have a reported market value of nearly $113 billion!
Nothing to sneeze at.
Now, perhaps you think of cryptocurrency as something nefarious or something only a small group of people know about… but you would be wrong. Cryptocurrency is here, it’s a legitimate currency, it’s growing, and non-profits are starting to wake up to it.
Here’s something that you should also know about these currencies: The people making gifts using cryptocurrencies are typically younger than the traditional donor. This was EXACTLY the case, when online giving starting happening in the 1990’s.
According to AFP Global, donors of cryptocurrency are typically male and more libertarian leaning… meaning they support causes that give people more freedom and fight oppression. They are people who are building the financial infrastructure of the future. And they are inherently passionate about innovative solutions that disrupt the status quo and put power back into the hands of ordinary individuals.
So, how are non-profits approaching this? One of our clients here at Veritus is treating cryptocurrency like stock. They receive it and sell it immediately as per the stock acceptance policies for their organization. But other organizations are actually holding onto it. For example, UNICEF receives, holds, and disburses cryptocurrency with its UNICEF CryptoFund.
This is actually pretty cool, because cryptocurrency is fully transparent. In other words, one day when everything is done through cryptocurrency, donors would be able to see exactly how their money is being used on making impact.
As a non-profit, here are some pros and cons you should consider:
- Being an early adopter allows you to connect with and engage with tech-savvy major donors, and you may be able to secure large gifts by offering this option.
- Cryptocurrency has value and is another type of asset that will become more and more popular for donors to give gifts.
- You must either have an infrastructure to process cryptocurrency gifts or use a third party to accept them for you.
- Donors who give cryptocurrency gifts often prefer that the organization hold it, rather than sell it off – because by holding it, the currency become more “legitimate” to the public.
- There is a risk. The valuation of cryptocurrency continues to be volatile.
Here’s what we recommend at Veritus:
- Do your research now! Learn what you can about how cryptocurrencies work and about the characteristics of crypto donors. You don’t need to be an expert, but you do need to have a strong foundational knowledge so you can speak about this to your donors and confidently secure gifts.
Set up meetings with your organizational leadership, including finance, to discuss cryptocurrency. Learn if you can accept it and, if not, what obstacles need to be addressed.
As part of the meetings, you’ll want to assess if accepting cryptocurrency is right for you. Many small non-profits are successfully accepting cryptocurrency already, so size shouldn’t be an issue. But if it’s a “not now” option for you, start putting the pieces together to move in that direction.
You should also decide on your protocols for these gifts. Will you treat them like stock, or will you keep the assets?
- Start talking to your donors about cryptocurrency. Get an idea of whether or not they would be interested in making gifts in this way. This can help build a case for leadership and give you some valuable information about what you should be considering.
- Set it up for your organization to accept it. This should be done sooner than later. It’s only going to continue to grow as a means for donors to give, and you don’t want to be left out.
I know you still may be skeptical and wondering if it’s worth putting any energy into this. Like I said at the beginning of this post, this was exactly what many non-profit leaders were saying thirty years ago about giving online.
This is going to be another way for your donors to give, so it’s imperative that, like some organizations already have, you get ready to start accepting cryptocurrency as a way for your donors to give. This is just another way to be donor-centered. (Tweet it!)
And if you want to read more about cryptocurrency and how non-profits are approaching this new frontier, check out some of these resources:
- “How Non-Profits are Navigating the Rise of Cryptocurrency Giving” – Devex
- “How to Get Ready to Accept Cyrptocurrency Gifts” – Chronicle of Philanthropy
- “Cryptocurrency Rules are a Work in Progress: Here’s What To Do For Now” – Chronicle of Philanthropy
- “The Downside of Crypto-Donations” – Coindesk
- “Top 10 Giant Non-Profits Growing with Cryptocurrency Donations” – Nonprofit Pro
- “Cryptocurrency Considerations for Nonprofits” – Capincrouse
- “5 Reasons Why Your Nonprofit Should Embrace Cryptocurrency” – NP Tech for Good
- “Bitcoin Donations Poised to Transform Nonprofits” – Forbes