Bitcoin Endowment That Has the Potential to Grow
Are cryptocurrencies the future of finance, even for churches and nonprofits? Digital money has been around for quite a few years now, but only recently, in 2020, did more groups and Bitcoin Endowment companies consider cryptocurrencies such as Bitcoin or Ethereum as an avenue for growing assets and donations.
Nowadays, it is possible for blockchain-based applications to earn passive returns. Once an investor buys crypto as funding, depending on the market value, the savings account may grow. These kinds of disruptive innovations are becoming more mainstream, even with nonprofits looking for donors who want to fund their outreach programs. Let’s look at some recent findings on bitcoin, cryptocurrency, its growth, and its impact on nonprofits.
Bitcoin Endowment Nontraditional Investors and Endowment
Well-known entrepreneurs such as Twitter creator Jack Dorsey and musician Jay Z are just some of the top players who have created an endowment to fund crypto development in Africa and India. It was reported that they put $23.6 million worth of bitcoin (500 Bitcoin at the time of the report) into the endowment, which is called ₿trust.
It’s worth thinking about these nontraditional types of investors. Churches and pastors that do not expand their horizons and ways of thinking might miss out on donors in the crypto space who have the capacity and willingness to give, but lack the avenue to do so.
No matter where you are on your donor journey, we at DonorWerx have all the digital tools and resources to help you reach your destination. (See our recent blog posts on fundraising technologies and donor personalities.)
Consider Crypto a New Way to Get Gifts
Cryptocurrencies and crypto-related investments are something to consider when fundraising and looking for potential donors. But how can your nonprofit benefit from this “trend” wisely?
Remember that churches are not the only groups accepting crypto as gifts. Universities and educational centers are also looking at crypto for innovation. One example is The University of Pennsylvania, which recently announced that they had received $5 million worth of Bitcoin from an anonymous donor. The money was given to the Stevens Center for Innovation in Finance at the Wharton School.
But, as the New York Times reminded its readers in that article, cryptocurrencies are still more volatile than stocks. There are still increased risks, and a cryptocurrency donation worth $5 million today may be only $3 million next week. On the other hand, its market value could jump to as much as $7 million.
That said, cryptocurrency gifts should still be considered because of two major reasons:
- These type of monetary assets donated to charity may be tax deductible.
- Blockchain technology makes international financial transactions fast and transparent.
Just a few years ago, most churches—as with most education centers—had no way to accept virtual currency. And yet, as the cryptocurrency market grows, more donors are offering their support in crypto. Churches and nonprofits have to have the infrastructure in place to accept virtual currency and process these donations easily.
Keep in mind that transferring cryptocurrency involves a few more steps than just writing a check. You need a way to receive the digital gift—essentially, a digital wallet to store your crypto. Then, you need a team or individuals to manage and monitor it.
What Pastors Should Remember When Asking for Crypto Donations
All church leaders and pastors must use wisdom and caution when deciding to embark on new fundraising opportunities.
A digital wallet is a safe space between the donor and the church. It allows the donor to send cryptocurrency directly to the church by transferring it from the donor’s account to the charity’s digital wallet. But this also comes with security issues and other things to consider. Make sure that your church pastors and financial managers have done their research before taking on the important task of handling crypto donations.
UNICEF has also backed crypto as a way to accept donations. Tom Pageler, chief executive of Prime Trust, a company that focuses on digital assets, has worked directly with crypto donors who helped fund some UNICEF programs.
He believes that the ease of transactions and the elimination of wire fees make it attractive for both donors and charities. “You can have the local office in the region convert the crypto into the local currency, and now you don’t have to pay the wire fees on the transfers,” he said in that NY Times report.
How DonorWerx Can Help
The evolution of cryptocurrencies is something that your church should definitely research and consider when looking for new funding sources and donors. Because it is relatively new, however, decentralized currency is still not globally regulated. Use it with caution and always seek the counsel of trusted financial managers who understand the cryptocurrency space, and its investors.
A partner like DonorWerx can help you stay focused on your fundraising goals, giving you key insights to your donors and their needs. Call us today to find out how to reach your mission goals effectively—whether with traditional or modern fundraising ideas.