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Giving Tuesday: How Cryptocurrency Affects It

how cryptocurrency affects

Learn The Impacts

Giving Tuesday follows Thanksgiving, falling on either the last Tuesday of November or the first Tuesday of December each year. Giving Tuesday in 2021 set a record at $2.7 billion in donations, representing nine percent in growth from 2020. Even more intriguing is the interplay between Giving Tuesday and cryptocurrency, something nonprofits should prepare for in 2022.

Perhaps you’re confused about crypto donations or maybe you’re a self-proclaimed crypto expert. In either case, as nonprofit coaches and software providers, we’re excited to share how Giving Tuesday and cryptocurrency have the potential to bring in more donations. So, let’s dig into the details.

Introducing a New Asset Class (and Donation Vehicle)

In the fintech space, NFTs may have been the biggest trend to surface last year. The acronym stands for “non-fungible token,” and it’s a type of digital asset primarily used in the art and entertainment industries. However, an NFT can be created to contain virtually anything, and early adopters were quick to share these unique assets with charities.

If the value of an NFT seems novel to you, think again. While celebrities have certainly tapped into the novelty of NFTs, experts say these are real assets that have a major use case and a bright future ahead. In the meantime, people like Jack Dorsey (CEO of Block, Inc.) have entered this new space. Last year, Jack turned his first tweet into an NFT, which sold for $2.9 million. He turned around and donated that money to charity.

Jack’s tweet was purchased by Sina Estavi, Bridge Oracle CEO, who also purchased tweets from Elon Musk and others. He explained, ″[B]y bidding on Jack Dorsey’s first tweet of history and Elon Musk’s NFT, I wanted to emphasize the importance of NFTs on [the] future of crypto and tech sphere… I wanted to encourage involving charities in the crypto space.”

Needless to say, these headlines are just a couple as we witness the adoption of a new asset class and a new way to support charitable organizations. We’re seeing a strong shift towards these new types of donations, and that means it’s worthwhile to consider adding them alongside your current donation options.

While NFTs won’t replace any form of donation, accepting them can be a strategic move for your nonprofit. At DonorWERX, we’re experts in donor software and digital marketing for charities. If you need help planning for new types of donations and attracting donors who want to use them, ask our team of experts for advice.

Giving Tuesday and Cryptocurrency

The giving spirit extends beyond NFT holders, with many crypto “hodlers” coming together to donate millions in 2021. In response, many crypto wallets have integrated charity into the software. For instance, Gemini released its “Give Back with Crypto” feature in February 2021, allowing Gemini users to donate directly from their wallets to over 300 nonprofits.
This effort was made possible by The Giving Block, which is the leader in charitable cryptocurrency. The platform provides the technology necessary to connect crypto users with philanthropy efforts, giving users a seamless method to donate straight from their wallets to any number of charities.
We’ve covered The Giving Block in several posts where we discuss how to accept crypto donations at your organization and it’s easier than you may think. Our consultants can set you up with our powerful donation software so you can prepare to accept crypto donations and we can coach you in tapping into this enthusiastic community to help grow your organization.
It’s worth noting that, while some have been quick to pass crypto donations off as a novel trend, some organizations have been tapping into them long before they hit the mainstream. In 2014, United Way was one of the earliest and largest organizations to accept crypto donations, citing a growing, thriving, passionate community.
The value of Bitcoin at the time was just $770, but Bitcoin is now worth an astounding $43,000 each. Given the 55x gains, it’s no wonder that United Way continues to be a major proponent of crypto charity.

Should You Accept Crypto Donations?

As your organization prepares for another season of giving, it’s easy to find yourself lost in topics like Giving Tuesday and cryptocurrency.
Whether you decide to accept crypto donations is up to you. Just remember: Adding crypto donations to your website isn’t going to drive growth on its own. You have to combine your donation software with donor engagement initiatives, which is something our consultants can help you plan strategically.
Overall, there are plenty of benefits to accepting crypto donations and it’s becoming easier than ever to add this option. If you decide to pursue it, keep these considerations in mind:
  • Crypto taxes aren’t that confusing. Once you recognize that cryptocurrency is treated more like a donated stock than a donated dollar, you’ll see that tax reporting is not overly-complicated. While you should still consult a professional, don’t allow paperwork fears to hold you back.
  • Crypto offers tax benefits for donors. When donated in the form of crypto, the donor can deduct their donation at its appreciated value. Meanwhile, selling off and donating the dollar value is a taxable event and could result in a 20 percent smaller donation to your organization.
  • Crypto is a real asset class. Bitcoin is the best example of how holding on to crypto could be a wise move, especially for charities. If you’re going to accept crypto donations, you should aim to keep as much of it in a portfolio as you can rather than cashing out right away. The true value of crypto is its ability to appreciate, just like stock.
If you’re preparing for Giving Tuesday and cryptocurrency is on your mind, the next step should be consulting your resources and goals. Organizations that have some time set aside to implement a crypto donation method with some resources available to understand the implications of doing so probably will see little downside with pursuing crypto donations.
At the end of the day, accepting crypto is not a requirement right now, but it is a wise move. Our consultants can offer guidance with future-proofing your organization and expanding into the digital space so you can prepare for the inevitable uptick in crypto donations and NFTs in the near future.

How DonorWERX Can Help

Ultimately, once you begin to look at crypto—and NFTs—as an asset class rather than a novelty or “dollar alternative,” you’ll begin to realize the very real benefits of accepting crypto donations. Of course, it simply might now be the right time for your nonprofit to explore this new option.

At DonorWERX, we’ve helped countless organizations come up with a growth strategy based on donor engagement and a diverse selection of donation methods. From text and online giving to in-person kiosks and now crypto, we can help you make the right decisions for the growth of your organization.

Ready to learn more? Talk to our expert team members about what it takes to grow your organization through 2022 and beyond. We’ll provide techniques to help boost donor engagement, volunteerism and charitable giving while laying out a path to amplify your community impact. Schedule a free call today.

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