How It Works
Just a few years ago, the concept of crypto donations was entirely foreign to most organizations. Now, as cryptocurrency continues to gain more traction, some major non-profits are beginning to accept them. The question is, is it just a gimmick? Here’s a closer look at the benefits of crypto donations and why you should consider taking them.
Crypto Donations Offer Tax Advantages
For some time, many people asserted that crypto wasn’t taxable, but that’s certainly not the case these days. While regulations are still being clarified and expanded upon as crypto becomes more widely used, it’s important to note that crypto investments are subject to capital gains tax. With that said, donating crypto offers some tax advantages over other assets.
Crypto investors who hold on to their cryptocurrency for a year or more before donating it might be able to avoid capital gains tax that they would incur if they sold the asset and donated the cash. This can lead to the donation being up to 20% bigger. Plus, those who itemize deductions can often claim a charitable deduction for the cash value of the cryptocurrency.
These potential tax advantages are one of the biggest benefits of crypto donations, and it’s certainly something that high-profile givers will want to tap into. This is something we talk about all the time at Donorwerx: Mobilizing your high-profile donors. Crypto isn’t the only way to do it, of course, but it is a step in the right direction.
Tap Into a Large Community of Supporters
If you’ve done any research on cryptocurrency, you’re well aware that it comes with enthusiastic communities of supporters. That community might just supercharge your nonprofit’s recognition, if you play your cards right.
Many cryptocurrency users believe that it’s going to become the new standard currency in a matter of years. Others believe it’s a great complement to our digital economy. In any case, these people are excited to pursue opportunities that allow them to use crypto like it’s supposed to be used (i.e., as a currency).
While crypto is still hard to spend at most stores, non-profits that accept crypto donations can tap into the enthusiasm and gain new supporters as a result. In fact, multiple forums exist where cryptocurrency users share new non-profits they’ve discovered that accept crypto donations.
Of course, merely accepting crypto donations on its own isn’t going to lead to more donations, but it is a step in the right direction. In tandem with outreach efforts, like those we teach in our coaching programs, accepting crypto can help your organization grow.
Future-Proof Your Non-Profit
A couple of decades ago, non-profits were adding online portals to accept credit and debit card donations, and they were considered to be on the “cutting-edge.” In doing so, these charities were able to collect donations far and wide in a convenient, self-managed way that didn’t require any representative to answer phone calls or handle outreach.
As a result of being early adopters, those organizations gained massive support and received more donations than they would have without the online portal. Now, every non-profit accepts donations online, and we’ve helped them do so with our donation software. First it was the addition of a website, later an in-person kiosk, and soon text-based giving. But, it’s clear that crypto is the next step.
So, one of the benefits of crypto donations is that they can help you future-proof your non-profit by putting you ahead of the rising trend. As a result, your organization has the chance to gain more donations, new supporters, and additional traction that it otherwise might not have.
Take Possession of Desirable Assets
In 2021, Bitcoin made headlines by reaching an all-time high of $65,000 per BTC. In 2019, it was worth less than $4,000. Other cryptocurrencies have also climbed from mere pennies to thousands of dollars each in just a few years span, and it’s not going to stop anytime soon.
There are countless cryptocurrencies out there, and they won’t all be worth a lot of money, but those with a strong community and good principles behind them are sure to gain traction as the market continues to decide which cryptocurrencies are going to be the top contenders. For instance, ETH (currently the second most valuable crypto) is being threatened by big projects like HEX that promise to bring down network fees.
In short, you could take all of this to mean that cryptocurrency is a volatile market, and it is. But, it also holds incredible potential. For a non-profit to accept cryptocurrency, it means you’re going to end up with many different coins that could potentially skyrocket in the future. This makes a diversified crypto portfolio one of the biggest assets, and accepting crypto donations allows you to acquire it for no cost and, therefore, no risk.
We might be great at coaching you on how to get more donations, but we’re in no place to give you advice on how to handle your crypto portfolio. So, if you go this route, ask an investment advisor or other expert to help you figure out what to keep, what to sell, and where to reinvest when you can. It might not be easy to do, but taking possession of crypto now will certainly payoff with the right moves.
Accepting Crypto is Getting Easier
While it’s never a wise move to pursue something just because you can, the fact that accepting crypto donations is getting easier by the day surely means there is less risk and complexity associated with making the decision. Thanks to intuitive software from specialized crypto processors like The Giving Block, adding a crypto donation form to your website is fairly simple.
With some basic tech knowledge, you can add a form to your website and start taking crypto payments in no time. Of course, you’ll still want to do your research regarding regulations, reporting, and the best way to store your crypto securely. Still, even a tech-savvy volunteer could get your non-profit up-and-running with crypto donations in a matter of hours.
Aside from making it less resource-intensive to accept crypto donations, this point is also important because it means that many more organizations are going to start accepting crypto as the barrier continues to drop. In other words, crypto donations are on the cusp of becoming the new standard, so it’s an option that consumers will begin expecting.
How Donorwerx Can Help
The benefits of crypto donations are plentiful for both donor and charity, and with the process of accepting crypto donations becoming easier than ever before, there are few reasons not to add crypto donations to your website. With a bit of research into the regulations surrounding crypto, your organization could be well on its way to building its crypto portfolio, and that’s a big deal.
Of course, merely adding a crypto donation form isn’t enough to start seeing donations. In addition to a new donation method, you need to invest in the right outreach campaigns to get your donors excited, familiarized, and ready to contribute. If you need help aligning your supporters with your goals, Donorwerx coaching can help.
At Donorwerx, we provide donation software and coaching to non-profit leaders to help them grow quickly and sustainably. Ready to learn more? Get started today!