Consider The Question
Nonprofits accepting Bitcoin is becoming more commonplace and, as cryptocurrency adoption continues to grow, we can only expect that trend to continue. If you’re thinking about adding crypto to the lineup, here’s what you need to know about non-profits and churches accepting Bitcoin.
Why Are Nonprofits Accepting Bitcoin?
Bitcoin is the largest of all the cryptocurrencies and it hit a record high in 2021, climbing to $66,000 per coin after barely staying above ten grand the year prior. It’s safe to say that BTC isn’t the only player in the market, but it is the biggest, and it’s the first cryptocurrency that comes to mind for most people.
So, the reason for nonprofits and churches accepting Bitcoin is simple: They want to tap into this enthusiastic and growing community. Most cryptocurrency supporters believe that crypto will become more widely used and more widely accepted as a “normal” currency in the coming years. Being able to make donations using their crypto is a step in that direction.
Aside from garnering the support of crypto advocates by adopting crypto, nonprofits accepting Bitcoin also open the doors to some smart financial positioning. For instance, imagine if someone had donated a couple Bitcoin to your church back when they were worth a mere few thousand dollars. In just a couple of years, your portfolio would have an astounding $130,000 sitting in it.
Major price hikes prove that the crypto market is highly volatile, but it also demonstrates how much potential exists. Non-profits accepting Bitcoin is great because it’s a zero-risk pursuit. In other words, since you’re not putting any money into the market, you can really only realize gains–potentially hundreds of thousands of dollars in gains in the coming years.
In short, the main reason for churches accepting Bitcoin is summed up in one word: Opportunity. However, that’s not the full story. Let’s explore what else you need to consider before accepting Bitcoin and other cryptos.
Should I Start Accepting Crypto Donations?
There are plenty of major nonprofits accepting Bitcoin, including Children International, Save The Children, and the Chicago Wish Foundation. These big charities are just a few in the long list of organizations and churches accepting Bitcoin today.
In their own words, Save The Children explains: “Donating Bitcoin and other cryptocurrency is one of the most tax-efficient ways to support your favorite cause. Adding this emerging holiday donation type is a one-step in learning more about how blockchain DeFi and DLT technologies can help us do more to reach the most marginalized children in the world.”
For most nonprofits, seeing the opportunity that cryptocurrency holds is not difficult, but implementing crypto donations isn’t so straightforward.
Consider The Regulatory Requirements
Cryptocurrency regulations are still very much in their infancy. As laws evolve every day regarding the purchase, collection, and holding of cryptocurrency, organizations that accept crypto donations will have to stay on top of reporting requirements. You may also need to quickly adapt if laws regarding crypto donations, disclosures, or other elements change.
For smaller nonprofits and churches accepting Bitcoin, the regulatory side of things can be completely off-putting. However, if you have the resources to consult a professional tax advisor, you can still pursue crypto donations in good faith. Those who are okay with the extra reporting may find that the benefits outweigh the complexity.
Remember That Crypto Isn’t Standard (Yet)
If you added crypto donations to your website right now, you’d be considered an early adopter. This in itself has benefits, like allowing you to gain exposure in the enthusiastic crypto communities, but that alone isn’t enough to justify adding crypto donations if your charity is struggling to grow.
Crypto donations are not yet the standard, which is why you shouldn’t dedicate resources to accepting crypto if your nonprofit still has room to improve in other key areas. For instance, if your nonprofit’s website simply isn’t up-to-par, like maybe you’re using clunky web forms, it’s better to focus on upgrading the donor experience first. Consider our software if you need a branded solution.
Likewise, remember that adding a new donation method isn’t enough to attract new donations. Through our coaching programs, we teach organizations about the importance of donor outreach, marketing, and having a growth plan. If you aren’t finished with those fundamentals yet, you shouldn’t try to add crypto right now.
Tips for Accepting Crypto Donations
Do you think that accepting crypto makes sense for your organization? Here are some tips to help you along the way.
Choose The Right Donation Method
If you can accept Bitcoin, then you can accept just about any other cryptocurrency out there because they can all be stored in the same wallet and processed by the same software. Generally, you’ll need to set up a secure wallet and then connect it to a specialized cryptoprocessor, like The Giving Block.
The wallet holds your crypto, but the processor is what facilitates donors in transferring crypto from their wallet to yours. If you wanted to, you could skip a processor altogether and just share your wallet address, allowing donors to send crypto directly to you. However, this requires people to have the crypto in their wallet, preventing them from donating through exchanges, and it’s considered more technical than using a form.
Don’t Cash Out Your Crypto
By far, one of the biggest benefits of accepting crypto is that it holds limitless potential for growth, especially if you’re dealing with major crypto like ETH. Donors will send all sorts of different cryptocurrencies to your wallet, and there may be some that make sense to sell, but the biggest mistake you can make is “cashing out” everything as it comes in.
If you plan on selling all crypto as soon as you get it, you’re not going to benefit from crypto donations. Instead, consult a professional to help you come up with a strategy for determining when to sell each crypto, how much to keep, and whether you should re-invest the gains for sustainable income or transfer them to your bank to cover expenses.
Continue to Focus on Growth
Getting on the cutting-edge of technology and new trends is very exciting, but it’s not enough in itself. No matter how successful your nonprofit is when it comes to crypto donations, it’s important that you continue to focus on growth. That means setting long-term goals, investing in donor outreach, and continuing to adapt as the market throws new things your way.
If you’re looking for the right partners to help support you through these changing times, Donorwerx can help. With our donation software and coaching programs, we’ve helped countless organizations achieve sustainable growth through a combination of outreach, marketing, and branding. Ready to learn more? Get started today!