Charities and nonprofit organizations always feel the pressure to stay up with the times. For example, following the events of 2020, many nonprofits found ways to take in digital donations, strengthened their online presence, and even created virtual volunteer opportunities.
Now, there’s another new trend for nonprofit organizations to follow. This latest trend may come as a bit of a surprise to many. There has been an increasing trend in crypto donations over the past year. Let’s take a closer look at what this means for nonprofits.
What Is Cryptocurrency?
Cryptocurrency uses digital files as a form of money. One reason cryptocurrencies have become so popular of late is likely due to the decentralized nature of the system. Additionally, those invested in the concept of cryptocurrency can mine for more, assuming they have the right computer parts to handle this process.
Why Donate Cryptocurrency?
One might wonder what benefits there may be in donating cryptocurrency instead of the many alternatives out there. Currently, cryptocurrency is classified as property as far as taxes are concerned, meaning that donors don’t face capital gains tax and instead can receive fair market value deductions.
Theoretically, donating cryptocurrency also benefits the nonprofit. Once again, the capital gains tax is bypassed on the nonprofit side. Furthermore, there is always the chance that the currency donated may fluctuate in value. This may result in decreased value – or a significant increase in value.
According to reports, nonprofits are facing record-breaking crypto donations. The Giving Block helped facilitate a little over two million dollars in crypto donations during December. This amount is a significant leap, even considering the increased donation rate with the holidays.
Who Accepts Cryptocurrency?
Organizations such as America’s Charities and The Giving Block have recently paved the way for many different nonprofits to benefit from crypto donations. These companies help nonprofits accept donations of this medium.
Other nonprofit organizations accepting cryptocurrency donations include Susan G. Komen, The Red Cross Foundation, GiveDirectly, and Save the Children. Taking it a step further, The Life You Can Save recently held a cryptocurrency fundraiser, making it one of the first of its kind. It is hard to say how many organizations will follow suit.