It shouldn’t come as any surprise that nonprofits would start embracing cryptocurrency as an acceptable form of donation.
The transparency, popularity and ease of sharing represented by cryptocurrencies makes them an obvious choice for inclusion by charity organizations, which often need every dollar they can find.
Yet it wasn’t until this year that many nonprofits began to accept cryptocurrencies, driven by the upswell in investment that have made 2021 the year institutions across the world brought digital currencies into the mainstream.
While it’s true that The United Way started accepting Bitcoin donations back in 2014, it’s since become easier for smaller organizations to deal with the extra complications involved with crypto (The United Way, as one of the largest privately held nonprofits in the world, could make the change early).
Since then, nonprofits big and small have made the leap into the world of crypto. The organization founded by world-famous Pakistani activist and Nobel laureate Malala Yousafzai, Malala Fund, accepts cryptocurrency donations. So do the more than 200 nonprofits that have signed up for The Giving Block, which is dedicated to “taking crypto mainstream through charitable giving.”
There are several good reasons for nonprofits to embrace crypto. For starters, there are tax incentives for donors who can give appreciated assets straight to nonprofits instead of cashing out those assets first. Transferring cryptocurrencies directly to a charity means the giver pays no capital gains tax, allowing them to write off the total amount donated.
That’s part of why the trend has arrived in local areas this year as well. In October 2021, Back Bay church in St Martin, Mississippi, became what is likely the first Southern Baptist church to allow cryptocurrency as a giving method.
Also in October, the Nicklaus Children’s Hospital Foundation became the first nonprofit and first healthcare foundation in South Florida to begin accepting cryptocurrency donations.
“By accepting cryptocurrencies, Nicklaus Children’s is offering supporters with cryptocurrency portfolios the ability to support the organization in a tax-efficient way,” according to the press release.
It’s not just about tax efficiency, however. As with so many other industries embracing crypto, it’s also about transparency.
Nonprofits don’t just need donations — they need partnerships they can trust, and that’s something that the blockchain can provide.
As Craig Kielburger, the founder of WE Charity, wrote in an article titled “Blockchain and child labour,” the blockchain empowers nonprofits and consumers to make smart choices about who they partner with and where they spend their money.
In fact, Kielburger believes that blockchain could help end child labour by holding companies accountable for how their products are made.
“Simply put, blockchain is a tamper-proof database. It creates a digital ledger of every transaction that is accessible to everyone, but isn’t controlled by any one company,” Kielburger wrote. “Raw materials—from the cotton in your T-shirts to the tungsten in your electronics—get a code, like a digital passport. As the materials move along the supply chain, they automatically accrue stamps in their passport, allowing everyone to track each step in the process. The result: there’s nowhere to hide shady business practices.”
As with so many other industries, it’s likely that the changes coming to the nonprofit sector through crypto and blockchain are only just beginning.
One thing is certain: Nonprofits are starting to embrace cryptocurrency as an essential part of their future.