February 5, 2023

Cryptocurrency and philanthropy: five reasons why nonprofit organizations love cryptocurrency

Charity improves the lives of others and at the same time gives meaning and significance to your own of life. In today's competitive climatecharity organizations have a hard time. For example, according to the National Center for Charity Statistics, more than 1.5 million non-profit organizations are registered in the United States. In order to survive and be heard, they have to fight for human hearts and wallets.

Speaking about cryptocurrency, people usually don’t think aboutphilanthropy: charitable donations are rare. However, the vector of “cryptocurrencies for the benefit” caused positive and fruitful changes in fundraising. Cryptocurrency has become an important factor in philanthropy.

New technologies and behaviors have created numerous opportunities for good deeds. It remains only to use them!

Due to rising prices of Bitcoin and othersNonprofit organizations are increasingly turning to cryptocurrency as a new source of income. But, in addition to potential income, some non-profit organizations go further and look for ways to become more transparent, ensure stability and provide their donors with tax benefits.

1. Cryptocurrency fundraising

Over the past few years, we have observed howNon-profit organizations have donated hundreds of millions of dollars in cryptocurrency. Why? Due to the strong tax motivation offered to donors who can transfer assets that have risen in value directly, instead of cashing them out first. As in the case of a donation of shares, when transferring a non-profit cryptocurrency organization, you do not need to pay a capital gains tax and you can write off the entire amount of the cryptocurrency donation. When someone sells bitcoins and then donates cash proceeds, the amount of the donation is less and, as a result, the tax amount written off is less.

2. Marketing and awareness

Accepting cryptocurrency donations is notjust a fundraising tool, but also a marketing opportunity. Cryptocurrency donations create viral content in a way that traditional donations do not. Perhaps this will surprise someone, but in the world there are 50 million cryptocurrency users, and this number is growing. When Robinhood, a popular stock trading app among millennials, began offering cryptocurrency trading, it attracted millions of new users, and even had to create a registration queue due to excessive demand. On large cryptocurrency exchanges, tens of thousands of new users continue to register daily.

Nonprofit organizations managed to engageThe cryptocurrency community, among other things, thanks to The Giving Block's Brave Ad Grants program, a startup made up of cryptocurrency pioneers and activists. Select non-profit cryptocurrency friendly organizations such as Code to Inspire and Human Rights Foundation receive monthly $ 10,000+ free advertising in the Brave browser. This is a kind of analogue of Google Ad Grants, only for a more technically savvy audience.

3. Millennials

A recent study found that 18%Millennials own bitcoins. A survey conducted by eToro showed that 43% of millennials trust crypto exchanges more than stock ones. The term “Bitcoin” appears more often in a Google search than Kim Kardashian or Justin Bieber. With the growth of the cryptocurrency investment trend, cryptocurrency donations will also grow.

4. Stablecoins

Besides Bitcoin and Ethereum, nonprofitsorganizations use stablecoins to minimize volatility. Stablecoins are a new class of cryptocurrencies that try to offer price stability by linking to another cryptocurrency, fiat money or exchange goods (such as precious or industrial metals). Thus, users get the benefits of digital currencies without price fluctuations.

5. Transparency

Characteristic property of the largest publicblockchains, such as Bitcoin and Ethereum, is their transparency. Cryptocurrencies are the most transparent of all the ever existing ways of exchanging value. Even the FBI and the Drug Enforcement Administration said they would like criminals to use cryptocurrencies more often, as they are much easier to track. Anyone can view the entire history of the Bitcoin or Ethereum blockchain from the very first transaction.

In conclusion

Cryptocurrency donations are getting moreSpread. Donors who own cryptocurrencies quickly switch their support to those non-profit organizations that offer the opportunity to directly donate cryptocurrency. As was the case with the adoption of credit cards, with each jump in the size of the user base, more and more non-profit organizations are thinking about raising funds in cryptocurrencies. Like artificial intelligence and the Internet of things, cryptocurrencies quickly became one of the leading innovative technologies that give non-profit organizations a competitive advantage.

Charities are not famous for theirtechnical savvy, and the barriers to entry into the blockchain and cryptocurrency are now high. Trustees of charitable organizations also usually have a low risk appetite, and blockchain and cryptocurrencies may be perceived as untested technologies.