Over the past five years, cryptocurrencies like Bitcoin have gradually made their way into the philanthropy space. Ever since the Pineapple Fund granted roughly $55 million in Bitcoin to charities in 2017, more nonprofits have come to accept cryptocurrency donations. Today, Crypto Philanthropy has evolved into a fully-fledged nonprofit revenue stream with hundreds of millions of dollars donated per year.
This latest trend in giving is a novel and innovative way for nonprofits to fundraise, especially those interested in connecting with Millennial and Gen Z donors. As organizations look for new fundraising approaches, it seems that accepting cryptocurrency donations will soon become the rule, not the exception, for the entire charitable sector.
WHAT IS CRYPTOCURRENCY FUNDRAISING?
Cryptocurrency fundraising is the practice of cultivating donors who give in the form of virtual or crypto currencies. While Bitcoin is the most well-known type of cryptocurrency, there are many kinds of crypto and many kinds of crypto holders who are interested in using their tokens for social good.
Though most crypto-enabled nonprofits devise their own fundraising messages, there are also dedicated giving days in the crypto community, such as Crypto Giving Tuesday and NFTuesday, which happen toward the end of the calendar year and raise millions of dollars for charities worldwide. As time goes on these days will likely increase in popularity and remain big opportunities to connect with the cryptocurrency community.
BENEFITS TO ACCEPTING CRYPTO
There are a wide variety of benefits to accepting donations in cryptocurrency. However, there are a few main ways nonprofits may experience a difference once they begin accepting crypto:
• Gaining access to a large group of potential donors, as there are currently 295 million crypto users worldwide, according to research by crypto.com
• Gaining access to a new generation of donors, since Millennials and Gen Z make up the majority of cryptocurrency holders
• Being able to diversify revenue streams
• Reaching potential donors located all over the world
Accepting cryptocurrency unlocks a new, global source of revenue for nonprofits. Since crypto is digital, nonprofits are able to tap into donors all over the world, instantly. As cryptocurrency adoption grows, in-person fundraising events such as galas may no longer hold the same level of importance, because there will be easier and quicker ways to raise the necessary funds for a specific project or even for the long term.
THE OPPORTUNITY FOR NONPROFITS
Access to potential donors and new revenue sources isn’t just an abstract concept. The fact is that cryptocurrency donors are making a noticeable difference on the bottom line. Last year, The Giving Block processed nearly $70 million dollars in crypto donations for nonprofits using the platform.
Millennials, who are the biggest generational group of crypto holders, are also a highly active demographic for charitable giving:
• 84% of Millennials donate to charity
• 40% of Millennials donors participate in a monthly giving program
• 46% donate to crowdfunding campaigns
Crypto donors have also been found by Fidelity Charitable to be more generous, on average, than their cash-giving counterparts. In 2021, the average crypto donation on The Giving Block cryptocurrency fundraising platform was over $10,000, compared to the average online cash donation of $128.
Accepting crypto donations also unlocks many opportunities for nonprofits to fundraise in unique ways. NFTs (aka non-fungible tokens) have increased in popularity and a new type of charitable giving has been created in which creators sell their NFTs, then donate the proceeds to charity.
Decentralized finance (DeFi) platforms have also begun to integrate donation features. These platforms provide yet another means of charitable giving, supporting the crypto community’s interest in social good.
HOW TO ACCEPT CRYPTOCURRENCY DONATIONS
Once nonprofits decide to begin accepting cryptocurrency donations, it’s relatively easy to set up the means to do so. All nonprofits need is a digital platform they can direct donors to, the same way donors are directed to donate online in government-issued currencies.
Typically nonprofits enable this digital crypto donation platform through a dedicated solution provider. Cryptocurrency fundraising platforms such as The Giving Block provide nonprofits the ability to accept crypto and either convert it immediately into cash, or hold onto it for the long term. These crypto fundraising platforms also support different kinds of cryptocurrencies, not just bitcoin, which provides further access to a wide range of crypto donors and increases gift opportunities.
Crypto fundraising platforms also help nonprofits create their own digital wallets. When cryptocurrency is donated, blockchain technology allows the amount to be transferred from the donor’s digital wallet to the organization’s wallet in a quick and secure transaction.
Each cryptocurrency transaction is permanently recorded on a blockchain ledger. These ledgers are public, open-source, and virtually impossible to tamper with, so there will always be an immutable record of all the cryptocurrency donations to crypto-enabled nonprofit organizations.
CRYPTO PHILANTHROPY IS HERE TO STAY
Crypto philanthropy holds a lot of promise for the long term and there are many indicators that crypto in general is here to stay. The possibilities of nonprofit fundraising are endless as more and more people begin to recognize the potential for crypto to make an impact in communities around the world.
Given the rise of this trend, it’s important for nonprofits to consider asking for donations in cryptocurrency and make these donations a part of their overall fundraising strategy–not just for this year, but well into the future. Crypto holders are often interested in social good, and donating to nonprofits is the perfect way to take actionable steps toward a better future.
Information for this article was provided by The Giving Block. Learn more at thegivingblock.com.