Why should you care about cryptocurrency if you’re a nonprofit professional?
by Elia Desruisseaux and Juliet MacDowell
How Nonprofits Can Capitalize on the Crypto Craze This Giving Tuesday
With the growing popularity of cryptocurrency, nonprofits have an opportunity to tap into this trend and attract donors who prefer to pay with digital currency. Here's how you can get your organization crypto-ready.
The Giving Boom: How Crypto Donations Are on the Rise
Last year's Giving Tuesday saw a whopping 34% increase in donations from the previous year, and experts predict an even bigger increase this year. Donors, particularly men between 26 and 45 years old working in white-collar professions, are increasingly interested in paying with cryptocurrency.
A Beginner's Guide to Blockchain: Understanding the Technology Behind Crypto
Blockchain is the technology that underpins cryptocurrency, and it can be used to securely record transactions that cannot be altered or tampered with. Learn the basics of blockchain to help you understand how it can benefit your nonprofit.
A blockchain is a sort of shared database for recording transactions, cryptographically chained so that the record cannot be altered at a later date and can be shared easily between parties. The blockchain can either be very open and decentralized (permissionless), or a more closed system with controlled access points. Below we have simplified the transaction into five steps: 1. Request transaction, 2. Transaction created, 3. Transaction broadcast, 4. Transaction verified & block created, and 5. Transaction completed.
As the inventor of Bitcoin, Satoshi Nakomoto, famously put it: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
The Top Payment Processors for Crypto Donations: Who to Consider
Accepting cryptocurrency donations is relatively simple with the help of payment processors or cryptocurrency-giving platforms. But with several options available, it's important to compare their startup and transaction fee costs to choose the best fit for your nonprofit.
Accepting cryptocurrency is relatively simple when you engage with the help of a payment processor or cryptocurrency-giving platform. These processors can accept, retain or sell your crypto donations for you. They will help you open an account to accept donations, convert them to cash, and even issue tax receipts. Among the best-known are: The Giving Block, Engiven, AidChain, Bitpay, and ENT Donate. Compare their startup and transaction fees costs, choose one, and start accepting cryptocurrency!
Navigating the Risks and Rewards of Crypto Donations: What You Need to Know
To date, cryptocurrencies are more volatile than stocks (except for penny stocks). This means that your $5M donation today can depreciate to $1M next week. This is why some organizations decide to cash in immediately. However, many cryptocurrency donors use this form of payment for ideological reasons (i.e. they want to grow the acceptance of blockchain). So, for large donations, it’s useful to talk with your donor and ask for a guarantee (some HINI donors will back up the donation with an alternative should the currency depreciate within a year).
Leading the Way: Save the Children and Other Nonprofits Accepting Cryptocurrency
Blockchain currency transactions are simple and have a high degree of transparency. There are no conversion rates. This is why organizations and businesses that are working internationally prefer to use blockchain technology. For example, Save the Children has been a first mover in this sphere and has accepted bitcoins since 2013.
Need more help getting started?
As the world becomes increasingly digitized, nonprofit organizations must adapt to new technologies to attract and retain donors. Cryptocurrency donations offer a unique opportunity to engage with a growing demographic of tech-savvy donors and increase your fundraising efforts. By partnering with us, we can help your nonprofit navigate the world of crypto donations and implement a payment processing solution that works best for you. Don't miss this chance to reach a wider audience and make a bigger impact. Contact us today to learn how we can help you get crypto-ready this Giving Tuesday and beyond.