By Natalie Rekstad

This past January I was in Davos, Switzerland for the World Economic Forum. While there, I was invited to a gathering called Women in Blockchain by a beloved client, Pencils of Promise. I was eager to join in to learn more about how cryptocurrency is impacting the world of philanthropy – and while I won’t pretend to know all I need to serve clients who seek this form of funding, I am wise enough to go to the right source to support them, so sought the folks who helped Pencils of Promise navigate this nascent landscape successfully. I am delighted to share with you Black Fox Philanthropy’s first guest bloggers, Alex Wilson and Pat Duffy, both co-founders of The Giving Block, to help shed light upon how your organization can prepare itself to leverage this currency.

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Why Cryptocurrency Donations Are Surging
COVID Has Created More Demand Than Ever For NGOs and Donors

By Alex Wilson and Pat Duffy, Co-Founders of The Giving Block

What do art, stocks and bitcoin all have in common? They all allow donors to reduce or eliminate their tax burden and donate more. 

During particularly uncertain times, people tend to hoard cash. So why not allow your donors an alternative and more tax-efficient way of giving? Most nonprofits already accept stock donations but more and more are beginning to accept cryptocurrency donations. As cryptocurrency markets have greatly outperformed the traditional stock market in 2020, we’re seeing a surge in tax-efficient cryptocurrency donations.

Comparison of stock market vs. Bitcoin price from: https://twitter.com/zackvoell/status/1265395387612958722/photo/1

Who Has Cryptocurrency?

About  70 million people have cryptocurrency globally, about half of which are based in the US. That number is likely even higher as cryptocurrency exchanges are seeing a record number of people pouring in, many even depositing exactly $1,200 as they look to find a hedge against inflation. 

So who are these people? They’re mostly younger users, millenial and Gen Z, and they’re also incredibly financially literate. Those that have appreciated crypto are smart enough to donate their crypto directly to a nonprofit to offset capital gains rather than sell it first and lose 20% or more to the IRS. 

In just the last two months during the COVID crisis, we’ve seen millions of dollars pour in from individuals and companies in the cryptocurrency industry. Unlike most industries right now, cryptocurrency is booming and companies, especially exchanges, are hiring. 

OK, but isn’t it complicated?

It used to be like trying to use the first computer, but there are companies out there bringing crypto mainstream. They may not be as user friendly as your everyday smartphone app yet, but they’re making huge strides in this area, especially as major companies like Facebook develop their own cryptocurrencies that will be integrated into their products for everyday use. Each day cryptocurrency is getting easier to use as adoption increases. Soon enough, you might be using cryptocurrency and not even realize it. 

For nonprofits looking to diversify their revenue, offset lost revenue from physical events, engage younger donors, and stand out from the crowd, accepting cryptocurrency donations is a way forward. Whether you are in charge of marketing, development, or fundraising, there has never been a better time to begin accepting cryptocurrency donations. 

Get your organization ready to accept the next wave of cryptocurrency donations now so that you aren’t left scrambling the next time a donor gives away $55 million dollars worth of cryptocurrency on Reddit.

Alex Wilson
Co-Founder, The Giving Block
https://www.linkedin.com/in/alexwilsontgb/

Pat Duffy, Co-Founder
The Giving Block
https://www.linkedin.com/in/thisispatduffy/