Crypto Donations Top Estimated $2 Billion

More than half of 100 largest US charities now accept crypto

After a year of continued growth in crypto investments, last month 11 new bitcoin exchange-traded funds (EFTs) were approved by the Securities and Exchange Commission (SEC). Proponents say the market for blockchain-derived currencies is on the cusp of a breakout that nonprofit leaders can ill afford to miss.

Prognostications are spelled out by leaders of crypto donation platform The Giving Block in a 56-page monograph titled 2024 Annual Report: Crypto Philanthropy Data, Trends & Predictions.

Cryptocurrency markets have been on a wild ride these past few years, the low point of which might have been the November 2022 collapse of convicted fraudster Sam Bankman-Fried’s crypto exchange platform FTX that crashed crypto markets globally.

“In 2023 the crypto industry cleaned house as bad actors were swept away and new growth blossomed in their place, Coinbase’s stock ($COIN) grew over 400%, and Bitcoin’s price rose more than 150%,” wrote The Giving Block co-founders Pat Duffy and Alex Wilson. “With more investors than ever, prices surging upward, the Bitcoin halving on the horizon, and cryptocurrency exposure now accessible through the stock exchange, the nonprofit industry is poised for the most promising crypto fundraising opportunity in history.”

More than half (56%) of the 100 largest U.S. charities now accept cryptocurrency. The running total of crypto donations starting in 2018 exceeded $2 billion at the beginning of this year, according to the authors. There’s an estimated 580 million crypto investors worldwide as of last month and high-income earners disproportionately represented among them. Fundraisers and nonprofits owe it to their organizations and their missions to make it as easy as possible for these would-be donors to engage in crypto giving. Not doing so risks losing the next generation of major gift donors, the authors warned.

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Clarity from the Internal Revenue Service (IRS) should help. According to the authors, “the IRS has continued to uphold that crypto donations will be treated like other donations of appreciated assets in the U.S. (like stocks), meaning U.S. donors will be relieved of all capital gains tax liability for appreciated crypto they donate to registered 501c3 charities.”

The same considerations apply to other digital assets, such as non-fungible tokens (NFTs). Charities can receive these digital assets as donations and can even mint and auction off their own charitable NFTs, whose visual appeal offers a powerful tool for getting donors excited about supporting causes they care about. To take advantage of these opportunities, the authors offer the following recommendations:

• Make it easy to find: The largest driver of crypto giving comes from ensuring the option is regularly seen and easy to spot. This can be done through a button displayed prominently on a nonprofit’s website and by clearly displaying the option at events, in fundraising appeals and on social media.
• Make it easy to give: This can be done through online donation forms optimized for crypto giving similar to the forms nonprofits rely on to receive stocks, donor-advised fund (DAF) grants, and bank transfers. Nonprofits providing user-friendly crypto experiences will invariably see the best results. Conversely, those with non-mobile-friendly websites and non-user-friendly digital giving platforms will continue to suffer poor search engine results and poor conversion and retention rates.
• Make it easy to accept: Automation and regulatory clarity make it easier than ever for nonprofits to accept crypto. However, the same legacy issues that led some nonprofits in the past to insist on accepting stock donations manually, selling them manually, and reporting them into their donor management systems manually can be a hindrance to setting up and marketing a crypto giving option. Nonprofits must make a point of adapting.

“The future of crypto philanthropy is once again looking bright, and now more than ever nonprofits can begin setting themselves up for success by preparing for the crypto bull market, improving their website navigation and user experience, upgrading to the latest donation forms and prepping their donor messaging,” according to the authors.

This article was originally published by The NonProfit Times.

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