Post by: Bitcoin on Oct 25, 2022, 11:17 am
Cryptocurrency, no longer just used in niche internet circles, has made its way to the nonprofit sector. Donors across the world are willing and ready to make crypto donations to their preferred causes. For nonprofit organizations, it couldn’t be easier to accept crypto donations. Read on for an explanation on how donating crypto works and how your organization can accept crypto donations.
Bitcoin and other cryptocurrencies are digital cash for the internet. With cryptocurrency, you can send money over the internet directly and securely, without needing a credit card or bank. Instead of the credit card company or bank, thousands of networked computers process Bitcoin transactions and verify that they are legitimate (this network is known as a blockchain). Since 2009, millions of people have bought, sold, saved, invested, donated and shopped using this digital asset, just like they would with dollars or euros.
Benefits of accepting crypto for nonprofit organizations
Crypto donations bring a unique set of benefits to the world of nonprofits. Crypto users are younger, technically savvy, passionate and some have amassed a great deal of wealth from trading and holding cryptocurrencies.
Larger donations
The average crypto donation is 5x the amount of traditional donations. Based on a report by Blackbaud Institute, the average donation across all nonprofit subsectors was $813. During 2021, the average donation processed by BitPay was $4,620.
Tap into a younger, high earning donor
Based on previous BitPay and PYMNTS.com research, we know that the cryptocurrency owners are most likely to be millennials and high-income consumers earning over $100,000. At the same time, a 2018 study shows that millennials and gen z donors are the least likely to donate. Accepting crypto donations is an opportunity to increase donations from these younger, less giving groups.
Receive more donations, pay less fees
Accepting crypto donations as a nonprofit means that more of a donor's gift goes straight to the cause. If donated via a crypto payment processor, nonprofit organizations will typically pay a 1% fee on donations, less than half of that charged by credit card processors. Additionally, crypto donations are tax deductible similar to appreciated assets like stocks. Donors can donate crypto directly instead of selling assets and donating the sale price less taxes.
Large amounts of wealth in crypto
The total market capitalization of cryptocurrency has grown exponentially over the last few years, reaching a height of $2 trillion in 2021. While much of this is still seen as an investment, digitally-savvy consumers increasingly perceive cryptocurrency as a viable payment alternative for everyday transactions and donations.
How to accept crypto donations as a nonprofit organization
A nonprofit organization will typically have two ways to accept crypto donations:
- Hands-off: Leveraging a crypto payment processor like BitPay to accept crypto on its behalf and convert crypto donations to cash for a small fee.
- Hands-on: Receiving and holding cryptocurrency in a crypto wallet controlled by the organization.
- Third-party plugins and platforms: Plugins and integrations are an easy way to get started, especially if they integrate with your current nonprofit organization systems.
Leveraging a crypto payment processor
With a hands-off approach, companies leverage a crypto payment processor like BitPay to accept donations on their behalf and settle payment in fiat currency. All technical steps of creating a wallet are handled by the third party, as well as any compliance or regulation details. It is many times the fastest and easiest way to accept donations from a crypto wallet.
Pros
- Flexible integration with no code options
- Low effort for set up and maintain
- No crypto knowledge needed
- No wallet needed
- Next day settlement
- Receive fiat, crypto or mix of both
- Accept the most popular cryptocurrencies from the most popular wallets
Cons
- Pay a small processing fee on each donation
- Niche coins/tokens support limited by payment processor partner
Set up BitPay for crypto donations before Giving Tuesday
Receiving and holding crypto donations in a wallet
In a hands-on approach, the organization uses its own crypto wallet and handles all specifics relating to technical set up, payment processing and maintaining compliance. The hands-on approach entails much greater levels of exploration and work for an organization and its staff. With it, also comes having to take custody of crypto and dealing with price volatility. For this reason, most organizations choose to leverage a crypto payment processor like BitPay.
Pros
- Opportunity to hold crypto and have donations appreciate over time
- Ability to accept niche coins/tokens
Cons
- Crypto knowledge needed
- Medium-high effort needed for set up and maintenance
- Must create a crypto wallet for organization
- Must sell crypto on the open market to receive fiat
Third-party plugins and platforms
There are various third-party tools to help nonprofit organizations grow and manage donations, plus add the ability to accept crypto donations. Two popular options are GiveWP and Funraise. GiveWP is an ideal solution for organizations using a WordPress website. Funraise offers a whole range of nonprofit-focused solutions for building donor relations and accepting donations. GiveWP and Funraise each integrate with BitPay, giving your group flexible implementation options with the proven cryptocurrency acceptance capabilities provided by BitPay.
Pros
- All of the benefits provided by BitPay’s payment processing
- Broader suite of tools to track and manage donations (including crypto and cash donations)
Cons
- Pay a monthly/yearly use fee; pricing varies depending on chosen platform/plugin
FAQs about accepting crypto donations
Which cryptocurrencies can you accept as a nonprofit/charity?
BitPay supports the following cryptocurrencies for nonprofit organizations: BitPay supports charity giving with the following cryptocurrencies: Bitcoin (BTC), Bitcoin on the Lightning Network, Ethereum (ETH), Bitcoin Cash (BCH), Dogecoin (DOGE), Shiba Inu (SHIB), Litecoin (LTC), XRP (XRP), ApeCoin (APE), Dai (DAI), Binance USD (BUSD), USD Coin (USDC), Wrapped Bitcoin (WBTC), Pax Dollar (USDP), Gemini Dollar (GUSD) and Euro Coin (EUROC). These coins make up over 70% of the total value of cryptocurrencies worldwide.
From which wallets can nonprofits accept cryptocurrencies?
BitPay supports donations from over 100 of the most popular crypto wallets. Once registered as a BitPay nonprofit, your organization can accept donations from practically every wallet.
Ready to accept crypto donations? BitPay makes it easy!
Source: How to Accept Bitcoin Donations as a Nonprofit or Charity (https://bitpay.com/blog/how-to-accept-bitcoin-donations/)