Since the last three years, a rising number of nonprofit organizations have started to accept cryptocurrency as donations. Moreover, the covid-19 pandemic outbreak has pushed this trend more than ever before.
The prevention measures for the covid-19 pandemic started to accelerate during March 2020. It resulted in economic turmoil and business closures for many. Nonprofits and businesses alike faced huge losses in revenue after the coronavirus took hold.
Covid-19 pandemic has truly been a major catalyst for nonprofits accepting cryptocurrency in the last six months or so, as a lot of them are looking forward to diverse ways of offsetting lost revenue. They are additionally looking forward to diversifying their revenue into innovative things like cryptocurrency.
Various nonprofits originally started accepting blockchain utility tokens amid the euphoric Bull market of Crypto in 2017, although bolstered by the covid-19 pandemic. Among them l, many were essentially looking forward to ways for offsetting their capital gains and taxes, particularly within the United States.
Among those ways, one was to donate cryptocurrency to charity, but most of the nonprofit had no idea regarding how to accept cryptocurrency.
To solve this issue, various resources were built and combined for a convenient Crypto giving on-ramp. The best thing about cryptocurrency donations has been that it is mostly new, so it is not cannibalizing any other or existing form of donations. When it comes to revenue, it is a new stream.
Nonprofits are turning to Crypto increasingly as a new source of revenue due to the increase of other cryptocurrency and Bitcoin’s price. Other than the revenue potential, many nonprofits are taking a step forward by examining the ways Crypto can provide stability, offer tax benefits and become more transparent to their donors. Take a glance at some of the reasons why nonprofits love Crypto.
We have witnessed millions of dollars, in Crypto, donated to nonprofits over the last few years. Why? It is due to the massive tax incentive provided to donors who can offer appreciated assets immediately, other than cashing out initially. Similar to stock donations, cryptocurrency transfers to a nonprofit makes sure that you need not pay any capital gains tax and write off the entire amount of Crypto donation. If you sell Bitcoin and donate the cash proceeds, the amount of donation happens to be smaller along with the tax write off.
Also Read: Impact of Covid-19 Pandemic On Stock Markets
Accepting donations in the form of cryptocurrency is similar to a marketing opportunity like a fundraising tool. Donations in the form of Crypto create viral content as compared to regular donations. It might come as a surprise. However, approximately 50 million crypto users are there globally, and this number is increasing day by day.
Ad grants programs are one way by which nonprofits have engaged themselves in the community of trip to currency. Chosen cryptocurrency-friendly nonprofits get more than $10000 of free advertisements each month. You can think of it as equivalent to Google Ad grants, however, for another tech-savvy audience.
Other than Ethereum and Bitcoin, nonprofits are utilizing stablecoins for minimizing volatility. Stablecoins can be considered as the new class of cryptocurrency which aim to provide price stability by pegging themselves to Fiat money; exchange-traded commodities like industrial metals or precious metals and cryptocurrency. It provides users with many of the advantages of digital currency without the fluctuations in price.
Recent reports revealed that 18% of millennials are the owners of Bitcoin. Few other surveys have shown that 43% millennials consider investing in cryptocurrency exchanges other than stock exchanges. On the other hand, Google searches for the word Bitcoin is more than any celebrity or sportsperson. With the growing trend of cryptocurrency investing, the Crypto donation trend soon will also witness growth.
The nature of significant public blockchain, like ethereum and Bitcoin, is their transparency. Cryptos are the most transparent process of exchanging importance and value ever created. Even the DEA and FBI have revealed that they want more criminals to use cryptocurrency as they are pretty much easier to track. You can easily view the whole Bitcoin or ethereum blockchain back to the initial ethereum and Bitcoin transaction.
Donations in the form of cryptocurrency are turning out to be increasingly popular. Donors, who have cryptocurrencies, are readily shifting their support to nonprofit businesses. Especially, those who provide the ability to donate their Crypto directly. Moreover, with every uptick in the dimension of the user base, more nonprofit businesses are interested in fundraising Crypto. Similar to IoTs and AI, Crypto has turned out to become one of the best innovative technologies. It is one that provides nonprofits with a competitive edge.