Nonprofits in the United States are in the midst of their yearly fundraising season, while Bitcoin (BTC) and Ethereum (ETH) values remain around record highs. Some humanitarian groups are trying to combine the two activities to help replenish funds depleted by the epidemic.
Nonprofits in the Pacific Northwest, including the Fred Hutchinson Cancer Research Center and Mary’s Place, which helps women and families who are homeless, have begun receiving bitcoin donations directly this autumn.
While it’s still early, the reaction has been muted: Fred Hutch has reported two bitcoin payments, while Mary’s Place is working out arrangements with a donor who is promising a “sizable match” — in conventional money — for crypto donations made during the forthcoming GivingTuesday event. Few NGOs in Washington are directly taking bitcoin at this time, according to 501 Commons, the organization that organizes GivingTuesday and GiveBIG events.
However, when cryptocurrencies become more widespread, things will change.
According to a new Pew Research Center poll, 86% of Americans have heard of cryptocurrency and 16 percent have traded or used it. Bitcoin and Ether, Ethereum’s money, are the most popular.
The crypto-philanthropy industry is also gaining traction. In 2018, two of the most prominent crypto-giving platforms, The Giving Block and Engiven, both launched, and a significant philanthropic news site published crypto how-to articles.
According to co-founder Pat Duffy, The Giving Block expects to allow bitcoin donations directly to charity totaling between $100 million and $150 million in three years. Contributions to donor-advised funds (DAFs), accounts from which people make philanthropic gifts, are also possible through the site. The largest DAF with which Duffy’s company collaborates is on set to receive $500 million in cryptocurrency in 2021.
According to The Associated Press, Fidelity Charitable, a top DAF provider, has received more than $274 million in bitcoin contributions so far this year, about four times more than in 2017.
Giving cryptocurrency has a lot of advantages. When a donor gives cryptocurrencies directly, they avoid paying the capital gains tax that would be due if they sold the currency first and then gave it away. They can still deduct charitable contributions from their taxes.
Linda Mitchell, a representative for Mary’s Place, said, “We want to provide our contributors alternatives that work for them.” “As bitcoin acceptance and conversion services become more prevalent, it becomes easier and safer for us to give this option for the community to support our work.”
The Giving Block system is used by Fred Hutch to manage donations, whereas Engiven is used by Mary’s Place.