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Bitcoin Donations Poised To Transform Nonprofits

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Giving Tuesday, which falls this year on December 3, is designated as the appointed day to give your time, dollars and now, cryptocurrency. This year, members of the cryptocurrency community are participating in #BitcoinTuesday, a coordinated effort led by The Giving Block to promote crypto giving on Giving Tuesday. The lead sponsor is Brave, along with Gemini, Splunk, Inca Digital Securities, Bottlepay, Cointracker, and Node40. It is anticipated that this initiative will lead to a groundswell of crypto donations.

Some of the largest nonprofit organizations in the world like United Way and The Red Cross accept bitcoin donations, and have been doing so for several years. Unicef recently announced its cryptocurrency fund, enabling the United Nations children’s agency to “receive, hold and disburse donations of ether and bitcoin,” according to the agency’s web site. In 2018, contributions to Fidelity Charitable in cryptocurrency totaled $30 million for 2018, and surpassed $100 million since the program’s inception in 2015. 

But what about other nonprofit organizations? According to the latest Global Trends in Giving Report (from 2018), only 2% of nonprofit organizations in the U.S., Canada and Europe accept crypto donations. That percentage is a little higher in Africa (5%) and Asia (4%).

With a market cap for the top 10 cryptocurrencies that exceeds $180 billion, one might wonder why more nonprofit organizations don’t diversify their appeal to attract crypto donations (especially from younger donors!). 

Pat Duffy, co-founder of The Giving Block, an organization that equips nonprofit organizations to accept several cryptocurrencies explains that the reason for this is two-fold. “First, to many nonprofit professionals, accepting cryptocurrency is daunting. They don’t know how to get started, and they’re afraid of doing it the wrong way. Second, they don’t recognize the tremendous potential which is in the hundreds of millions each year.” The Giving Block offers peace of mind to nonprofits that want to take advantage of the nascent asset class that only arrived with the introduction of bitcoin. 

Duffy started the organization with co-founder Alex Wilson, based on their belief that cryptocurrency donations could transform the world of philanthropy. "An entirely new donor demographic needs to be messaged effectively, and provided with ways to give that are the most tax incentivized, convenient, and exciting," said Wilson.

Duffy and Wilson are currently working with nearly 50 nonprofit organizations to help them connect with the crypto community; the demand for this niche service continues to grow. Guiding such well known nonprofits as Save the Children, Heifer International and No Kid Hungry, they are off to a good start. 

The Giving Block utilizes the Gemini cryptocurrency exchange to enable nonprofits to accept Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Zcash, and the Gemini Dollar. It offers participating nonprofits an “auto-sell” option through which cryptocurrency donations are converted to cash instantly upon receipt, eliminating the hassle of having to sell the crypto and concerns about volatility. 

This is a big deal because nonprofits are empowered to access a whole new community of donors with strong financial incentives to donate crypto. The Giving Block platform eliminates the risk associated with holding cryptocurrency which can deter nonprofits from seeking crypto donations in the first place. 

In addition to creating the infrastructure for crypto donations, the Giving Block offers nonprofits an online and in-person philanthropic community to connect with cryptocurrency donors and corporate partners.

Suzanne Pelletier, Executive Director, Rainforest Foundation US started working with The Giving Block to raise awareness for her organization. Frustrated with the scale and pace of traditional fundraising strategies, she turned to The Giving Block for assistance. “They developed a campaign for us called #CryptoFirefighter,” she explained. “They pushed the campaign to the crypto community and broadened our reach.” 

Although Rainforest Foundation US had been accepting bitcoin for several years on their own, they are now turning to The Giving Block for crypto donations. Pelletier explains that the Giving Block platform makes it easy for donors receive tax receipts automatically. “The platform also has an option that allows us to automatically exchange donated crypto for US dollars, which is a big advantage. It’s much more efficient” she said. 

Aside from altruistic reasons, there are practical reasons for donating cryptocurrency. Cryptocurrencies are classified as property by the IRS, just like stocks. That means that cryptocurrency donors don't pay capital gains tax on the appreciated crypto, so long as they’ve held it for more than a year. The bigger the donations, the bigger the write offs for the donor. This is particularly relevant given the wild swings in the price of cryptocurrencies. 

Mahnaz Javid is president and CEO of the Mona Foundation, a nonprofit that supports educating children in need and empowering girls and women to transform their communities. She explains that because so many crypto currencies have appreciated, “there is a real opportunity for crypto owners to do good by donating their crypto to nonprofits.” The Mona Foundation was the recipient of a $1,000,000 Bitcoin grant from Pineapple Fund, and they now accept other cryptocurrencies through The Giving Block. According to Javid, the Giving Block is helping them to “galvanize the crypto community.” Rainn Wilson, best known for playing the character Dwight in the television show, The Office, is an important advocate for the Mona Foundation. He tweeted out a video imploring crypto owners to donate their crypto to the Mona Foundation. 

Currently, donors wishing to donate crypto other than bitcoin may be unable to take advantage of possible tax benefits. This is because if donors convert their crypto to bitcoin when they donate, they lose any tax benefit to which they might have been entitled. Duffy offers that although there are plenty of options for a nonprofit organization to accept bitcoin, very few of them enable organizations to accept other cryptocurrencies. This is what makes The Giving Block optimal, Duffy explains, “our platform provides the solution.”

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