[Guest Post] What is Cryptocurrency Fundraising for Nonprofits

*The following information is provided for general information purposes only. If you are interested in cryptocurrency as charitable donations please consult with your professional advisors.

Sector-wide fundraising challenges over the past few years have forced many nonprofits to act fast in order to future-proof their donor outreach and retention strategies. But for thousands of nonprofits, crypto fundraising has been an effective way to diversify revenue streams, connect with young donors, and generate strong annual giving outcomes.

If your nonprofit is looking to fundraise Bitcoin or other cryptocurrencies, this article is a great place to start.

What Is Cryptocurrency?

At its core, cryptocurrency is defined by crypto exchange Coinbase as a “typically decentralized digital money designed to be used over the internet.” On a very basic level, blockchains allow anyone to view and verify a permanent record of cryptocurrency transactions. This functionality enables users to trust that payments have gone through, without needing to rely on a bank or centralized verification system.

Some of the most popular cryptocurrencies, including Bitcoin, Ethereum and Solana, are beginning to become household names, but there are several thousand cryptocurrencies in circulation.

Why Has Crypto Fundraising Become So Popular?

Nonprofit organizations of all shapes and sizes are accepting cryptocurrency donations and developing active crypto fundraising campaigns. Wondering why this trend is growing so quickly?

Donation volume may play a big role in crypto adoption by the nonprofit sector. The Giving Block, a popular crypto fundraising solution for nonprofits, reported a 1500% increase in annual donation volume from 2020 to 2021.

For most charitable organizations, developing a crypto fundraising strategy is also a long-term investment to diversify revenue streams and engage with younger donors, who are more likely to invest in cryptocurrency.

Who Donates Cryptocurrency to Charity?

Crypto users have shown their generosity by supporting a variety of causes, from Ukraine humanitarian relief to children’s health. What makes crypto donors different from typical donors? Studies and surveys have found that crypto donors are on average younger, more affluent, and more generous than their cash-giving peers.

For example, a recent Fidelity Charitable report found that crypto donors are more likely to give at least $1,000 to charity compared to people that donate via cash or credit card. In fact, approximately 45% of crypto users donate at least $1000 yearly compared to just 33% of the general investor population.

Additionally, the average age of crypto users is 38, much younger than the average cash-giving donor, which is 65, and the average age at which donors make their first planned giving gift— which is 52.8.

It’s not only individual users making cryptocurrency donations. Non-fungible token (NFT) creators have been involved in numerous charitable giving efforts, from charity auctions to commitments to donate 10% or more of sale proceeds to organizations or causes they are passionate about.

One big question for nonprofit organizations is why donors prefer to give crypto instead of cash. Aside from having a desire to do good, one reason is fairly simple: tax efficiency. Because the IRS treats cryptocurrency as a property (similar to stocks), crypto donations can help offset capital gains on the donor’s appreciated crypto assets. This not only benefits the donor, it also means they’ll likely have more to give to the charity of their choice. Crypto donations also allow the donor to give appreciated assets directly, potentially unlocking additional funds for charity. For more information about the benefits of accepting appreciated non-cash assets (including securities, an often overlooked but important gift option), read more here.

How Do Nonprofits Accept Cryptocurrency Donations?

Although the learning curve may seem steep, accepting cryptocurrency donations can be a simple process, even for a small fundraising team. Nonprofits with limited technical knowledge can quickly incorporate crypto fundraising. All that’s needed is a secure donation platform and a way to connect with crypto donors, which can be as basic as having an active Twitter presence.

With solutions like The Giving Block that help nonprofits create active crypto fundraising programs and accept dozens of leading cryptocurrencies, thousands of nonprofit organizations are turning cryptocurrency’s rapid rise into a positive force for good. Is your nonprofit ready to be a part of the future of fundraising?

If you have questions about crypto philanthropy and want to know if you should accept cryptocurrency, don’t hesitate to the team at Link Elevating Philanthropy, The Giving Block, or your professional advisors.

Sam Kahler is the SEO & Content Manager at The Giving Block, which provides an all-in-one cryptocurrency fundraising solution for nonprofits and other mission-driven organizations. To learn more, visit: https://thegivingblock.com