Demystifying Crypto Donations: What Every Nonprofit Needs

Roughly 65 million Americans own crypto today, and this number is only increasing, as the global market cap has risen by a trillion dollars since 2021. The reasons people are watching crypto predictions and feel drawn to buy them can range from technological and cultural to psychological. Entering the crypto scene feels like getting in early “on the next big thing”, and the potential for substantial returns remains one of the most significant pull factors despite the risk this market presents.

However, there’s more one can do with crypto than use it to build wealth. Many people are using it as a tool to make an impact on the world. How are they doing it, you may ask? By donating their crypto to non-profits. Donations may be down since the 2020 pandemic, but the popularity of crypto donations has seen tremendous growth over recent years, and there are a number of reasons for this:

●        New money donors: As the value of Bitcoin grew dramatically in recent years, early investors who saw their holdings multiply decided to put their new wealth toward a greater cause;

●        Tax benefits: Donors can avoid capital gains taxes and claims by donating their crypto to charity;

●        Streamlined tech: Crypto donation platforms allow nonprofits to accept crypto seamlessly, without delays or complicated logistics, which has fueled the frequency and size of crypto donations.

Accepting crypto donations is an opportunity nonprofits cannot ignore, and there’s a growing list of charities that have already embraced it, from smaller to larger, including Save the Children International, The Water Project, United Way Worldwide, and Rainforest Foundation, to name a few.

Why Accept Crypto Donations?

Now that you know about the popularity of crypto donations, you may feel intrigued but still wonder why you should consider them. Here are some of the biggest benefits of embracing the potential of crypto donations:

●        Access New, High-Value Donors. Crypto opens the door to a donor base that nonprofits don’t usually have access to: younger, tech-savvy generations. Gen Z and millennials make up the majority of crypto users, and they are happy to use their wealth to support causes they care about. Most importantly, many people in this group are investors or high-income earners who see philanthropy as part of their personal financial growth. By offering the opportunity to donate crypto, you can reach these groups with ease.

●        Earn Larger Donations. Crypto donors are open to giving generously because many of them achieved wealth during market surges and use crypto as a tool for good. They are also motivated by tax efficiency.

●        Position Your Nonprofit as Innovative and Adaptable. Accepting crypto signals that your nonprofit is future-ready, helping you differentiate yourself amid many other organizations that still hesitate to accept crypto donations.

How Can You Accept Crypto Donations?

There’s a common misconception that embracing crypto is incredibly difficult for nonprofits, but that’s just not true. If you have the right tools, the process is quite straightforward:

First things first, research crypto donation platforms and choose the one that best fits your organization. There are a couple of options to choose from, including unified non-cash giving platforms (which help eliminate administrative and technical burdens), basic exchange checkouts, manual DIY wallets (usually high-risk and labor-intensive), and specialized crypto-only processors.

To receive crypto donations, you first need to make sure people know they have this option. You can include crypto on your website in three different places, including the main donation page, the “Ways to Give” page, and a crypto-specific landing page. For example, your “Ways to Give” page includes all the ways people can contribute to your organization, and you can seamlessly add crypto to this list by adding a new bullet. You could write something like” Donate crypto to make a difference and save on taxes. Learn more here (insert a link to a dedicated crypto giving page.” Easy-peasy, right?

As your nonprofit starts embracing non-cash donations, it’s essential to ensure everyone on your team is on the same page about best practices, as this will help you act ethically and mitigate risks. You need to either update your current gift acceptance policy or create a new one for accepting crypto donations. Because crypto is volatile, liquidation should be at the top of your mind when designing your policies. At the same time, your nonprofit should issue donation receipts (the process is a little bit more complex, so make sure to check it out). Many crypto users like to donate anonymously, but since these types of donations come with ethical and logistical issues, you’ll need some information from them for tax compliance.

If members of your team harbor concerns or hesitation about getting started with crypto, you should have open conversations with them about the benefits and risks of accepting crypto donations. Information is always a powerful tool in combating anxiety about crypto, so make sure to share statistics about its popularity and potential with them, and ensure they understand your gift acceptance policies.

Not all crypto owners understand the benefits of donating crypto to your charity, which is why you need a detailed marketing plan to spread the word about your new donation option and why people should consider it. You could, for instance, send a text announcement to tell donors that you’re now accepting crypto donations, or create a blog post on your website where you mention the new giving option. Want to get more creative? Design a social media infographic explaining the benefits of donating crypto as well as the steps to donate it to your nonprofit. Once people donate, make sure to shine a spotlight on them on social media or in your email newsletter to further encourage others to do the same.

The Bottom Line

Crypto donations are a growing and exciting field for nonprofits, and getting up to speed on this type of fundraising will help your organization stay ahead of the curve. So, will you embrace non-cash giving and build strong connections with new donor groups?