Charity donations are not the first thing that comes to mind when you hear cryptocurrencies. Regardless of crypto notoriety, over the last few years, there has been a significant rise in cryptocurrency donations to non-profit organizations.
The reason behind most of these donations, while unfortunate, is founded on the massive tax incentives offered. These crypto donors are getting tax write-offs in the full amount of their contributions. The IRS considers cryptocurrency donations as property and does not require the donors to pay capital gain tax.
What is even more surprising is the sheer number of charity organizations in existence Statistics show that there are more than 1.5 million non-profit organizations in the US only. These numbers, without a doubt, create a competitive climate on the front of gaining donors.
So how does an organization stand out from the rest and access funds to reach its goals? By turning to cryptocurrency as a source of revenue. Let’s take a look at how charity firms can benefit from joining the crypto world.
Benefits of Crypto in Charity Donations
- Targeting New Demographics of Potential Donors
We’ve already seen how those who generate a significant amount in cryptocurrency are willing to donate funds to save on taxes. This is a trend trickling down to the next generation of tech millionaires uprising in the industry. Of course, that is not the only reason for a donation from this percentile of donors. Goodwill is still alive, and kicking and non-profits should place themselves in the best position to be recipients of these funds.
A study done in the US on its adult population showed that out of the total population of bitcoins owners, 18% of them were aged 18-34. Furthermore, it explained that the younger “millennial” generation has the most conviction in adopting bitcoin use in the next ten years.
Why are these numbers significant? Well, it’s been proven that millennials are among the biggest givers to charity. They tend to get involved in multiple-cause pursuits due to the ease at which they can learn and share issues with others. As they venture into the workforce, their contributions to donations are bound to grow.
Crypto-oriented organizations can jump into these opportunities and provide charitable solutions to bitcoin holders. By being accessible for any form of donation and staying visible, charities increase their chances of gaining funds, which leads us to our next point.
- Creating Awareness and Building on Marketing
The world, as we know, is experiencing digitization that has eased the way we share and market our ideas to the masses. However, the large number of charity organizations and non-profit organizations out there has led to an absolute saturation in the media. It’s hard to get your voice heard in a room full of other people raising their voices too.
There is no need to despair as cryptocurrency is ready to come to the rescue. Cryptocurrency news is continuously creating viral content in the media for different reasons. Therefore, organizations that are equipped to receive donations in the cryptocurrency have a higher marketing advantage.
There are worse things in the world than being dubbed a charity that is at the forefront of innovative technologies. Showing that your organization is up to date with trends and willing to be different from the rest is a sure way to draw attention. The more visibility gained, the more philanthropists will come your way.
Lend a Hand Bahamas is a non-profit organization that was recognized worldwide for its work when it set up a crypto account to collect donations for the Hurricane Dorian relief effort in the Caribbean. The funds were to help the community recover from the devastation that was left by the storm.
- Improving on Transaction Transparency
A research conducted on over 14,000 non-profit organizations documented that the greater transparency of transactions and information the organizations showed, the more funding the donors provided in the next quota.
It’s hardly surprising that donors are responding better to transparency and information sharing. Knowing that donated funds have made a difference to their targeted charity would encourage anyone to give more. Therefore, open access to transactional data that characterizes cryptocurrency is a positive attribute to any organization.
Cryptocurrencies run on a blockchain that offers a great deal of transparency with every transaction made being visible and traceable to the source. This allows donors to track their funds and find out if they are used as intended.
Charity organizations have a lot to be accounted for when it comes to the management of funds, but with cryptocurrency, all they need is to show their ledgers.
The Rainforest Foundation US called out for crypto donations during the recent forest fires that destroyed the Amazon. This was to give donors a chance to track their work in the Amazon and enforce fund transparency.
Why Crypto Donation is Better than Traditional Funding
- Cryptocurrency, thanks to blockchain, has more transactional transparency, removes the need for intermediaries making it faster and more cost-effective
- Cryptocurrency donations assured more funding money thanks to the low processing fees and are classified under non-cash gifts
- Crypto donations can be made anonymously rather than putting trust on the organization to hide donor identity as in the traditional donation
- Cryptocurrencies appeal to the tech millionaire and billionaires as it is an innovative emerging technology
Cryptocurrency is transforming aid and disaster relief at a faster rate than traditional donations ever could. In the case of epidemics and emergencies, this quick response is crucial in the aftermath of the destruction. Undoubtedly, organizations seeking funding through crypto have a lot of perks to look forward to thanks to this technology.
Nonetheless, it’s understandable that charity organizations may have reservations in risk-taking. They are, after all, handling other people’s money for sensitive projects. But the testimonies of the organizations that already use the currency should build some faith in the system.