Unlocking Generosity: How Cryptocurrency Is Changing Philanthropy
Charitable giving has always been an integral part of society, with the end of the year being a crucial time for donors to make a difference. Recent statistics reveal that December alone witnesses a significant 30 per cent of annual giving, and the last three days of the year account for 10 per cent of the total. However, what’s truly intriguing is the growing trend of cryptocurrency donations that have the potential to reshape philanthropy in 2024 and beyond.
Charities Embracing Change
While cryptocurrency donations are not as ubiquitous as traditional methods, numerous charitable organisations have started embracing this new form of giving. Notably, The Giving Block, a crypto and non-cash asset fundraising platform, has allowed thousands of nonprofit organisations worldwide to accept cryptocurrency donations easily. The spectrum of organisations involved in crypto philanthropy is diverse, from local food banks to global giants like St. Jude Children’s Research Hospital and Feeding America. Even environmental organisations have joined the movement, dispelling misconceptions about the carbon footprint of cryptocurrencies.
Making a Crypto Donation
One might wonder how donating cryptocurrency differs from traditional methods. Zoe Nawar, Head of Web3 Partnerships at The Giving Block, explains that the process is as straightforward as any other. Crypto users with an asset they wish to donate can find thousands of nonprofits on The Giving Block’s website. Each organisation offers a donation form where donors can generate a wallet address, make direct contributions, and receive a receipt for tax purposes.
Organisations like Upbring, a direct-action nonprofit based in Austin, Texas, have embraced crypto donations and offer various options for donors. They manage a ‘Crypto Endowment Fund for Better Childhoods,’ where crypto contributions are invested over time in innovative solutions. Alternatively, they have a fund for direct services, converting crypto funds to US Dollars for immediate distribution. Upbring actively collaborates with financial service providers like The Giving Block and Endaoment to streamline crypto giving, ensuring efficiency and ease for donors.
Tax Benefits of Crypto Philanthropy
One significant advantage of donating cryptocurrency is its tax efficiency. Like stock donations, appreciated crypto donated directly to a charity is not subject to capital gains taxes. This means donors can reduce their tax burden significantly, ultimately allowing them to contribute more to their chosen organisations. Such benefits make crypto donations attractive for those looking to make a difference while optimising their tax situation.
Engaging the Younger Generation
The rise of cryptocurrency donations is also ushering in a younger generation of donors. Studies have shown that a significant percentage of Millennial millionaires own cryptocurrency and are more likely to donate generously to charitable causes. Accepting crypto donations is an effective way for charities to connect with a new generation of donors eager to contribute.
Borderless Giving
Another significant advantage of crypto donations is their borderless nature. Traditional banking systems often fail to meet the needs of cross-border transactions effectively. Cryptocurrency’s decentralised nature allows resources to flow seamlessly between communities worldwide. For instance, someone outside the United States can support an American charity like Upbring without incurring currency conversion costs.
Diverse Charities Accepting Cryptocurrency
Donating to the Maui Emergency Response Fund supports a number of amazing nonprofits including:
The future of crypto philanthropy looks bright, with The Giving Block anticipating a surge in crypto donations due to an expected bull run. However, to achieve mainstream adoption, more education and awareness are essential. The Giving Block is actively working on resources and simplifying the donation process to assist charities in making the transition to crypto giving seamless.
Empowering Change
Incorporating crypto donations has allowed charities to tap into a new source of funding and opened up innovative fundraising opportunities. Projects like “Awaken Your Inner Child,” an NFT fundraising initiative, have provided charities like Upbring with substantial resources. As we enter 2024, crypto holders and nonprofits should consider cryptocurrency’s transformative power in reshaping the landscape of charitable giving. It’s not just about embracing change; it’s about empowering change through crypto philanthropy.
