There are serious benefits to crypto donations
According to The Giving Block, crypto donations grew by 583 percent on Crypto Giving Tuesday, with $2.4 million in donations coming in on November 30, the organization’s biggest crypto fundraising day. The company reports that about $300 million is donated per year in the form of cryptocurrency.
Coinbase, one of the world’s largest cryptocurrency companies, lists several advantages of donating cryptocurrency. The top one is a tax advantage. Those who donate cryptocurrency directly instead of selling it and donating the dollars from the sale, you would end up paying up to 20 percent in capital gains tax, according to Coinbase.
If you were to just donate crypto directly, “your tax-deductible contribution could go much further,” the company states on its website.
Realizing the benefit to donors, more and more nonprofits have started to accept alternative donations. Nonprofit participation rose 839 percent for Giving Tuesday in 2021, according to The Giving Block, and some of the largest charitable organizations on the planet have started to accept cryptocurrency in some form, from United Way to UNICEF—local charities have begun to take notice as well.
Among the local charities to accept cryptocurrency donations is the Humane Society of Utah.
The organization began to take cryptocurrency donations a few months ago, and takes donations in 26 different currencies, from Bitcoin and Ethereum to Dogecoin. The Humane Society hasn’t widely advertised the fact that it accepts crypto, opting for a slow rollout. As a result, it hasn’t received an abundance of crypto donations to this point. A few smaller donations have come in so far, but Humane Society Executive Director Vaughn Maurice sees a lot of potential for the technology’s future for charities.
“When people understand how easy it is, people that are into crypto can know how to spend it and know how to deal with it fairly easily,” he says. “I think it’s something that will catch on. It’s like anything that’s relatively new as a concept. It’ll take time for people to learn or even accept crypto and get used to that as an idea, but I think it will. I’m very positive about it.”
The Humane Society works with The Giving Block to accept cryptocurrency. Utah Food Bank is another Utah-based organization that accepts cryptocurrency through a partnership with the Giving Block. The Giving Block automatically converts cryptocurrency to cash when the Humane Society receives a donation.
The Humane Society doesn’t keep cryptocurrency on its books. It does have investments, but its investment committee takes a conservative approach to investing, with a portfolio of about 25 percent mutual funds and about 75 percent bonds, Maurice says. With the potential volatility of cryptocurrency, the organization has to play it a bit safer with the donations it receives. The partnership with The Giving Block and the ability to quickly turn crypto into cash was a big selling point for Maurice and the Humane Society, he says.
“The number one question when I talked to people about this was ‘Well, how do you know what it’s going to be worth?’” says Maurice.
Maurice hopes that cryptocurrency can play a part as the Humane Society kickstarts a capital campaign in St. George for a brand new shelter.
Another advantage of donating cryptocurrency is privacy, the Coinbase website states, citing a 2021 survey from Give.org that found 61 percent of poll respondents were concerned about data privacy in relation to philanthropy.
The ability for charitable organizations to hold cryptocurrency could also heavily depend on whether more companies begin to accept payments via crypto, or more companies partner with companies that quickly convert cryptocurrency into standard currency. After all, a charity like the Humane Society needs to turn donations into things like food and other pet supplies.
Cryptocurrency donations to help fund the Ukrainian resistance has been one topic that has gained some notoriety since Russia invaded Ukraine in February. The Ukrainian government tweeted its wallet addresses on February 26th, and by the second week of March, Coindesk reported that Ukraine had received “close to $100 million” in crypto donations, according to Alex Bornyakov, Ukraine’s deputy minister at the Ministry of Digital Transformation.
In an instance such as this one, when Ukraine is being actively invaded by another country, those funds need to be spent quickly. Much of that funding was spent on fuel, food, and bulletproof vests for soldiers, according to a Coindesk interview with Michael Chobanian, the founder of Kiev-based crypto exchange Kuna.
Among the companies jumping in to provide assistance was Utah-based web3 company pieFi, whose developers began working with Ukraine United DAO to help in the fight from abroad.
“Web3 in action… pieFi jumped right in to help,” Ty Roney, the company’s marketing director, said in a pair of LinkedIn posts. “It’s inspiring to watch so many people mobilize to help. Super impressed with pieFi for making things happen, fast.”
Among Ukraine United DAO’s goals was to help create “peer-to-peer networks to preserve internet connectivity, even if centralized internet service providers go down,” according to an article from Elizabeth Lopatto for The Verge.
This is just one situation where emerging technology can play a part in doing some good.“It really restores your faith in how people and community and technology can do so much,” Ukrainian-born lawyer Yev Muchnik told The Verge.