In a rapidly evolving world where there is a constant need for advanced solutions to facilitate payment, both profit and non-profit organizations must stay ahead of the curve by adopting these innovations. One of today’s financial innovations is cryptocurrency. Nonprofits looking to expand their reach must offer modern and tech-savvy solutions that simplify donations. This means offering cryptocurrency as a donation option opens room for more visibility and opportunity. This article will help nonprofits gain essential knowledge of how to harness the power of cryptocurrency donations to facilitate fundraising.
Why should nonprofits accept cryptocurrency donations?
Cryptocurrency offers a promising opportunity for nonprofits in need of donors. Interested nonprofits should consider the following opportunities they stand to gain:
Access to a high number of crypto ownership
In the United States alone, 52 million Americans own crypto, as of 2022 reports. This figure is projected to double in the coming years as cryptocurrency becomes more popular in the States and other countries. Nonprofits can capitalize on this growing market to diversify funding sources and gain more donors.
Attract high-quality donors
The average crypto donation in 2022 was $6,295, which was over 30 times more than the average online gift of $204. Nearly 50% of crypto donors donated $1000 or more to charity in 2020. Nonprofits are more likely to gain access to wealthy and influential donors and supporters, pushing your fundraising goals.
Future Value Appreciation
Cryptocurrency donations appreciate over time. For instance, a cryptocurrency donation of $1000 can double its value, improving the revenue of your fundraising. To offset the extreme volatility of cryptocurrency and maintain its value, nonprofits can convert their donations to stablecoins with low volatility, like USDT or USDC.
Lower Transaction Fees
Credit and debit card transactions, wire transfers, and other traditional payment methods deter donations for obvious reasons. They often come with strict regulations and high processing fees that deter donors from contributing to your fundraising. Cryptocurrency donations charge much lower transaction fees, which can persuade donors and also allow nonprofits to retain most of their donations.
Promotes cross-border donations
Many nonprofits aim to reschedule out to interested donors all around the world to contribute to their cause. However, the traditional payment structure has yet to achieve seamless cross-border payments. Prospective donors across the world face ridiculous exchange rates, lengthy processing times, and high intentional transaction fees. Cryptocurrency donations solve these drawbacks by providing seamless, fast, and cost-free transactions.
Ensures Anonymity and Privacy
The issue of privacy and anonymity is an increasing concern for interested contributors. Many donors worry about concealing their identity while partaking in philanthropic activities for personal or political reasons. Cryptocurrency donations offer a secure layer of privacy, which allows donors to donate anonymously. In return, donors fulfill their desires to donate while nonprofits receive the needed funds.
How Nonprofits Can Develop a Foolproof Cryptocurrency Policy Before Accepting Cryptocurrency
Nonprofits are advised to create a cryptocurrency policy by accepting crypto donations. This policy will serve as a guideline for how these donations will be accepted, managed, and handled to ensure they match the organization’s mission and vision and also promote transparency. The first step to creating a policy is to create a list of acceptable cryptocurrencies, which could include Bitcoin, memecoins like Dogecoin, altcoins, and stablecoins like Ethereum and USDT, respectively.
The accepted coins are chosen based on their ease of liquidity or conversion to fiat currencies. Nonprofits must also establish if donated cryptocurrencies will be held safe in a secure crypto wallet or immediately converted to fiat currencies.
Nonprofits must also consider possible legal and tax considerations as outlined by the state or federal government. Including this in the policy provides a clear definition of the nonprofit’s valuation during annual audits. For instance, in the United States, if a non-profit sells donated properties (including cryptocurrency donations over $500) within three days of the donation, they are mandated to file Form 8282 with the IRS within 125 days of the sale. This form must also be signed by a worker, and the penalty for not filing the form is $50 per form.
The policy must also provide detailed information on how donated funds will be spent to ensure transparency. Doing this will improve their validity and level of accountability to potential donors.
Best Practices for Nonprofits Accepting Cryptocurrency Donations
When nonprofits embrace crypto donations, they stand to enjoy numerous benefits. To ensure smooth and secure inclusion and maximize their fundraising, nonprofits must adopt certain practices after developing a cryptocurrency policy.
Educate staff, volunteers, and donors
Nonprofits looking to accept cryptocurrency donations must educate their staff, volunteers, and donors about the process and benefits of this donation option. For staff, nonprofits should explain the process of managing crypto donations and also how to include them during auditing. Nonprofit volunteers should understand basic information about crypto donations and how they differ from the traditional option.
Choose a Credible Cryptocurrency Processing Service Provider
Selecting the right cryptocurrency processing provider is integral to the success of cryptocurrency donations in nonprofits. The right provider must guarantee smooth and secure transactions and also provide additional features, such as an interactive admin dashboard to manage donations.
PTPShopy is a cryptocurrency payment gateway that helps charities and businesses accept cryptocurrency donations from donors. This solution provider employs blockchain technology to create a financial solution that addresses the main problems associated with cryptocurrency donations. With multiple effective decentralized tools, nonprofits can begin taking donations in a matter of hours, even if they have no prior experience with cryptocurrencies. With over 400 cryptocurrencies accepted by PTPShopy, potential donors can choose to contribute to a different charity.
Donors can receive tax deductions by presenting a donation invoice they receive from PTPShopy to the OTA during tax filing. PTPShopy does not require setup or monthly fees for charitable organizations to set up their donations and also offers tailored cryptocurrency donation solutions if need be. In addition, PTPShopy offers robust customer support and is compliant with government regulations. Nonprofits can easily integrate PTPShopy payment gateway information with the platform’s existing donation systems to ensure a smooth donation experience.
Add Crypto Options to the Website
The next step is to add the cryptocurrency donations option to your website. You can create a unique donation page, explaining how donors can use the PTPShopy payment gateway. Including photos or logos of popular cryptocurrencies can help attract more donors.
Promote
It’s essential to promote this new donation option to both new and existing donors via your social media channels, blog posts, and email newsletters. By highlighting the benefits of donating cryptocurrency, such as tax deductions, your nonprofits can attract more donors.