What’s the point in accepting cryptocurrency donations? – A short essay
Earlier this week, I posted a tweet thread highlighting the value of accepting cryptocurrency donations as a non-profit, and addressing the common question: “what’s the point in accepting cryptocurrency donations?”
Today, I wanted to expand on this thread in a short essay, and dive a bit deeper in to each of the points I raised about the importance of accepting cryptocurrency donations as a non-profit and engaging with the web3 space.
What’s the point in accepting cryptocurrency donations as a non-profit?
Many non-profit organizations don't see the point in accepting cryptocurrency donations. After all, a large number of them choose to cash out their cryptocurrency to fiat immediately upon receipt of the donation, to secure the value of the gift. So, to many, cryptocurrency donations are viewed almost as equivalent to accepting a donation by credit card or cash. What many of these organizations fail to recognize, however, is that it is way more than just a different way to bring in funds.
Accepting cryptocurrency donations shows that your organization believes in and values innovation and transparency. These two traits are of the upmost importance to the next generation of donors, who grew up in the smartphone era with access to any information they could ever want with the click of a few buttons. They value organizations that are open and honest, and that is also why so many of them value cryptocurrency and web3. These individuals also want to see non-profits embracing technology as a way to more effectively deliver their services, because they believe in the power of technology to improve lives. Transparency and technology are vital to the long-term success of your organization, and if you don’t value them, you risk falling behind.
If your non-profit is averse to innovation, you risk alienating an important donor demographic, and more importantly, to missing out on all the opportunity that comes with being a part of the #web3 community. What many don’t realize, is that web3 is a truly diverse and global movement. By accepting crypto donations, it enables you to spread your message to a much broader, more global audience. There are few communities that are as globalized as the blockchain and cryptocurrency ecosystem. A quick look at Chainalysis’ Global Crypto Adoption Index, for example, shows how global the reach of crypto is, with every continent but Oceania (and of course Antarctica) having representation in the top 20 list of Crypto-adopting countries.
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Those in the web3 space come from many backgrounds. They aren’t just coders, but are community connectors, promoters, policy experts, artists, and much more. Accepting crypto donations can get your foot in the door to this amazing and talented community. It can be step one in a journey to fully embracing web3 and all its future use cases for your organization. Blockchain and decentralized platforms, apps, and organizations, are revolutionizing the way that non-profits deliver their services all over the world. Whether it’s providing direct access to financial services for marginalized populations, supporting and empowering refugees, delivering Unconditional Basic Income (UBI), combatting climate change, or monitoring ocean clean-ups, the use cases are truly endless. By engaging with the web3 spaces, it can open your mind to new technologies and use cases that can truly revolutionize the way your organization supports beneficiaries and delivers your mission.
That being said, it’s important not to forget that accepting crypto donations can also save your organization significant dollars in fees which would normally go to donation platforms and payment processors. In my blog post “Accepting crypto donations in the charitable sector,” I highlighted the exorbitant fees some donation platforms charge to charities. Global Giving, for example, charges 8-15% in fees, while GoFundMe charges 2.9% plus 30 cents per transaction. Many charities elect to accept donations directly through their website via credit cards, but this doesn’t prevent them from paying fees. In fact, typical credit card fees range from 1.3% - 3.5%, and this doesn’t account for the additional cut that goes to the payment processor. Most cryptocurrency transactions, on the other hand, are extremely low cost, especially relative to the alternatives mentioned above, and can help ensure a greater share of the donation goes to the non-profit, ensuring that each donation has a greater impact.
Ultimately, when it comes to accepting cryptocurrency donations, it isn’t a matter of if, but when. In the book “Bitcoin and the Future of Fundraising” by Connelly and Shim, they use the example of accepting credit card donations. Decades ago, individuals were terrified of the potential of entering their credit card number online, and many charities were slow to accept credit card donations. Then, when credit cards were adopted at a rapid pace for online payments, many non-profits were slow to react, and missed out on potential donors who chose this as their preferred method of payment.
In a sense, cryptocurrency is very similar, but with much broader implications. Not only does it have the benefit of connecting your organization with a new and exciting donor base, in which hundreds of millions in donations are being made, including major gifts in the millions, but as highlighted above, it opens your organization up to an exciting new technology with use cases that go well beyond simply accepting cryptocurrency donations.
You can either be a leader in the space, and embrace innovation, or scramble and play catch up a couple years from now. If you choose the latter, your organization will miss out on all the benefits that come with being an early adopter. The choice is yours.
What are some of the other reasons the charitable sector should embrace cryptocurrency donations? Tweet us at @Crypto_Altruism, we’d love to hear from you!
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