Nonprofit organizations often require diverse revenue streams to fulfill their missions. The more revenue streams, the more income to fulfill a nonprofit’s mission. Like many other types of organizations, it’s evident nonprofits experienced a decline in fundraising amid the Covid-19 pandemic. In fact, due to the pandemic shutdown, 83% of organizations’ revenue was lost from canceled events and closed operations.
Popular revenue streams for nonprofits included individual donations from traditional mailings and telemarketing in the form of cash, check, and credit cards. As digital usage continues to expand globally, nonprofits must adopt technology and digital platforms. The organizations that adopt technology can reap astronomical gains by integrating cryptocurrencies as donations in the investment portfolio.
Using Technology as Currency
A cryptocurrency or “crypto” is a decentralized digital currency that can be used to buy goods and services but uses an online ledger with strong cryptography to secure online transactions. Ultimately, “cryptos” works using blockchain technology, distributed across many computers that manage and record transactions. There are thousands of different cryptocurrencies available today. Bitcoin, Ethereum, Litecoin, and Dogecoin have great potential to store and grow value for the investment portfolio.
A Variety of Cryptocurrencies
- Bitcoin – Bitcoin is a digital currency that can be sent from user to user on a peer-to-peer network.
- Ethereum – Ethereum is a decentralized, open-source blockchain that utilizes smart contracts.
- Litecoin – Like Bitcoin, Litecoin is also a peer-to-peer cryptocurrency.
- Dogecoin – Dogecoin is a cryptocurrency similar to bitcoin’s features, created in 2013 to mock cryptos. but is now viewed as a legitimate investment. As Elon Musk states often, “Fate loves irony.”
Why Accept Cryptocurrency as a Donation?
Cryptocurrency is very volatile, meaning it is high-risk but reaps high reward when it’s donated. For instance, Bitcoin is up (roughly 7,000%), as of 6/4/21, the past 5 years, and about 10 years ago, one bitcoin was worth $250. Long story short, one bitcoin reached an all-time high of $63,000, April 2021.
Who Uses Crypto?
The majority (74%) of cryptocurrency investors today fall between the ages of 25 and 44, with another 19% between the ages of 45 and 55. Today, more than 21.2 million adults, or about 14% of the U.S population, own cryptocurrencies such as Bitcoin or Ethereum, and the number of investors is set to double this year.
How to Obtain Cryptocurrency Donations?
Cryptocurrency can be accepted as donations just like traditional stocks. Accepting cryptocurrency is universally accessible for any organization. For instance, Coinbase, a cryptocurrency exchange platform, is a service that will convert digital currency to local currency. By creating a Coinbase account, just like PayPal or Venmo, organizations can transfer funds from a digital wallet to a bank account. Coinbase doesn’t charge any processing fees for donations to 501©(3) nonprofits and charities.
Integrating Cryptocurrency Donations Through an Existing Marketing Supply Chain
To incorporate cryptocurrency as a donation, a nonprofit should integrate the request for cryptocurrency donations into existing marketing sources. Marketing sources could include social media that tag a link with the digital wallet or printing a link on mailings that encourage donations.
Benefits of Cryptocurrency Beyond Initial Revenue
Adding cryptocurrency to your investment portfolio will reap big gains in the long term. Accepting cryptocurrencies as a donation will show early adoption, grabbing the attention of the public, and attract younger donors to ensure longevity and sustainability for the organization. Ultimately, it’s a way to transition from traditional high-cost mailings and funds to a more modern digital approach.
Some reliable sources and entrepreneurs back cryptocurrencies, so I believe today is the day for your organization to adopt digital assets for the investment portfolio. Cryptocurrency can be environmentally friendly if mined sustainably especially compared to the current financial banking system such as ATMs, banks, etc. which can be used as a marketing strategy. Currently, companies are offering employees to either be paid in normal currency or cryptocurrency, proving its mainstream adoption.
References
Allcot,D. (2021, April 21).14% of Americans Own Crypto Right Now – Here’s Who’s Actually Doing It Right. Yahoo Finance.https://finance.yahoo.com/news/study-reveals-crypto-biggest-investors-132102315.html
IndependentSector. (2020, June 15).The Impact of Covid-19 on Large and Mid-Sized Nonprofits. Independent Sector.https://independentsector.org/resource/covid19-survey
Royal,J., & Voigt,K. (2021, January 2).What is Cryptocurrency? Beginners Guide to Digital Cash. NerdWallet.https://www.nerdwallet.com/article/investing/cryptocurrency-7-things-to-know
Mr. Romaine currently resides at the nonprofit, American Center for Law and Justice (ACLJ), as a highly trained data entry and money processing clerk. While making a positive impact in the nonprofit, Mr. Romaine completed his Master of Business of Administration with a concentration in Nonprofit at Regent University. With a long stance and passion for the environment, Mr. Romaine obtained his undergrad from Roanoke College with a major in Bachelor of Science in Environmental Studies and a minor in Sociology. Mr. Romaine strives to assist nonprofits he genuinely believes in to spread awareness and make a greater impact for the organization. Mr. Romaine can be contacted by phone: (757) 560-7008 or email: brendan.g.romaine@gmail.com, for further information and inquiries regarding nonprofit organizations.
FAQs
By accepting crypto donations, nonprofits have the opportunity to bring in more, vital funds to support their mission. Crypto philanthropy also allows nonprofits to widen their supporters, with 94% of crypto buyers reported to be between the ages of 18 and 40, the majority of whom are millennials (The Giving Block).
Can a non profit accept crypto? ›
Use an intermediary 501(c)(3) to minimize legal, accounting, and administrative burdens. Your nonprofit can accept crypto support through another 501(c)(3), such as a donor advised fund (DAF), without taking custody of cryptocurrency.
How much of your investment portfolio should be in crypto? ›
Most financial experts recommend limiting crypto exposure to less than 5% of your total portfolio. Crypto is considered a high-risk asset class. Limiting allocation helps manage overall volatility and risk. Those new to crypto investing may start with 1% to 2% as an introduction.
Why add crypto to portfolio? ›
Bitcoin and other digital assets have historically offered high returns (for high risk) and a low correlation to public equities. This means they have the potential to contribute to both portfolio returns and portfolio diversification. Crypto is a volatile asset class, so a little goes a long way.
What is an example of a diversified crypto portfolio? ›
A diversified crypto portfolio may include tokens that span industry sectors such as gaming, file storage, environmental protection, and finance. Expand across geographies. You can grow your crypto portfolio to include tokens that are primarily used within specific geographic regions.
How many nonprofits accept crypto? ›
As of January, 56% of the largest U.S. charities now accept cryptocurrency donations. According to The Giving Block, a crypto-giving platform for charities, more than $2 billion in crypto has been donated to nonprofits since 2018.
How do I donate crypto to a non profit? ›
The Giving Block is the #1 crypto donation solution, which provides an ecosystem for nonprofits and charities to fundraise Bitcoin and other cryptocurrencies, be found by crypto donors, receive funds instantly, and become part of a network of crypto media partners to support their missions.
What is the 1% rule in crypto? ›
Finance Ministry in 2022 introduced one percent TDS on crypto transactions and 30 percent tax on capital gains that accrued on the sale of cryptocurrencies.
What is the number 1 rule of crypto? ›
Don't overcommit. Due to its volatility, crypto shouldn't be a large part of your investment portfolio. A good rule of thumb is to put no more than 5% to 10% of your portfolio in crypto. The other 90% to 95% should be in more proven investments, such as stocks and real estate.
What would 5000 in Bitcoin be worth today? ›
The current price of 5000 Bitcoin in US Dollar is 333.11M USD. The price is calculated based on rates on 34 exchanges and is continuously updated every few seconds.
Key Points. Well-balanced crypto portfolios prioritize diversity, including different cryptocurrencies with varied risk levels and use cases. Maintaining a balance between crypto and traditional investments is crucial, limiting crypto to 5-10% of the total portfolio.
How many people own 1 Bitcoin? ›
However, some estimates can be made based on blockchain data and surveys of Bitcoin holders. According to data from Bitinfocharts, as of March 2023, there are approximately 827,000 addresses that hold 1 bitcoin or more, representing around 4.5% of all addresses on the Bitcoin network.
Is even a little Bitcoin too much for your portfolio? ›
A small dose of 1% or 2% bitcoin doesn't have a big impact on your portfolio. At these levels, bitcoin contributes roughly 3% and 7% of total risk, respectively, and results in a minimal change to overall volatility, as shown in Exhibit 3.
What is 12 20 80 strategy? ›
Set aside 12 months of your expenses in liquid fund to take care of emergencies. Invest 20% of your investable surplus into gold, that generally has an inverse correlation with equity. Allocate the balance 80% of your investable surplus in a diversified equity portfolio.
How to build a million dollar crypto portfolio? ›
Here's How I Built My Million Dollar Crypto Portfolio
- Invest every payday. Every time I get paid I buy some crypto. ...
- Invest heavily when markets are down. ...
- Avoid hype. ...
- How to one-up the entire crypto market. ...
- Stick to the top ten. ...
- Dollar-Cost Average. ...
- No intention of selling. ...
- 5-year timeframes.
An ideal diversified portfolio would include companies from various industries, those in different stages of their growth cycle (e.g., early stage and mature), some companies from foreign countries, and companies across a range of market capitalizations (small, mid, and large).
Can a business accept cryptocurrency? ›
Yes, any business can have a crypto wallet, or multiple wallets for different cryptocurrencies. They should be aware of the different types of wallets available. For example, a custodial wallet is managed by a third-party, often a crypto payment processor or a trading exchange.
How do I accept donations on crypto? ›
The donor chooses their preferred cryptocurrency. An invoice is generated which the donor then pays with their crypto wallet. Once the cryptocurrency is received, BitPay converts the donation to fiat. Donations are deposited into the nonprofit's bank account in their preferred fiat currency the following business day.
Does crypto count as income? ›
With relatively few exceptions, current tax rules apply to cryptocurrency transactions in exactly the same way they apply to transactions involving any other type of asset. One simple premise applies: All income is taxable, including income from cryptocurrency transactions.
Are crypto donations taxable? ›
TL;DR: Donate Crypto, Lower Taxes
Due to its tax treatment by the IRS, by donating appreciated crypto, you won't owe capital gains tax on those appreciated assets as you would have if you had sold the crypto first. For that reason, donating crypto is also more tax-efficient than donating cash.
