Charities Accepting Digital Currency is the Way Forward
Beyond the speculation surrounding cryptocurrency and the rise of its popularity, more charities are now accepting this virtual asset and more platforms like Givewithnothing are boosting the process. Does it help them and can they gain extra donations by accepting it?
In a fast-paced digital landscape, it’s become the land of all possibilities and it was almost inevitable for its own currency to form. Initially, cryptocurrency came to light through its use on the Internet’s dark web, but its intended use through blockchain technology makes it appealing. Blockchain is a decentralized public ledger that records every ownership and transaction for all to view, so there are no hidden loopholes.
As everything is tracked, donors can easily see when their payments have gone from their digital wallets into a charity’s hands. This tracking mechanism has many in the nonprofit sector and its supporters excited. Donors can effectively see how their donations are being used through greater transparency generating trust. Also, the organizations that can create the shortest distance between gift and outcome wins.
Raphaël Mazet, the founder of Alice, a London-based software company that helps charities increase transparency and accept donations, states that it’s a “massive innovation” to how charities track, measure and report gifts.
Since the rapid rise of bitcoin’s popularity in the past year, more and more charities have started to accept the currency as donations. However, unlike many who hoard onto their assets for a financial portfolio, charities are converting bitcoin into cash via digital currency exchange companies straight away. This is important because of its crypto's volatility. Bitcoin fell by 50% between December 2-31 last year, for instance. Charities do not want to be caught holding something that can decline so quickly.
Given the fact that bitcoin has no ties to a government or any central banking system, donors contributed huge amounts of bitcoin to their chosen causes.
Why would someone donate with bitcoin over money? By donating these assets, cryptocurrency holders can eliminate the hefty capital gains taxes on the appreciation, depending on when they are bought and sold. Donors still get to deduct the asset’s value from their taxes as a charitable donation, while giving the full fair market value to charity. The result is a win-win situation.
Now are even dedicated bitcoin charity organisations to facilitate and encourage donations.
There’s Giftcoin, who are the world’s first cryptocurrency for charitable giving. Using smart contracts — a transparent, conflict-free way to exchange anything of value while avoiding middleman services — Giftcoin plan to keep donors informed how their supported charities are progressing and only unlock funds once certain requirements have been fulfilled. For instance, if a donor given to a charity planning to build a well, the project could be broken down into three stages: finding the land, building the well, handing it over to the community. After each milestone is reached, donors will be notified. Once this has been independently verified, the next stage of funding will be released to the charity. Atop of this, Giftcoin also have an app that enables the public to donate to a cause of their choice, by converting small change from daily spending into the very titled currency,
Joining them is givewithnothing.org, who aim to create a charity ecosystem that serves as a common platform between givers and charities, with key advantages being ease-of-use via the website and the immutable benefits of blockchain technology. The integrated givewithnothing.org exchange will provide a unique and dedicated marketplace where charities can sell their Alms (their token) for USD, and where givers can buy Alms to donate to their favorite charities. Alms can be bought, stored, traded or donated like any other currency.
Reinforcing the use of digital assets is N77 Society, who drive innovation and effectiveness in philanthropy to create greater good. N77 has declared their intention to adopt cryptocurrency as an operational currency. Their General Secretary, Lydia Vladimrskaya, states, “We would like to see ourselves as the future and use tools that are more likely to gain rather lose liquidity with time.”
As more people begin to use digital money, the more cryptocurrency donations will be made and can only lend give it more credence atop of philanthropy organizations’ operational costs. Just like the old fundraising adage goes, giving more options to donors can help you raise more!
Author: Francesco Segramora