This is a contributing post by Alex Wilson and Pat Duffy of The Giving Block.
Over the last few years, we’ve all seen some dramatic shifts in the way millennials and Gen Zs interact with money - and donate. Apps like Venmo and CashApp beat out cash. Now Bitcoin is beating out gold. And, when they donate their Bitcoin or other cryptos directly to a nonprofit, they pay less taxes.
Why are millennials donating Bitcoin?
Hundreds of millions of dollars in Bitcoin has been donated to nonprofits. As the price of Bitcoin surged in 2017, so did donations. The reason? Taxes. In the United States, the IRS classifies cryptocurrencies as property, like stocks. That’s why donating crypto directly means you give more, and pay less taxes.
Why won’t millennials stop talking about Bitcoin?
Your millennial employees (and donors) talk about Bitcoin more than Justin Bieber, Kim Kardashian and most other prominent celebrities.
With younger generations like Millennials and Gen Z, nonprofits are finding that accepting cryptocurrency donations energizes marketing and branding efforts.
According to Nate Geraci, president of the ETF Store, 90% of millennials prefer bitcoin over gold.
“When we talk to our younger clients - we have a core gold allocation in our portfolios, and they’ll ask about that and say, ‘What about crypto?’ And if you talk to, primarily millennials, and ask them which they prefer, bitcoin or gold, it’s a landslide. It’s not even close, it’s like 90% prefer bitcoin.” [CCN]
Accepting cryptocurrency donations shows your donors (and employees) that you are innovative, diversifying revenue and looking for the most tax efficient ways for donors to give. In some cases, the marketing benefits may even outweigh the fundraising benefits.
How do nonprofits accept cryptocurrency?
For nonprofits, different wallet solutions for cryptocurrency can mean very different experiences for your team. Some solutions like BitPay accept only Bitcoin related cryptos. It makes life easy for your nonprofit, but means donors with any other cryptos will trigger a taxable event converting to Bitcoin before they give, losing their tax incentive.
Other non-custodial solutions are popular among the die-hards in crypto, such as blockchain.info. The issue here is that not only would you have to set up new systems for each individual crypto, but there would be no way to have donations convert automatically back to USD, sheltering your nonprofit from market volatility.
Identifying the need for donors to contribute from many crypto communities (not just Bitcoin), as well as the needs of nonprofits to have a solution that wasn’t just easy, but worked - we created The Giving Block, designing the first solution designed specifically to work for nonprofits and their donors.
For nonprofits, accepting Bitcoin and other cryptocurrency donations may not feel necessary yet; however, as we see the user base of cryptocurrency grow (currently 40-50 million people), we expect the growth and adoption to be similar to that of credit cards. Ten or fifteen years ago not many nonprofits accepted credit card donations. Now everyone does. Over the next five years we’ll likely see a similar trend emerge.
About The Giving Block:
The Giving Block equips nonprofits to fundraise Bitcoin and other cryptocurrencies, providing education, training, and a technical solution. For nonprofits who choose to go the extra mile, they advise on crypto fundraising strategies, and pair nonprofits up with partner crypto organizations, elevating fundraising and awareness outcomes. Ultimately, they help nonprofits build a crypto fundraising program, and a brand in the cryptocurrency industry.