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Cryptocurrency Questions
The webinar on cryptocurrency will be held this afternoon. I’ve reviewed and summarized the questions people submitted ahead of the webinar. I’ll be in the chat, and I’ll enter the webinar at the end to ask the panelists some questions. I see five categories:
- Administration: What platforms are available to accept crypto? What are the start-up costs and time investments? How does a nonprofit transfer crypto to normal bank accounts? What are good cryptowallets for nonprofits to use?
- Accounting: What gift type classification should be assigned to crypto… in-kind, cash, stock, something else?
- Attracting donations: What is the best way to encourage crypto giving? Are there tax benefits?
- Safety and ethics: How can nonprofits ensure that crypto donations are safe and legal to receive? Are there security risks? What are the ethical issues of dealing in cryptocurrency?
- The Future: Is this a fad that will phase out soon, or is this something that nonprofits should be paying attention to?
What other questions do you have? What is your experience and input?
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2 Replies
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Cryptocurrency can be an interesting option for nonprofits, although it comes with some added complexity. In my view, the key question is whether your donors are actually likely to use it rather than simply following the trend. A platform such as The Giving Block could make accepting crypto more straightforward, but I would prioritise clear accounting, security and compliance before expanding into it.
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The accounting side is probably where things become a little complicated. From what I have seen, cryptocurrency is generally treated as property for tax purposes, rather like shares. This means the value is usually recorded when the donation is received, rather than when it is eventually converted to cash.
Platforms such as The Giving Block and BitPay can help with conversion and reduce some of the volatility and security concerns. There can still be setup and transaction costs, so I would check the pricing carefully before choosing one.
As for the future, I think cryptocurrency will remain a useful niche option. It may not be necessary for every nonprofit, but it could be worth considering if your supporters are comfortable with digital assets.
