If the pandemic has taught nonprofits anything, it is that being flexible in how you engage your donors is one of the best ways to grow your operations.
When working with donors, it is always best to not make assumptions and ensure that you are providing the best experience possible when someone wants to support your organization. Meeting donors where they are will increase your acquisition and retention rates as well.
Still, many are still hesitant to provide alternatives to paying by check or using credit cards, which is why making new types of transactions as easy as possible for both donors and organizations is one of the key initiatives of Neon One’s ecosystem.
That is why we are thrilled to announce that we have approved the industry’s most comprehensive cryptocurrency donation integration into the NeonCRM platform.
Meet The Giving Block.
What is cryptocurrency?
Cryptocurrency is a digital asset that uses a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions.
Part of the appeal of this technology is its security. Cryptocurrencies can be held as an investment, traded on exchanges, used as a method of payment or donated to nonprofit organizations.
The most well known — and oldest! — cryptocurrency is Bitcoin, but there are thousands of cryptocurrencies available that anyone can buy, hold, trade or invest in.
Bitcoin’s total market capitalization is over $250 billion dollars today, with a global market cap of all cryptocurrencies at over $400 billion USD.
While there are no precise estimates about the number of people who currently buy, sell or hold crypto, a recent survey reports that 9% of the population owns Bitcoin. That includes 18% of those aged 18-34 and 12% of those aged 35-44. Near half of those aged 18-34 agree that most people will be using Bitcoin in the next 10 years and 59% of them agree that Bitcoin is a positive innovation in financial technology.
That’s a LOT of potential cryptocurrency donors. And it’s only increasing every, single day.
How much cryptocurrency is getting donated?
Most of the immediate hesitation around cryptocurrency is that there is a perception that no one will donate cryptocurrency for charitable purposes. Yet since 2015, Fidelity Charitable has accepted over $106 million in cryptocurrencies.
With the donation of long-term appreciated assets and other non-publicly traded assets, donors are able to give up to 20% more because capital gains taxes are minimized, and that ultimately means more money to charity.
Some fast facts about cryptocurrency donations from Pat Duffy of The Giving Block:
- In 2010, one Bitcoin was worth $0.06. Today that same Bitcoin would be worth $13,500. Sophisticated donors want to give the best -performing assets to charity and cryptocurrency is one of the top options
- Millennials and Generation Z trust cryptocurrency exchanges more than the stock market and this trend is continuing to accelerate
- Nonprofits are starting to provide this option for donors and donations are starting to increase to organizations of varying sizes.
Why donate cryptocurrency to a nonprofit?
Cryptocurrency is treated as property by the IRS, and thus can be an incredibly tax-efficient asset to donate. As one of the fastest appreciating assets of the last decade, many cryptocurrency holders have experienced significant capital gains from their investments and are looking to offset their taxes when releasing them.
According to The Giving Block “When donating crypto, You receive a tax deduction for the fair market value of the crypto, and you avoid the capital gains tax you would have incurred if you had sold the crypto and then made a donation. That means you’re able to donate more, as well as deduct more on your tax return.”
As always, seek financial advice from a qualified professional before making any major gifts of cryptocurrency (or any other asset).
How can nonprofits start accepting cryptocurrency donations?
The Giving Block is a software and services partner of Neon One. While we have been working with them for a while now on giving nonprofits guidance around fundraising and cryptocurrency, they have recently rolled out a way that any nonprofit would be able to offer cryptocurrency donations right on their website.
After working with their team, we helped develop the sector’s most comprehensive CRM integration for cryptocurrency. Let’s take a look under the hood:
- Organizations set up a easy to embed widget that allows nonprofits to easily accept cryptocurrency donations, convert donations to USD and track crypto donor information
- This tool is then also able to be connected with NeonCRM in a few simple steps
- Once connected, any confirmed cryptocurrency donations will automatically be synced into existing or new donor accounts within NeonCRM.
- Most importantly, the details of the transaction beyond the donor and the amount will also be automatically appended to the transaction record within NeonCRM for proper reconciliation with accounting
Donors may also give anonymously but your organization will still collect the transaction information.
Once within NeonCRM, you will be able to engage these cryptocurrency donors with specialized communications and workflows as well as break out reports specifically on these transactions or aggregate them in other reports.
As Neon One’s ecosystem grows, we will continue to deepen the ways that donors can contribute to your organization.
It is important to meet your donors where they are and with cryptocurrency becoming a secure and safe way for nonprofits to grow their operations, we wanted to ensure that social good organizations of any size had the opportunity to offer it.