Unless you've been living under a rock, you're undoubtedly aware that cryptocurrency is now trending
. That doesn't imply you understand everything about it and how it pertains to your non-profit. After all, that's why you're here. But chances are, your curiosity has been stirred.
There are several questions around cryptocurrencies, which we will address. But, before we get into the specifics, consider why it's important.
Why Your Non-profit Should Accept Cryptocurrency?
The rising popularity of bitcoin makes it an appealing payment option for charitable contributions
. Because it is a digital money, it is simple to collect online donations. Accepting bitcoin is a reasonable next step after online donating has risen in recent years.
Furthermore, it looks that bitcoin users are a charitable lot. According to Fidelity Charitable, 45% of bitcoin owners will have contributed $1000 or more in 2020, compared to 33% of traditional investors.
Accepting cryptocurrency may appeal to younger contributors because it is popular among Millennials. One in every three Millennials owns cryptocurrencies, which is more than double the typical investor's rate. Millennials are notably kind and charitable, maybe because they entered adulthood during the Great Recession.
Risks and Considerations to Accepting Cryptocurrency:
While block chain and encryption make cryptocurrencies harder to hack or forge, this does not mean they are risk-free.
Most cryptocurrencies, for example, are stored in digital wallets that need a key and password to access the assets. However, hackers may attack digital wallets. In the worst-case scenario, owners may misplace the key and passwords required to access the funds. When bitcoin is lost, it is gone forever. It is anticipated that $4 million in Bitcoin may be lost.
On the dark web, cryptocurrency is also utilized for transactions
. The anonymity of cryptocurrencies and the obscuring of transaction data appeals to individuals with less than noble intents.
Furthermore, the IRS considers cryptocurrencies to be property and taxes it accordingly. Depending on the circumstances, it may also be deemed capital gains.
Is Cryptocurrency Right for Your Non-profit?
While accepting cryptocurrencies for donations has advantages, such as attracting new contributors, it also has drawbacks. Whatever you pick, it appears that we are entering a wild new world of digital cash.