Q&A: A beginner’s guide to cryptocurrency donations

About $300 million is donated in the form of cryptocurrency each year, according to The Giving Block, an organization that helps NGOs receive cryptocurrency donations — and that figure is growing. Yet relatively few major NGOs and development organizations are set up to accept cryptocurrency donations, and it remains an unknown quantity for many. One organization that has made the leap is International Medical Corps, which has been taking cryptocurrency donations since May. It accepts contributions in 12 different cryptocurrencies, including Bitcoin, Ethereum, and Litecoin, and in nine months it has raised nearly $100,000 this way. Whitney Broadwell, senior specialist for direct marketing at IMC, said that while it still accounts for a small proportion of donations overall, the amount raised “is not insignificant for us” — especially since the funds are mostly unrestricted. She urged fundraisers not to be intimidated by the idea of taking cryptocurrency. “It was definitely not as scary as we thought it would be. … If you’re hesitating because it feels overwhelming or intimidating … at least do some exploration,” she said. “It's a valid form of currency now, it's a valid way to support causes you care about, and I think we probably should have plowed forward [with it] sooner.” Broadwell spoke to Devex about IMC’s experience with cryptocurrency donations so far and gave her tips for how to get started. This conversation has been edited for length and clarity. How did IMC get started with cryptocurrency donations? My colleague had started to raise the issue of accepting cryptocurrency. … [But] we had some reservations about it from leadership. I think they were worried, primarily, that we would be accepting funds that were coming from potentially nefarious places. … And so we had stalled out on doing it for a while. Then a company called The Giving Block reached out to us proactively and said, “we can get you up and running with cryptocurrency, we can walk you through the process of getting onto Gemini,” which is the platform that allows you to accept cryptocurrency. They held our hand through the process and got us comfortable enough to do it. “It's a valid form of currency now, it's a valid way to support causes you care about, and I think we probably should have plowed forward [with it] sooner.” --— Whitney Broadwell, senior specialist for direct marketing, IMC Was that a service you needed to pay for? They gave us a free trial for the service. They got us up and running on Gemini and gave us a widget that allows us to accept cryptocurrency straight from our website — [although] it's linked to The Giving Block, so really it's them running the widget behind the scenes. Then they started a marketing campaign around #GivingTuesdayNow, which was the day back in May that the GivingTuesday folks created to respond to COVID [COVID-19]. And they [suggested we] hop on board this campaign to help get exposure with the cryptocurrency audience. ... That really helped us introduce ourselves to people that might not otherwise have heard of us. So that was a free trial, and then in the summer, we signed on with them as a client. They have two different consulting options, which I found very reasonably priced for the return that we got. How long did the process take before you were able to start accepting cryptocurrency? Really not very long. The Giving Block reached out to us three, maybe four, weeks before the GivingTuesday event kicked off. How did you decide which currencies to accept, and what do you do with them once you receive them? The Giving Block widget accepts certain kinds of currency, and those were basically the ones that we were able to do. … Then, as soon as we can, we convert them to dollars. How do you deal with the volatility of cryptocurrency? Because the value can change quite rapidly. I think we just accept it as a cost of doing business in this channel. So far, the volatility hasn't meant an insane loss for us between the time we receive it and the time we liquidate. … [But] it's a risk that you have to consider. More organizations are starting to experiment with cryptocurrency. Why do you think that is? One benefit of giving cryptocurrency is that it's a tax-free event [in the United States]. It's like property, so you can write off a gift of cryptocurrency on your taxes. And since the new tax laws have gone into effect in 2017, there are less opportunities for people to give cash gifts and have that same tax benefit. I do think cryptocurrency is getting more mainstream in general, and nonprofits are experiencing that trickle-down effect of “whatever financial vehicle people feel comfortable giving [through], we want to facilitate that.” ... I think those are probably the two main reasons why it's becoming more popular. Do you see any other benefits? One of the advantages of cryptocurrency gifts so far for us is that the funds have been unrestricted, and that seems to be a general culture thing in the cryptocurrency world — that donors tend to want to give unrestricted funds. … One of our biggest challenges [as an organization] is finding that unrestricted funding. ... So this has been great for us for that purpose. This is an audience that we just don't have access to [normally], and it has its own sort of cultural language and thinking around ... money and giving. The Giving Block has a pretty robust social media presence, and they help us get into those sorts of conversations. They've helped us get placed in publications that cater to that audience. They also have gotten us into campaigns [and] conferences — New York Blockchain Week will have a giving component, [for example]. Those are eyeballs that we otherwise wouldn't have access to. So that — along with the tax benefits and the unrestricted giving — I think those are all really good advantages to this channel. What about those concerns you mentioned around where this money might be coming from? How did you overcome that? The process to get vetted through Gemini to transact, on both sides, is pretty thorough. Even if it's an anonymous transaction in the sense that we [as an organization] don't know the name of the person, there has to be a real identification of the person giving the gift or making the transaction with Gemini. Are there any other ways that these donations tend to differ from traditional cash donations? They're pretty big. They [tend to be] midlevel and higher donors. It feels sort of akin to stock in that way, where people are making a bigger commitment to the organization. They're not people that we can cultivate for future giving, necessarily, so maybe that's a downside that is worth mentioning. In some cases we have their information, in some we don't. So it’s a good source for a big gift, but it might not be a long-term donor that you can go back to year after year. Is there any advice you can give for other organizations thinking of trying cryptocurrency donations? Be prepared for some administrative pain up front. There’s a little bit of red tape to get started, but it’s worth it once you get it done. Find a partner that is steeped in this world. ... They can sort of hand-hold and guide you through the process and help you find your audience for this kind of giving. I think really asking a lot of questions about the source of the money is smart. We asked a lot of questions to get to our comfort level of what we thought was a safe way to do these transactions, but everybody's different. It’s a fun new world of interesting people. … Who knows what the future will hold, but I think we're willing to make some investments and take some risks to open ourselves up to this channel, and I think it's worth it.