Crypto is more than just a trend; it has become an important component of our economic and financial landscape. For nonprofits, it represents an opportunity to tap into a new pool of donors.

Nonprofits and the Crypto Economy

Nonprofits and the Crypto Economy, especially tax-exempt ones, rely on public donations for their funding needs. Currently, the vast majority of these donations are cash. However, recent research shows that organizations that accept non-cash assets like stock see the highest fundraising growth.

With the recent boom in cryptocurrency, a growing number of donors are now sitting on appreciated crypto holdings and seeking places to donate them. In the past, donors would have had to recognize capital gains and pay taxes when they sold their cryptos to raise funds for a cause, but now the IRS treats these donated cryptos like stock and allows donors to claim up to the fair market value as a charitable donation.

In addition, many cryptocurrencies are backed by groundbreaking technology called blockchain. This system creates and records digital transactions in a decentralized network, making it secure and trustworthy. As a result, these digital currencies have the potential to increase in value over time, which can provide future earning potential when donated to nonprofits.

Combined with the fact that Millennials are a generation that prioritizes philanthropy and seeks creative ways to make an impact, it’s easy to understand why so many of them are turning their attention to crypto. Nonprofits that take the right steps to audit their donation pages, streamline crypto onboarding and align messaging with donor expectations will have an early-mover advantage and reap the rewards of tapping into this new philanthropic frontier.