The New Fundraising Frontier: Cryptocurrency
Looks like cryptocurrency is here to stay. And, yes, it’s time for all nonprofits to get set up to receive donations in the form of cryptocurrency. Because there are plenty of donors with appreciated crypto investments.
Yes, cryptocurrency is a new technology, and many people are dubious about it. It’s volatile, and considered to be high risk. But the market is growing rapidly.
Consider that investors in cryptocurrency tend to be younger, very digitally literate and financially sophisticated. And to be frank, because of large profits, many of these investors DO need the tax deductions and write-offs that come from making charitable contributions.
Let’s unpack this.
First of all, what is cryptocurrency?
It’s the generic term that describes all types of digital currencies. And that includes bitcoin – the most popular cryptocurrency and the one that gets all the press.
Rapidly growing number of investors
Estimates are that 100-300 million individuals are users or investors in cryptocurrency. Interest is high around the world, and only growing stronger.
Even more, the number of cryptocurrency users literally doubled from 2017 to 2019.
And more recently, the market saw a 16% jump in users all in the month of January 2021.
As the crypto market has grown, so have donations.
According to The Giving Block website, cryptocurrency donations equal about $300,000,000 each year.
We are impressed with The Giving Block team and their site. The Giving Block is a technology platform for accepting cryptocurrency donations, and we highly recommend checking it out.
We actually invited one of the Giving Block co-founders to tell our Insiders members about crypto fundraising – and it was certainly fascinating.
Why would we be interested in crypto-investors as potential donors?
Many crypto users are enjoying very, very high profits. They really do need the tax deductions that come from charitable contributions.
As of today, July 1, 2021, Bitcoin has appreciated 286% in only one year, since July 1, 2020. This amount of profit is hard to imagine.
If an investor wanted to convert some of his bitcoin to regular cash, he would incur substantial capital gains taxes. Therefore, why not make some gifts to offset the substantial tax burden?
The GivingBlock experts say that many investors are literally shopping around for charities to support. Check out the list of registered nonprofits on the Giving Block site, and you can see that there are under 300.
Fascinating demographics of cryptocurrency investors.
Consider this new demographic of potential donors. Cryptocurrency users – and crypto donors – are generally in the Millennial and Gen Z demographic.
- Over 60% of cryptocurrency users are under the age of 40. And many of these may be crypto millionaires.
- Approximately 74% of crypto investors are male. And remember, they are younger, as mentioned above. What an interesting new donor demographic to go after!
In addition, The Giving Block site says that 43% of millennials prefer crypto investing to stocks, with many holding highly appreciated crypto that they can donate each year for tax purposes.
Target a fundraising campaign directly to crypto investors.
It’s actually possible to craft a campaign targeted specifically toward crypto users.
Our new friends at The Giving Block site are helping several national charities launch these campaigns, and are seeing pretty amazing results.
Bottom Line: What this could mean for your organization.
We know. This is a bit mind-blowing. Not only is there a largely untapped market of very wealthy young individuals. But very few nonprofits are out there in front of these donors. It’s up to you and your institution to move now to capitalize on this new market. If you’d like to learn more about cryptocurrency and get set up to be listed on The Giving Block’s website – click here.
As always, it is a pleasure to share our weekly news and insights with you as we cover new fundraising trends.
If your organization is planning a capital campaign or launching a major gifts program – we can help. Send an email to firstname.lastname@example.org if you’d like to schedule a free strategy call with us.