Other nonprofit organizations are also following suit by accepting donations in cryptocurrencies. Although many people in this space are wary of digital currencies, the technology has proven its worth already. Since it is still in its initial stages, many nonprofit organizations are staying away. However, the ones that have an active strategy to engage professionals and the cryptocurrency community are succeeding in the adoption phase. Some of the organizations that already accept crypto donations include Lupus Foundation of America, United Way, Mercy for Animals and Human Rights foundation among others. Others are still fearful of this currency and convert it into dollars or euros as soon as they receive donations in the form of cryptos.
As cryptocurrency users cross the 50 million mark, some users are finding it easy to use this currency as it eliminates taxation issues, meaning that their contribution will now make more impact in society. The Giving Block, an organization which helps nonprofits adopt digital currency, states that this is the case mainly for early adopters that have highly appreciated assets. The adoption of digital currency by some organizations such as UNICEF has altered the view of other NGOs most of which are now working on strategies to incorporate it. They are now learning the type of currencies to adopt and whether they should hold it in digital form or convert their donations to standard currencies.
Only 2% of Nonprofit organizations in the US, Europe and Canada now accept crypto donations. However, Africa and Asia are leading with 5% and 4% respectively according to a 2018 report by Global Trends in Giving. The main problem that many nonprofits specifically, in the US, Europe and Canada face are regulations. Although some organizations may want to exploit this new source of donations mainly from young donors, most of them are affected by existing laws. According to The Giving Block, accepting digital currencies is difficult for many companies despite the market cap for cryptos rising. First, many nonprofits do not know where to begin. Secondly, majority of the nonprofits do not recognize the potential that digital currencies offer. Thirdly, they fear the risks associated with cryptocurrencies that can either be real or perceived.
Regardless of the fears that many nonprofits have in accepting donations in digital currencies, it is worth considering as a source of money to finance operations. Like any other digital innovation, however, nonprofits should start accepting donations with caution. When selecting your wallet for donations, you must carefully consider the fees, operating system compatibility, privacy rules and control over your donations. Nonprofits should also look into the tax implications, financial effects and potential reputation risks associated with accepting cryptocurrency. This type of currency is volatile and so it can change quickly. Nonprofits should, therefore, treat digital currencies as donations and not investments. They should therefore convert it as soon as they receive to avoid risks.