Just like any other industry in the world today, nonprofits are looking for new ways of becoming contemporary. Getting as many modern fundraising methods as possible not only improves the fundraising capabilities of a nonprofit but also allows organizations to become competitive in the modern environment characterized by a rush to get the right donors. This can be seen in the receptive nature around cryptocurrencies, that is evident through the industry startups. Startups are now designing programs that make cryptocurrency fundraising and donations simple and nonprofit organizations that are now opening up for donations in the form of digital currency. From these developments, it is now clear that the future of philanthropy lies in digital fundraising.
Some of the most prominent nonprofits in the world such as the United Way and Red Cross, are now accepting Bitcoin donations. On the other hand, Unicef has, in the past, announced a cryptocurrency fund that is geared towards helping the UN children’s agency to receive, hold and disburse donations that is in the form of bitcoin or ether according to the information in the agency’s official website. These are just a few among nonprofits that have taken the lead in using cryptocurrencies in their fundraising activities.
Many reasons have led to the surge in cryptocurrency donations. One of these reasons is the anonymity that is assured by blockchain, the basis in which cryptocurrency is built on. With cryptocurrency, donors can contribute to a specific cause without worrying about the exposure of their identity. Another reason is the reduced cost associated with no capital gains taxes and the ability to donate to a nonprofit of choice regardless of the political borders.
Although only a few nonprofits have adopted digital currency in their donations, it is just a matter of time before we start seeing most of them doing so like they are accepting credit cards, online payments, and mobile payments. The usefulness of crypto donations can be seen with the role it has played in fighting the current coronavirus pandemic. As the virus continues straining communities, cryptocurrency donations from various philanthropists have been streaming to different nonprofits. These donations are now used to purchase personal protective equipment (PPEs) and things that are necessary for hospitals as well as supporting people who are facing difficulties occasioned by the pandemic.
Blockchain is offering security, low transaction cost, and transparency, among others. All of which have always been the desire of both the donors and charities. With this technology, philanthropic initiatives will be significantly improved through the ability to track the way donations are used. This removes the aspect of corruption, that has for long been scaring away donors. Accordingly, since the crypto-based transactions are borderless, the time barrier will be eliminated, meaning that specific initiatives can be funded almost instantly with little or no fees, that are usually associated with cross-border transactions. This means more donations will occur, and charities will get more money to support their initiatives.
As the world adopts this type of technology in other industries, nonprofits should strive to ensure that they are part of the change by accepting digital currencies that have become common in the world today in their donations. This will undoubtedly increase their donor-base and help move giving forward.