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Yes, crypto. That thing you have been meaning to get smart on for months now. The procrastination is understandable, the prospect of wrapping your head around the topic can be daunting. After all, crypto is an emerging technology and sub-sector with all kinds of acronyms, buzzwords, concepts, and eccentric jpegs. But we are here to break down what you need to know about crypto, why it can help your organization, and what to do now in order to catch the wave.
The crypto boom
People are increasingly shining a light on crypto in everyday contexts. This is happening for good reason: the crypto market is currently valued at over $1 trillion globally. The value of a single Bitcoin, virtually worthless 10 years ago, recently reached a peak of over $69,000 in November 2021.
According to an annual report by Gemini, a popular crypto trading platform, 21 million Americans own some form of crypto today, and 19.3 million say that they will buy some within the next year. Moreover, around a third of millennials have a position in crypto, and that number is likely to rise over the coming years.
Why your organization should pay attention
Several high profile organizations in the impact space have been accepting crypto for years, such as UNICEF and Save The Children, but excitement is finally starting to boil over. Nonprofits of all sizes with all sorts of missions all over the world are inevitably going to be shaped by crypto in the future; and that future is sooner than you may think.
One reason for this urgency is that vast amounts of wealth are being created by the crypto ecosystem now. The pioneers in this space, who are consequently experiencing eye-popping liquidity events, tend to be young, tech-savvy, and hold much of their assets in - you guessed it - crypto.
Importantly, crypto investors are potentially more likely than other investors to make charitable contributions, according to a Fidelity Charitable survey. To court this new sought-after philanthropic cohort, a growing number of organizations are hopping on the crypto bandwagon, or at least contemplating doing so.
Crypto is underutilized as a giving vehicle
Despite record numbers of crypto gifts in 2021, Fidelity points out that only 34% of investors who own cryptocurrencies said they had ever donated them to nonprofits, a number that surely lags far behind those that donate other non-cash assets. There are two key reasons for this gap:
- Donors who own crypto are not aware that they could or should give in crypto: per Fidelity, 19% of crypto investors said they did not know they could give digital assets to charity.
- Not enough nonprofit organizations are able to accept crypto: indeed, 10% of crypto investors report it was “difficult” to find charities that do.
Requesting gifts in crypto pays dividends for nonprofits
Accepting crypto not only opens up access to a new pool of donors, but crypto, as an appreciable asset, can actually accelerate fundraising growth to supplement cash holdings. In fact, nonprofits that accept non-cash assets can grow up to six times faster than those that do not. And crypto assets, despite being somewhat volatile, are positioned for high growth over the next 5-10 years, at a rate that some believe will outpace traditional assets.
Embracing crypto giving can differentiate your organization and signal its commitment to technology and innovation.
More than 90% of nonprofits lack a way to accept crypto donations, let alone define crypto giving as part of their development strategy. Gaps in technological expertise and conveying that story to donors, real and perceived, can dissuade nonprofit leaders from investing in these areas. And, this volatile asset class can have a tendency to spook nonprofits who may need help allocating and managing a diversified investment portfolio in the first place.
That’s where Infinite Giving comes in. We not only enable your organization with the technological tools to accept crypto, but we want to be your strategic partners in unlocking the full crypto opportunity amongst your current and potential donor base.
Since maintaining a crypto position can make a portfolio more volatile, we recommend liquidating cryptocurrency upon receipt and reinvesting into a diversified portfolio. We can help you think through the scenarios and parameters around liquidating crypto into cash upon receiving gifts as well as navigating the occasional donor who requests you to hold crypto assets.
Looking ahead, encouraging donors to give in crypto will certainly be a bigger part of organizations’ fundraising push, and your organization needs to be ready to tell that story.
This post was written by Zach Fisher an ever-curious business strategist, investor, and occasional freelance writer with a passion for social impact.
