By now we have all heard about the expansive world of cryptocurrency, NFTs and blockchain technology. Crypto has disrupted what we know about currency and the digital economy and despite its volatility, cryptocurrencies provide a unique opportunity for businesses and fundraisers alike. As crypto starts to break into nonprofit fundraising you may be wondering what role it will play or how your organization can get involved. Crypto - despite seeming trendy - offers a real opportunity and nonprofits should consider capitalizing on it.
For nonprofits that are interested in dabbling in the world of crypto, we can learn from Pursuant client Pediatric Brain Tumor Foundation (PBTF) and their journey accepting crypto donations. We recently sat down with members of the team and they shared five key considerations for getting started.
Advice from the Pediatric Brain Tumor Foundation: Find the right crypto platform for your organization - It is important that before your nonprofit gets involved with crypto that you have an established partnership with a crypto processor. In short, crypto processors provide a platform for your organization to easily and quickly receive crypto donations. Additionally, it makes individuals that hold crypto assets aware that you are receiving donations.
After partnering with The Giving Block, the largest crypto donation processor - PBTF was able to launch their first digital campaign seeking crypto donations. According to PBTF, partnering with The Giving Block made it not only possible to receive crypto donations, but simplified the process as The Giving Block provided them with the step-by-step process to get involved and supported them in their efforts to promote PBTF as an organization that is receiving crypto donations. Other processors include Endowment, Engiven, and Bitpay, however there are many processors available for your organization to choose from that fit your needs.
Partnering with the right crypto processor can have a significant impact on the gifts your organization receives. Since launching in late 2021, PBTF has received 10 crypto gifts, amounting to an impressive $42K in revenue received so far.
Develop a communication plan - Spread the word to your current donor base and expand outwardly to the communities that are most interested and involved with crypto. Utilize platforms where these communities exist and provide details about how they can get involved with your organization.
For example, in the beginning of PBTF’s crypto journey, they utilized platforms like Reddit and Twitter to promote their crypto campaign in late 2021. These platforms, according to their internal research, have established crypto trading communities that gave PBTF the ability to quickly promote and reach the target audience.
Don’t think about crypto as a currency - It is important to think of crypto more like a stock or a Donor Advised Fund (DAF). The value can fluctuate over time or even day-to-day. In some cases, depending on the crypto processor your organization chooses to use will determine how it functions as a donation.
In PBTF’s experience, Endowment acts as a DAF in that it provides donors the chance to give to a cause rather than to an individual nonprofit. Then the gifts are shared amongst nonprofits that fall into that cause category. For example “children” or “health” could be causes and each organization shares a percentage of a crypto donation.
Determine if you want to receive donor information or keep it anonymous - Understand that your organization has the option to receive crypto donor information or not. With crypto gifts amounting to larger gifts - depending on when they are traded - you may want to receive the donor’s information to probably thank and steward them. According to The Giving Block, that is entirely up to your organization when you are setting up your crypto processor.
Determine if you will hold or liquidate crypto assets - due to the change in value of crypto, it is important that your organization considers whether you want to hold onto these assets or convert them to cash immediately. Payment processors will make it easy for your nonprofit to immediately convert crypto assets to cash, but in some cases your nonprofit may see it more fitting to hold onto the assets for a high return down the road.
For PBTF, they believe it is within their best interest to immediately liquidate assets. They want to keep the donor’s intentions in mind when the gift was made. In other words, when the crypto donation was made PBTF determined that the donation should be processed at that day’s current trading price. They said, “ we do not want to take a gamble on the donation and see the exchange rate fall below what was initially intended to be a gift and payment processors like The Giving Block have made it easy to immediately transfer crypto to cash for us.” However, that is not what your organization must do when it comes to converting crypto assets. If you would rather hold on to crypto as an asset you have that choice.
Want to learn more about how you can fundraise with crypto? View our webinar with Pat Duffy from The Giving Block.