Nonprofit organizations often require diverse revenue streams to fulfill their missions. The more revenue streams, the more income to fulfill a nonprofit’s mission. Like many other types of organizations, it’s evident nonprofits experienced a decline in fundraising amid the Covid-19 pandemic. In fact, due to the pandemic shutdown, 83% of organizations’ revenue was lost from canceled events and closed operations.
Popular revenue streams for nonprofits included individual donations from traditional mailings and telemarketing in the form of cash, check, and credit cards. As digital usage continues to expand globally, nonprofits must adopt technology and digital platforms. The organizations that adopt technology can reap astronomical gains by integrating cryptocurrencies as donations in the investment portfolio.
Using Technology as Currency
A cryptocurrency or “crypto” is a decentralized digital currency that can be used to buy goods and services but uses an online ledger with strong cryptography to secure online transactions. Ultimately, “cryptos” works using blockchain technology, distributed across many computers that manage and record transactions. There are thousands of different cryptocurrencies available today. Bitcoin, Ethereum, Litecoin, and Dogecoin have great potential to store and grow value for the investment portfolio.
A Variety of Cryptocurrencies
- Bitcoin – Bitcoin is a digital currency that can be sent from user to user on a peer-to-peer network.
- Ethereum – Ethereum is a decentralized, open-source blockchain that utilizes smart contracts.
- Litecoin – Like Bitcoin, Litecoin is also a peer-to-peer cryptocurrency.
- Dogecoin – Dogecoin is a cryptocurrency similar to bitcoin’s features, created in 2013 to mock cryptos. but is now viewed as a legitimate investment. As Elon Musk states often, “Fate loves irony.”
Why Accept Cryptocurrency as a Donation?
Cryptocurrency is very volatile, meaning it is high-risk but reaps high reward when it’s donated. For instance, Bitcoin is up (roughly 7,000%), as of 6/4/21, the past 5 years, and about 10 years ago, one bitcoin was worth $250. Long story short, one bitcoin reached an all-time high of $63,000, April 2021.
Who Uses Crypto?
The majority (74%) of cryptocurrency investors today fall between the ages of 25 and 44, with another 19% between the ages of 45 and 55. Today, more than 21.2 million adults, or about 14% of the U.S population, own cryptocurrencies such as Bitcoin or Ethereum, and the number of investors is set to double this year.
How to Obtain Cryptocurrency Donations?
Cryptocurrency can be accepted as donations just like traditional stocks. Accepting cryptocurrency is universally accessible for any organization. For instance, Coinbase, a cryptocurrency exchange platform, is a service that will convert digital currency to local currency. By creating a Coinbase account, just like PayPal or Venmo, organizations can transfer funds from a digital wallet to a bank account. Coinbase doesn’t charge any processing fees for donations to 501©(3) nonprofits and charities.
Integrating Cryptocurrency Donations Through an Existing Marketing Supply Chain
To incorporate cryptocurrency as a donation, a nonprofit should integrate the request for cryptocurrency donations into existing marketing sources. Marketing sources could include social media that tag a link with the digital wallet or printing a link on mailings that encourage donations.
Benefits of Cryptocurrency Beyond Initial Revenue
Adding cryptocurrency to your investment portfolio will reap big gains in the long term. Accepting cryptocurrencies as a donation will show early adoption, grabbing the attention of the public, and attract younger donors to ensure longevity and sustainability for the organization. Ultimately, it’s a way to transition from traditional high-cost mailings and funds to a more modern digital approach.
Some reliable sources and entrepreneurs back cryptocurrencies, so I believe today is the day for your organization to adopt digital assets for the investment portfolio. Cryptocurrency can be environmentally friendly if mined sustainably especially compared to the current financial banking system such as ATMs, banks, etc. which can be used as a marketing strategy. Currently, companies are offering employees to either be paid in normal currency or cryptocurrency, proving its mainstream adoption.
Allcot, D. (2021, April 21). 14% of Americans Own Crypto Right Now – Here’s Who’s Actually Doing It Right. Yahoo Finance. https://finance.yahoo.com/news/study-reveals-crypto-biggest-investors-132102315.html
IndependentSector. (2020, June 15). The Impact of Covid-19 on Large and Mid-Sized Nonprofits. Independent Sector. https://independentsector.org/resource/covid19-survey
Royal, J., & Voigt, K. (2021, January 2). What is Cryptocurrency? Beginners Guide to Digital Cash. NerdWallet. https://www.nerdwallet.com/article/investing/cryptocurrency-7-things-to-know