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With the holiday season approaching and cryptocurrencies led by bitcoin (BTC) surging in price, charities are warming to the opportunity to accept donations of the digital tender.
Slated for Dec. 1, the crypto rendition of the annual worldwide charity event #GivingTuesday – #BitcoinTuesday – is back for another year, spearheaded by crypto donations platform The Giving Block.
According to the organization, while last year’s Bitcoin Tuesday event managed to attract only 12 non-profits, this year over 120 such organizations including Save the Children, No Kid Hungry and The Tor Project have signed up for the event. The non-profits will accept donations in cryptocurrencies such as bitcoin (BTC), ether (ETH) and litecoin (LTC), among others.
“In general, as the price goes up, you see a lot more donations. And we saw that happen a lot in 2017,” said Alex Wilson, co-founder of the Giving Block, adding that donations may even rise because people may look to offset their tax liability amid rising prices for crypto assets.
While charity is its own reward, making the donation in cryptocurrencies can help users avoid some capital gains taxes they might otherwise have incurred had they cashed out their crypto and donated fiat, tax experts have noted.
Since cryptocurrencies are treated like property by the Internal Revenue Service (IRS) and some other tax agencies around the world, taxable events occur every time a user converts crypto to fiat.
But like stock donations, users can donate cryptocurrencies, get a tax write off-and not have to worry about paying capital gains tax on the cryptocurrency they donate.
Hope for Haiti, a nonprofit organization which works toward improving education, health and water facilities for residents of the Caribbean nation, is one the charities accepting crypto donations. According to the non-profit’s CEO, Skyler Badenoch, the idea was in part spurred by a need to diversify donation sources. So it did some research on the market.
“We know how much litecoin it would take to pay a teacher’s salary, we know how much XRP it would take to plant a tree,” said Badenoch. He noted that the non-profit is also keen on exploring how blockchain technology can help add transparency to the charity sector.
A non-profit focused on tackling child hunger in the United States, No Kid Hungry, is another organisation which will be taking part in the Bitcoin Tuesday campaign. The non-profit, similar to Hope for Haiti, also indicated that it swaps gifted crypto for fiat upon receipt.
“Similar to stock donations, we convert cryptocurrency donations into U.S. dollars immediately,” said Diane Clifford, managing director of constituency development at No Kid Hungry.
A Bitcoin tradition
In addition to the Giving Block campaign, users can also make crypto donations through BitGive.
Founded in 2013, BitGive helped co-host one of the first Bitcoin Giving Tuesday events in 2014 and has since continued to support charities in the United States and overseas. The first crypto-specific registered non-profit organization, BitGive uses the Bitcoin blockchain and RSK sidechain to help donors seee where the money is going.
“We tackled these more simple concepts many years ago,” said founder Connie Gallippi. “We are excited to now have grown and developed a sophisticated platform leveraging the technology directly and demonstrating the beauty of bitcoin and blockchain to a mainstream audience.”
Since those early days, BitGive has added a layer of transparency through its GiveTrack tool, allowing donors to follow the money and see where and how it is allocated. Some of its most recent project announcements include partnerships with Heifer International, an organization that works to eradicate hunger and poverty, and Black Girls Code.
In an effort to give newcomers to crypto donations an easy way to donate, BitGive has announced that donors can now make donations on its GiveTrack platform using credit/debit cards or Apple Pay through Wyre.
“Our platform will automatically convert their donation into bitcoin and send BTC to the charity’s wallet,” said Connie Gallipi, founder of BitGive, in an email. She added that this way mainstream users who never owned cryptocurrencies could take advantage of the blockchain-associated transparency without the hassle or friction of having to buy some.