Cryptholders sharing the joy
Cryptocurrencies began as a disruptor to traditional finance, now crypto holders that have seen their wealth grow are willing to share and reshape philanthropy. NPOs are adapting and preparing to participate in the giant crypto donations market, a transformative force for charities, offering new ways to give, operate, and innovate. With Christmas coming up, why not give something to those in need and receive some positive consequences?
Why does crypto work for charity?
A big part of donations is built on trust, meaning that donors want to make sure their donations go to the right place. Blockchain technology ensures that donations are traceable and tamper-proof. Donors can follow their funds from the moment they are contributed to the final allocation, combating corruption and enhancing reliability.
Cryptocurrencies break down traditional barriers like currency exchange and banking fees, enabling donors worldwide to contribute directly and instantly. This accessibility expands the reach of charities into previously untapped regions. High-net-worth individuals and private donors often value discretion and anonymity. Donations using cryptocurrencies allow them to give without revealing their identities, balancing privacy with impact.
More than half of the 100 largest US charities now accept cryptocurrency. As of early 2024, the cumulative total of cryptocurrency donations in the United States surpassed $2 billion. There are an estimated 580 million crypto investors worldwide as of last month and high-income earners are disproportionately represented among them. The average size of crypto donations in 2022 was $6,295, which is over 30 times bigger than the average donation in fiat, which was $204. Crypto donations were already popular back in 2020 when almost half of all crypto owners donated $1,000 or more to charity. It's a growing market, so why not join?
In many countries, crypto donations are tax-advantaged, as they are often treated as property rather than cash. Donors can deduct the asset's fair market value while avoiding capital gains taxes, making it a financially savvy way to give. In the US for example, by deducting the gifts from your taxable income, your tax is calculated on a lower amount, which can lower your total tax. The same thing goes for the UK, Sweden, Germany, Australia and many more.
A growing market
Major non-profit organizations now accept crypto donations, leading the way for other nonprofits to explore this innovative funding method.
The biggest charity organisations:
Binance Charity Foundation - Focuses on transparency in donations through blockchain technology, supporting global causes like education and disaster relief.
The Giving Block - One of the biggest actors on the market, and one of the first crypto donation spaces. Connects nonprofits with crypto donors, enabling organizations like Save the Children and No Kid Hungry to accept cryptocurrency and support global causes. However, fees are higher here than everywhere else.
UNICEF CryptoFund - Holds and utilizes cryptocurrencies to fund open-source technology that benefits children worldwide.
Save the Children - An early adopter of Bitcoin, using crypto to support humanitarian programs globally.
American Cancer Society - Partners with The Giving Block to accept crypto donations for cancer research and patient support programs.
CryptoRelief - A fund that made headlines during COVID-19 by addressing healthcare needs in India, demonstrating crypto's potential in crisis response.
Global leaders in crypto charity
The US leads the charge in crypto charity, hosting a vast array of organizations such as UNICEF CryptoFund and Save the Children. Tax incentives for crypto donations play a significant role in this growth, offering financial benefits to donors while encouraging contributions.
Europe presents a mixed picture, with nations like Switzerland and Germany spearheading the movement thanks to their crypto-friendly regulations. Initiatives such as the EU’s MiCA Regulation, aim to harmonize rules across member states, creating a more stable environment for crypto philanthropy. The problem remains in scepticism about cryptocurrencies in many parts of the region, which could slow broader acceptance.
Africa & Asia
In Africa, cryptocurrencies are proving transformative by overcoming weak financial systems and high remittance costs. Platforms like Paxful and Binance Charity are facilitating donations for essential causes, including education, healthcare, and food security. For example, crypto donations have been used to support food relief and educational initiatives in countries like Uganda and Nigeria.
Platforms such as GiveDirectly have piloted direct cash transfer programs in Kenya and other countries using cryptocurrencies, bypassing traditional banking systems.
Asia, a hub of blockchain innovation, is leading in the creative uses of crypto for charity. Nations like Singapore, Japan, and South Korea have seen exchanges like Binance and Huobi run targeted campaigns for regional crises. A standout example is India’s CryptoRelief Fund, which mobilized significant resources during the COVID-19 pandemic, highlighting the power of crypto in addressing urgent humanitarian needs.
The challenges of crypto charity in developing regions
Despite its potential, the integration of cryptocurrencies in philanthropy faces notable hurdles in less-developed regions. Limited internet access and low crypto literacy restrict the ability of nonprofits to adopt blockchain solutions effectively. Regulatory ambiguity in many countries creates hesitancy among organizations that might otherwise embrace crypto donations. For example, Malawi's internet usage reaches only about 16% of its population, with many people relying on basic mobile connections. These conditions make it difficult for nonprofit organizations to implement blockchain solutions effectively.
Volatility remains a critical concern, as the fluctuating value of digital currencies can impact the actual donation amounts, complicating planning for long-term projects. We can see this in Ukraine, where donations have played a crucial role in Ukraine's humanitarian and defence efforts, raising over $100 million in digital assets since the onset of the war in 2022. However, the volatile nature of cryptocurrencies presents challenges that can significantly impact the value and timing of these contributions. For instance, donations made in Bitcoin or Ethereum are subject to market fluctuations, potentially diminishing their value if not converted to stable assets or fiat currency immediately.
Crypto’s future in charity
As cryptocurrencies become more mainstream, their role in charity is expected to grow. Key drivers will include clearer regulations, increased crypto literacy, and wider adoption by nonprofits. Get in touch with us if your organisation is interested in joining the progressive nonprofit that reaches a new wealth of donations by accepting cryptocurrencies.