Charities can benefit from accepting digital currencies. Some entities already do so, whereas others remain on the fence. Although this new form of money can increase the number of overall contributions, certain risks remain in place.
Charities See Merit in Bitcoin
For charitable organizations, raising funds for social good has always been challenging. Especially since the latest financial crisis, donations appear to be declining slightly. For these organizations, tapping into additional streams of contributions is the next logical step. The role of cryptocurrencies cannot be overlooked in this regard. Bitcoin is gaining a bit of traction in this department.
Despite the volatile nature of cryptocurrencies, accepting them makes a lot of sense on paper. Smaller charities have taken the plunge in this regard. Some charitable organizations even focus specifically on cryptocurrencies, which is slightly riskier. Digital money donations have surged throughout 2017, although it is unclear if 2018 will yield similar results. This year has been very bearish for all currencies, reducing overall spending.
The big question is how these charities handle cryptocurrency donations. In most cases, the transactions are converted to fiat currency right away. It is unclear if all charities take the necessary step in this regard. Waiting to convert these transactions can yield profits, but also steep losses. Any donation not converted last year will be worth a lot less at this point in 2018. It is a deficit that needs to be taken into account at all times.
A Promising Trend for the Future
The adoption of cryptocurrencies by charities is a positive sign. These organizations consider Bitcoin and top altcoins to be a form of money, rather than just an investment. Otherwise, they would not accept such transactions. The borderless nature and low fees are two further selling points of Bitcoin and other payment methods.
Additionally, this is a logical step in the evolution. Wealthy donors do not always write a check to contribute to a good cause. Instead, they can resort to passing along assets. Whereas stocks and bonds are transferred on a regular basis, cryptocurrencies appear to be a natural fit in this digital age.
Not all donations are done out of the kindness of one’s heart. Assets which rise in value provide additional tax benefits for donors. As such, cryptocurrencies have become a lot more interesting in this regard. Even so, the end result is the same for charities. More donations mean helping more people, regardless of the reasoning for the contribution. Charities such as Fidelity Charitable, Vanguard Charitable, and Schwab Charitable are some entities reaping the benefits from accepting new payment methods.
What effect do you think charities adopting cryptocurrencies will have on their acceptance overall? Let us know in the comments below.
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