In 2017, an anonymous Bitcoin user decided to create a donation fund called The Pineapple Fund to distribute 5,057 BTC. At the time, the amount was equivalent to $86 million, which shocked the crypto industry.
Since then, doing charity using cryptocurrencies has become a trend among both multi-million-dollar investors and retail crypto enthusiasts who simply want to contribute to a better world.
In this article, you will discover different ways to donate cryptocurrencies to different charities.
Cryptocurrency Charity – A New Trend
Several charity entities around the world are benefiting from the progress of cryptocurrencies as more nonprofit organizations are starting to accept donations in Bitcoin, Ethereum, Litecoin, Cardano, and Monero. Even though the main crypto products, such as spot trading, options trading , futures at Binance Futures, and NFTs, still register a lot more movement than crypto donations. And that’s not surprising at all.
An estimated 4% of charity entities around the world currently accept cryptocurrency as donations, with UNICEF Crypto Fund breaking records by becoming the first UN organization to receive crypto back in 2019.
Stablecoins seem to be more reliable alternatives when it comes to crypto philanthropy. Pegged to real-world assets like the US dollar, donations using Tether (UDST) or HUH Tokens are less vulnerable to volatility.
When donated to people in countries affected by high rates of inflation, stablecoins also offer financial stability amid financially chaotic scenarios.
Feasible Ways to Donate Cryptocurrencies to Charities – Bitcoin Donations or Cash Donations?
Many may argue that donating cryptocurrency is quite complex. Let’s take Bitcoin as an example. Around the world, regulators still need to catch up with Bitcoin’s evolution. Bitcoin’s price is extremely volatile in terms of price.
Also, holding the world’s most valuable digital currency within standard crypto wallets may expose it to hacks. Depending on the user’s location, tax compliance is tricky. For these and other reasons, most institutions are likely to prefer fiat currency donations.
However, according to Evan Fox, manager of the tax department at Berdon LLP, cashing out crypto before donating may not be the best choice for most individuals.
According to Fox, “If you bought [bitcoin] for $1,000 and the coin is now worth $10,000, if you were to sell it, you would have $10,000 in cash.” The problem, however, is that depending on your jurisdiction, “the taxes can be 35%, if not a little more. So if you take 35% of $10,000, you are left with $6,500 in cash.”
If you donate directly in Bitcoin, on the other hand, your donation will be tax-free, and even the higher fees paid to miners and payment processors like BitPay could not reduce the donation amount as much as taxes.
Therefore, even if the price of Bitcoin may drop drastically, few charities are likely to keep donations in the form of cryptocurrency for long.
The Best 5 Ways to Donate Cryptocurrencies to Charities – Proven Entities Only
United Way Worldwide
United Way Worldwide is a non-profit organization that encompasses many other non-profit organizations operating in many countries, with goals ranging from improving the quality of the education system in different countries to expanding access to healthcare around the globe.
Since 2014, United Way Worldwide began accepting Bitcoin donations to support its operations, becoming one of the world’s largest privately held non-profit organizations by raising more than $5 billion yearly.
The Wikimedia Foundation is a non-profit organization responsible for Wikipedia and several related projects, including Wikimedia Commons and Wiktionary. Currently, it is possible to donate several types of cryptocurrencies to the entity using BitPay, such as Bitcoin, Bitcoin Cash, and Ether.
Open Medicine Foundation
Open Medicine Foundation is a US-based non-profit organization that conducts research in chronic diseases, mostly focused on studying chronic fatigue syndrome, fibromyalgia, myalgic encephalomyelitis, and Chronic Lyme Disease.
This entity was one of the organizations that received a $5 million bitcoin donation from the Pineapple Fund.
Watsi is a non-profit organization that operates a crowdfunding platform focused on enabling individual donors to directly fund medical care for needy people in developing countries that lack affordable medical care.
Give Directly’s mission is to make unconditional, direct money transfers to the world’s poorest people. By direct transfers, they mean the transfer of financial resources involving no intermediaries. Give Directly works directly with the people who will receive the money, thus preventing the money from being misappropriated due to corruption or administrative inefficiencies, for example.
Are Crypto Donations Changing the Way People Do Charity? – Final Thoughts
At a glance, it is easy to see that the next stage of its evolutionary progress is donations to various charities using cryptocurrency.
Likewise, crypto-based donations are also experiencing an exponential rise in popularity. Around the globe, generous donors who wish to support a charity of their choice can now donate cryptocurrency or gift digital assets to a growing number of organizations, with considerable benefits for both parties involved.