Why Accept Cryptocurrency Donations?
Have you ever thought why a charity or a nonprofit organization would want to use cryptocurrency in the first place?
If you are a member of either one of those, you would already know how hard it is to find new and creative ways to fund your mission.
It is a grueling process.
Various charities have distinctive forms of fundraising depending on their mission, the region they are operating in and other circumstances.
However, some key fundraising determinants remain the same: fast and reliable transfer of money, access to global funding, easy to use platforms for donors.
The ultimate philanthropic potential of accepting cryptocurrency as donations may lie in the developing world where high bank fees, slow transfer periods which sometimes taking weeks to settle; long lists of documentation, exchange rates, and other factors may also be a significant hindrance for international donors.
Key Features of Cryptocurrencies
With all this in mind, I shall now explain to you the relevance of the blockchain technology (the underlying technology of cryptos) in relation to charities and philanthropy.
The blockchain technology offers new opportunities for donors to give and for charities to raise funds. This poses an exciting and flexible way of connecting both sides that deserves exploring, especially when we consider the ubiquity and importance of the Internet, as well as the undeniably positive characteristics of blockchain that I’m going to present below.
Transparency and trust
In case you didn’t know, the blockchain ledger is public, so payment systems that are based on the blockchain allow all users to oversee the transactions, making the system itself very transparent.
This characteristic, along with the fact that blockchain technology removes the need for third parties to monitor the transactions, could very well be at the basis of a stable financial system entirely based on trust between its users.
The independence from overseeing third parties also plays a role in reducing the transaction costs, since the blockchain ledger relies only on its users for ownership and maintenance.
Let me rephrase that illustrating a common example.
If there’s supposed to be a middleman between the users, who is in charge of monitoring and validating the transaction (like banks are in the case of fiat money), the traffic needed for completing a single transaction would drastically increase, thus increasing the final cost each user pays per transaction.
Another crucial feature of the blockchain technology is the detailed and versatile representation it provides. It can document virtually any tangible or intangible asset, and do so in such a way that enables for the asset’s ownership status to be quickly and correctly determined in any given point in time, all the while providing a digital payment mechanism to go along with it.
Cryptocurrency clearing and settlement happens within minutes, sometimes even seconds, depending on the cryptocurrency you’re dealing with, and this can make an immediate difference in funding the efforts of nonprofits with very time-sensitive missions, such as disaster relief.
Easy access to global funds
Crypto’s are global and recognize no state boundaries. Accepting Bitcoin, Etherium, Litecoin or other cryptocurrencies instantly creates a possibility for your fundraising to go international and gives you access to donors from all over the world.
Donors want to stay anonymous for various reasons and it seldom happens. Sometimes they want to donate significant amounts of money and don’t want to attract media attention.
Maybe, they live in states under authoritarian rule and can’t be seen to give to various causes; or they do not want their atheist family to know they regularly donate to the church community or whatever the reasons may be, cryptos can solve this problem.
Bitcoin is pseudonymous in the sense that wallet addresses are not necessarily tied to personal ID and the funds circumvent the banking system.
Other currencies like Monero or ZCash are entirely anonymous and slowly catching up.
Up next, I’ll show you how to set up a bitcoin wallet. Read on!
How to Accept Cryptocurrency Donations?
Are you feeling a tad bit hopeful about cryptocurrency now? If you happen to be interested and you are considering on accepting cryptos for your charity, the next question is quite predictable- how though?
Trust me, it’s pretty simple.
All you need to do to start getting cryptos is to create a wallet. The step-by-step process of opening a Bitcoin wallet is clearly illustrated in our article on how to gift bitcoins.
After you open your wallet and get your public address, the next step involves sharing your address with your donors! You may do this by merely copy-pasting your address on your site or sharing the QR code for a more straightforward method of donations by your contributors.
Also, you should consider using the blockchain.info “tag” function as it will help your organization verify that it is the owner of the address.
This may be the easiest, fastest and most straightforward method of accepting donations but don’t forget to take your safety into account. Cryptos have value, and like anything valuable, they should be adequately secured.
The first thing you need to consider if you are planning to share your public address or QR code on your blog is investing into HTTPS. This will protect you from what is known as man-in-the-middle attack that hackers can exploit on HTTP to change your address to theirs and steal all your upcoming donations without your notice.
You should also consider using paper or hard wallets to secure your finds.
Other Cool Donation Services to Consider
Cryptocurrencies are inherently volatile, and this may be a problem for some organizations. To be dependent on the ever-changing market value of your cryptos and hoping that it will rise in value or at least stay the same might be a dealbreaker for some. This is why you should consider Coingate.
They are well worth checking out as they provide users with the possibility of accepting various cryptocurrencies and instantaneous and automatic conversion into Euros or US Dollars for a small fee of 1%.
As a charity or non-profit organization, or even an independent blogger looking for some support from donors, BitPay can turn out to be your friend.
They have developed a set of tools, like donation buttons or a hosted donation page that make accepting Bitcoin or other cryptocurrencies very convenient. Just sign in and follow their step-by-step tool implementation guide. They also offer automatic conversion into US Dollars and they even have a VISA debit card that you can load with your cryptocurrency and use it as a regular debit card anywhere VISA is accepted.
One of the most, if not the most popular cryptocurrency exchanges in the world is charity friendly. Set up a merchant account and you will get access to several of their features like instant-conversion to US Dollars and of course the donation button generator.
The Coinbase online wallet is one of the most reputable ones out there and it makes accepting donations, conversions and making payments in cryptos as simple as possible.
Learn More and Accept Cryptocurrency Contributions
Cryptocurrencies are garnering an incredible amount of attention in the past few years, and for the less tech-savvy men and women out there, the steep learning curve may appear to be scary at first.
It is indeed a novel and chaotic space, and a certain amount of skepticism is welcomed.
However, don’t let the initial fear of the unknown get to you, as you may miss out on some incredible opportunities! In fact, you should not concern yourself with the details of how the technology works under the hood, or the volatility of cryptos or all the new coins out there!
Moreover, you will not be the first one to do it, as for reference, Wikipedia became one of the first major non-profits to start accepting Bitcoin donations!
Just create a wallet and start acquiring contributions! It’s as simple as that!
Feature image by Irvan Pratama