Major U.S. charities are increasingly allowing donors to contribute in bitcoin. The Wall Street Journal on Monday explored why charities such as the American Red Cross, Greenpeace and Save the Children are accepting bitcoin in an article titled, “Brother Can you Spare A Bitcoin?” The report ran in the newspaper’s “wealth management” section.
In late 2012, when bitcoin was at its peak value, nearly 30 charities raised more than $1 million in a “Bitcoin Black Friday,” according to a spokesperson for the BigGive Foundation, which organizes charitable activity among bitcoin users. The organizers marketed these events on Twitter, Facebook and Reddit.
Even more charities participated in a “Giving Tuesday” last December, the article noted, although a lower bitcoin price delivered a less money.
Nonprofit sector warms to bitcoin
The article noted that charities are following merchants in accepting bitcoin, in part because the transactions carry lower costs than credit and debit card payments.
Save the Children has accepted bitcoin donations since 2013 when a typhoon hit the Philippines. Bitpay processes the donations and converts the gifts to dollars. BitPay does not charge a transaction fee for charities or donors, so the nonprofit gets all the proceeds.
Rossetti also noted that bitcoin allows the charity to stay relevant to current and future generations of donors.
Save the Children bitcoin campaigns have raised nearly $10,000. Rossetti said these are donations that the charity might not have otherwise received.
Most charities that accept bitcoins use processing services that exchange some or all of the bitcoin for cash at the time of the donation and pass the cash to the charity. This reduces uncertainty about bitcoin price volatility.
Helping charities stay relevant
Elizabeth Polshay, a BitPay account manager, said bitcoin allows a charity to tap a new pool of donors. It also gives the charity an opportunity to rebrand itself.
Polshay further noted that because of the low transaction fees, bitcoin makes it easier for charities to accept low value donations.
The American Red Cross began a partnership with BitPay last year, the article noted. A Red Cross spokesperson said the charity noticed a lot of support for disaster victims voiced on bitcoin social outlets.
Bitcoin holders can take capital gains or losses on their holdings rather than have bitcoin treated as currency, the article noted. As with stocks, it makes sense for donors to give bitcoin that has appreciated in value to avoid paying capital gains.
The article noted that donors should ask for receipts for their bitcoin contributions, as with any charitable gift.