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Crypto

Generate New Giving With Cryptocurrency

Looking for new ways to generate giving? Cryptocurrency’s rising popularity indicates that it could be an impact avenue to explore.
Karen Houghton
December 4, 2023

Last year, donors gave over $200 million to nonprofits in cryptocurrency donations. Even as overall giving to nonprofits declined, the amount of crypto donations increased. 

If you’re looking for new ways to generate fundraising revenue for your cause, cryptocurrency’s rising popularity indicates that it could be an impactful avenue to explore. Entering the world of crypto for the first time may feel overwhelming, but it doesn’t have to be difficult. Follow these steps to tap into this emerging donation option for your nonprofit:

  1. Learn the basics
  2. Select a crypto donation platform
  3. Promote the option to your donors
  4. Strengthen relationships with cryptocurrency donors

Once you have this process down, you can expand your donors’ options even further by accepting other types of noncash gifts, like stock donations and donor-advised fund grants. Let’s dive in so you can leverage this exciting fundraising opportunity. 

1. Learn the basics

Before you start asking supporters for crypto donations, you need a baseline understanding of what cryptocurrency is and how the donation process works.

Cryptocurrencies are digital currencies that are transferred online and aren’t regulated by a government or financial institution. This makes crypto a global, peer-to-peer currency that can change quickly in market value. The most common cryptocurrencies are Bitcoin and Ethereum, but several others are rising in popularity as well.

Buying and donating cryptocurrency can hold a lot of appeal for donors, and accepting it allows your nonprofit to access a variety of benefits, such as:

  • Engaging high-capacity donors. Many of your nonprofit’s existing and prospective major donors may already own cryptocurrency. By donating it, they not only get a charitable tax deduction for the donation, but they also don’t have to pay capital gains taxes on the crypto’s value appreciation. These tax benefits make donating crypto a more beneficial option for your supporters than donating cash. 
  • Gaining an additional revenue stream. Cryptocurrency donations tend to be large—over $10,000 on average. Just by adding the option to donate cryptocurrency, your organization gains a new revenue stream that could generate these large gifts at any time. 
  • Earning a reputation as a forward-thinking nonprofit. Many nonprofits haven’t started accepting cryptocurrency donations yet, so you’ll be ahead of the curve. When you let your supporters and the wider public know that you’re open to crypto donations and other noncash gifts, they’ll see that your nonprofit is looking to the future and embracing new technology. 

There’s one more important factor you need to be aware of before you start accepting crypto donations and reaping these benefits. Since the crypto market can be volatile, you should convert donated crypto to cash immediately so that its value doesn’t change after you receive the donation. This way, you can accurately gauge your fundraising progress and have a clear picture of your organization’s finances.

2. Select a crypto donation platform

Now that you’re familiar with the basics, it’s time to set up the necessary infrastructure. To accept crypto donations efficiently and provide your donors with a seamless donation experience, you need a donation tool that allows you to accept cryptocurrency on your donation page.

Research crypto donation platforms, and consider which one would be the most beneficial for your organization. Look for a provider that will open a crypto wallet for you, automatically convert crypto donations to cash, and transfer the gifts to your account so you don’t have to. 

Once you get set up with your chosen platform, the process is relatively straightforward. It may vary depending on your platform’s specifications, but Infinite Giving describes the basic steps like this:

  1. You share your giving link with donors. Your platform should provide you with a giving link and wallet QR code that you can add to your donation page. From here, donors simply click or scan the code to make their donation.
  2. The platform automatically converts the crypto to USD. After receiving a donation, your platform should convert it from crypto to cash and send your donor a tax receipt.
  3. Funds arrive in your nonprofit’s account. The platform finally transfers the cash funds to your organization’s bank account. You receive the full market value of the crypto donation at the time of conversion and don’t have to worry about market volatility.

The right crypto donation platform will make the donation process easy for both your organization and your donors. Plus, you can see a record of all crypto donations from an intuitive dashboard within your platform to monitor your fundraising progress.

3. Promote the option to your donors

Even if a donor owns cryptocurrency, they may not be aware that they can donate it to your nonprofit or what the benefits are. This makes it crucial to create a thorough marketing plan once you start accepting crypto donations. 

Use multiple communication channels to spread the word about your new donation option, and emphasize the benefits for donors. For example, you might do one or all of the following:

  • Send a text announcement letting donors know that you now accept crypto donations.
  • Create a page or blog post on your website that highlights the new giving option.
  • Conduct individual outreach to donors you think may be interested in donating crypto based on their giving habits and capacities.
  • Design social media infographics that explain the benefits of donating cryptocurrency and the steps to donate crypto to your nonprofit.
  • Shout out donors who give cryptocurrency on social media or in your regular email newsletter.

You can also highlight cryptocurrency donations within your marketing materials for other fundraising campaigns. For instance, you might post a short video about how to donate cryptocurrency during your GivingTuesday campaign.

4. Strengthen relationships with cryptocurrency donors

Once someone makes a cryptocurrency donation, you need to steward that donor to strengthen their relationship with your organization and retain their support over time. The more intentional effort you put into recognizing and involving that donor in your nonprofit’s community, the more likely they’ll be to stick around and potentially donate crypto again in the future.

Create a donor stewardship strategy specifically for cryptocurrency donors to show your appreciation. Within your strategy, Double the Donation’s donor retention guide suggests thanking donors often, keeping them up to date on the specific impact of their gifts, and asking for their feedback.

For example, say that a donor gives a $8,000 crypto gift to your nonprofit. Your stewardship plan might include immediate email and direct mail thank-you letters, then a personal phone call within a week of the gift. In a month, you invite them to lunch and discuss your gratitude in person, letting them know how many people you were able to help with the gift and how they can stay involved with your nonprofit.

Donors who give crypto, especially those who have been involved with your nonprofit for a long time, may be interested in contributing even larger gifts in the future, like an endowment. Work to keep these relationships strong, and you can maintain the support of crypto donors for the long haul.

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As technology advances and donors’ preferences change, there are bound to be more ways to donate that interest your supporters. Getting started with cryptocurrency donations now puts you in a good position to continue embracing change and engaging your supporters in the future.

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