Report: Cryptocurrency Donations Heating Up
A Fidelity Charitable report finds that cryptocurrency donations increased by a factor of 10 in 2017. And things could further improve in 2018: At least one individual donor is anonymously sharing their bitcoin-earned millions with a huge number of nonprofits.
Cryptocurrency has had its ups and downs in recent years—literally, just check out the charts—but it nonetheless might soon prove something that donation-focused associations and nonprofits need to take seriously.
The reason for that is buried in a recent report from Fidelity Charitable [PDF], which found that the firm accepted $69 million in cryptocurrency donations in 2017. While just a drop in the bucket compared to the $4.5 billion the firm distributed last year, it represents a nearly tenfold increase from the prior year, when it was just $7 million.
“It is one of the fastest growing assets that we are seeing wanting to be contributed to charity,” Fidelity Charitable Vice President Amy Pirozzolo told CoinDesk. “Many people who own bitcoin or other forms of cryptocurrency do want to be philanthropic.”
The potential market for cryptocurrency donations could be massive. Case in point: Last December, the Internet Archive, an early adopter of bitcoin donations in 2012, received a $1 million bitcoin donation from the Pineapple Fund, an anonymous philanthropic campaign. (It has since donated another million.) The windfall came about a month after the nonprofit digital library expanded the kinds of cryptocurrency it accepted to include Bitcoin Cash (a fork of the original bitcoin project) and Zcash.
The Pineapple Fund, by itself, has been a very active cryptocurrency donor. This week alone, the group donated $1 million to the Sustainable Ocean Alliance, and in recent weeks, the fund has also donated to Pencils of Promise and the Multidisciplinary Association for Psychedelic Studies, among numerous others.
The potential of even more charitable giving via blockchain is something that’s been widely discussed recently. In a Medium post, Coinbase Cofounder and CEO Brian Armstrong made the case that nonprofits should consider having speculative funds invested in cryptocurrency.
“Given the enormous wealth creation from cryptocurrency, and the future potential upside, I believe there is a rare opportunity to create a large non-profit fund,” he wrote.
Another factor behind the recent surge may be taxes. Fortune notes that the Internal Revenue Service is becoming more aggressive about calling on cryptocurrency holders to report their income from bitcoin or other forms of currency. And the Fidelity Charitable report explains that by donating a portion of their funds to charity, cryptocurrency holders could eliminate the significant capital gains taxes they might owe as a result of the currency they own.
(yesfoto/iStock Unreleased/Getty Images Plus)