Crypto, crypto, crypto, blah, blah, blah.
Most of us have been hearing about cryptocurrency for years. For those nonprofits who haven’t started accepting cryptocurrency donations already, you might be getting nervous. You’re wondering if you’re missing the boat or if you’re wisely avoiding the newest shiny object.
Some days it seems like everyone is accepting cryptocurrency.
That is certainly not true (yet), but what is true is that there is a meaningful opportunity in the cryptocurrency and blockchain space. According to a recent report from The Giving Block, Nonprofits with The Giving Block received an average of $69,644 in crypto donations in 2021. The annual volume of crypto donations jumped from $4.2 million in 2020 to $69.6 million in 2021, an increase of 1,558%.
Let’s pretend, for fun, that the growth in 2022 slows from its blistering 1,558% pace in 2021 to a measly 40%. That would result in nonprofits accepting cryptocurrency receiving, on average, $100,000 in crypto donations.
Anyone out there that wouldn’t like an extra $100,000 in donations next year, please raise your hands.
I don’t see any hands up, so let’s continue.
Ten Things to know about cryptocurrency before jumping in
What is Cryptocurrency?
1. Cryptocurrency is a digital medium of exchange (e.g. $) that allows direct transactions without third-party processors.
- If you want to learn more about cryptocurrency, there are approximately 9,768,456 resources available (give or take), but here’s one that is popular.
Why would you want to accept cryptocurrency?
2. Accepting cryptocurrency donations opens you to an entirely new donor space
- Nearly half of “millennial millionaires” keep 25% or more of their assets in cryptocurrency
3. Accepting donations in cryptocurrency gives you access to the NFT space as well
Some concerns about cryptocurrency
4. Cryptocurrencies aren’t regulated or backed by any government
5. The value of cryptocurrencies can be meaningfully volatile
Barriers to Entry
6. Accepting cryptocurrency requires some technical know-how and setup
- The upshot is that The Giving Block can provide your nonprofit with virtually all the needed support
7. Most likely, crypto donors are not like your current donors
Cybersecurity and other risks to cryptocurrency
8. Most cryptocurrency is not insured, or even insurable
9. Holding and exchanging cryptocurrency exposes you to new kinds of security threats,
10. Failing to appropriately protect your digital wallet and other crypto assets leaves you vulnerable to significant losses that will not be covered by insurance
What to do next
If this article has convinced you that cryptocurrency is worth looking into as a revenue opportunity for your nonprofit, we recommend you reach out to The Giving Block. And if you want help making sure your nonprofit is technology ready and secure (including your crypto), then reach out to us.