Cryptocurrency + Nonprofits — Conversation Recap — May 20th, 2021

Howdy Futurists!

Thank you for joining us this last Thursday evening to discuss the emerging world of digital currency. We owe a huge debt of gratitude to Tina Roh, the Co-Founder and COO of Every.org, for joining us as a co-moderator. Every.org, a nonprofit organization, is a social network for giving that fosters positive behavior change and encourages individuals to take action and spread generosity.

What was most interesting for us was the numbers around cryptocurrency and nonprofits. Below are some of the most interesting figures discussed:

• According to Gemini’s 2021 State of Crypto Report, 21 million US adults — or 14% of the US population — hold cryptocurrency, and 70% of all holders are between the ages of 25 and 44
• On average, crypto donations are 240X the value of card and bank donation values
• 24% of crypto holders purchased their first crypto assets within the past year
• 60% of US adults are “crypto curious,” meaning they indicated they are thinking of investing in crypto assets
• The number of billionaires who made much of their fortune from cryptocurrency jumped from 4 people in 2020 to 12 in 2021, according to the latest Forbes List of Billionaires
• CBS estimates that there might be as many as 100,000 bitcoin millionaires

We believe there is a powerful case to support our recommendation that that at the very minimum, nonprofits should start exploring the possibility of accepting crypto donations. If only based on the numbers we have presented, we are confident that it would be worth investigating and investing. However, as we discussed, there are many things your organization should discuss prior to venturing into this space.

Among the considerations worthy of mentioning, the most important one is in the mechanics themselves. How will your organization accept crypto assets? Do you want to be responsible for owning and maintaining a wallet? What type of intern internal controls do you have to safeguard your organization against potential fraud? Do you have the knowledge to adequately understand the risks associated with venturing into this space? Have you adequately sought buy-in from internal and external stakeholders? All these questions represent some of the many questions you should be asking to start thinking more intentionally about your organization’s crypto strategy.

For example, we did not realize how complex some of the reporting requirements actually are. Even in the room, there were differing opinions from accounting and tax professionals on the specific accounting treatment. While we certainly do not offer any semblance of accounting or tax advice, one resource that was discussed was KPMG’s Bitcoin Accounting Treatment and Tax Considerations Report. As Tina and others pointed out, the IRS and FASB are still developing guidance around crypto assets, so things are likely to change. Even if regulations do not change dramatically, depending on how your organization ultimately uses donated digital currency, the way you may need to account for and treat transactions may vary widely.

One of the other interesting topics discussed was the idea of ethics in cryptocurrency. Tina discussed the difference in environmental impact between coins that utilize proof-of-work, proof-of-stake, and proof-of-authority mechanisms. We also briefly discussed the unique ethical considerations if your organization operates internationally and how to vet potential donors.

If you are interested in learning more about how Every.org makes it easy for nonprofits to accept cryptocurrency donations, check out their website: https://www.every.org/crypto. If you still have questions, Tina encouraged anyone to reach out to her team at nonprofits@every.org.

In keeping with our mission to continue to share knowledge and resources that we have found helpful in our own work, you can find this week’s free resources in our Nonprofit Futurist’s PUBLIC Google Drive folder. The articles linked above will also take you directly to the document contained in the Drive. See you next week!

Yours in Community,

Chandler Lewis and Chad Wolver
Founders & Co-Hosts
Nonprofit Futurists Club — Clubhouse
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Join us on Thursday @ 4:55 pm PST on #Clubhouse to talk with us about what the future of DEI and nonprofits look like in 2050! Link 👉DEI is not a Fad!