Cryptocurrencies and blockchain have increasingly been making headlines. If you’re a nonprofit reliant on fundraising, you may be wondering what impact cryptocurrencies could have on your nonprofit or ability to raise funds for your cause.

There are many potential benefits to accepting donations in cryptocurrency, especially for charities and nonprofit organizations. You gain access to a wider audience of donors, move money more easily across borders, and are able to use an appreciating asset strategically.

Access a Global Audience

One of the major benefits for charities accepting donations in crypto is access to a large global audience.

By accepting cryptocurrency for donation, an organization can open the door to accept donations from anyone, anywhere in the world. Instead of paying international exchange fees, changing currencies, and dealing with international banks, charities can focus on what’s important — taking care of their community.

This access is very important for charities that have a presence in countries with a low-value local currency. Making it easy to donate cryptocurrency and avoiding international exchange fees will attract donors from countries with high-value currencies.

International donors can feel ensured that part of their donation isn’t being used to pay banking fees, and that their money stretches further in a country with a low-value fiat currency than their own.

Fiat currency donation can be expensive, using from 1% to 7.5% each dollar donated to pay exchange fees. With crypto donations, especially in large amounts, those fees can go way down, making it cheaper for charities to accept international donations, and letting donors know that their donation is being spent on making a difference.

Move Money Across Borders

Not only are international transfers costly due to banking and exchange fees, they can take days or even weeks to complete. Between high bank fees and slow processing time, it’s no wonder that charities and donors are interested in another way.

Accepting and donating in crypto can make moving money across borders much easier and much faster than international donations in fiat currency. With cryptocurrencies, there’s no need to wait on a bank to verify the transaction and then to process it. Instead, the exchange is verified on the blockchain and can be completed within minutes. On top of that, the ability to verify where the money is going offers a level of transparency that will be appreciated by donors and charities alike.

Another benefit of using crypto to move donations across borders is that it’s outside the influence of corrupt government and political influence. One of the difficulties of donating to international charities is that some of the money might be skimmed off the top of donations to pay off a corrupt agency. With cryptocurrency, there’s complete transparency.

Track How Donations Are Used

Speaking of transparency, the cryptocurrency feature that is most exciting to those who use it is its immutable and transparent nature; transactions, once completed, can never be altered. Once a transaction is made, it will exist forever on the decentralized, digital ledger that is the blockchain. That means that donations made on the blockchain are less likely to be susceptible to unscrupulous charities who misuse funds, or outright scams. Where there are generous people, there are also those who are looking to take advantage of that generosity. Donors should always be wary of charity scams and those looking to “accept” donations that aren’t officially charities.

Cryptocurrency can make tracking funds donated to a charity even easier. Anyone on the blockchain can see every transaction that’s made. Once a donor sends crypto to a charity, they can then track those funds to see how the money is used. Some of this idea of transparency is still more dream than reality as many charities that do accept cryptocurrency also immediately off-ramp into fiat currency. So, technically the donation funds can be tracked to how they’re used, until they’re exchanged for the local currency.

Charities can embrace donors’s desire for transparency by accepting cryptocurrency as donations and tagging funds for specific project as requested by donors. If charities continue to use the cryptocurrency instead of off-ramping to fiat currency right away, donors will be able to track those coins to see what projects they go to support.

The transparency of the blockchain has the potential to make donors more trusting of charities. Donors will not only feel safer giving funds to charities, they might even enjoy seeing where their donation is being used. This transparency gives charities a way to connect with donors on a deeper level, letting them know exactly how their donation goes to support the community and the project.

Grow Your Crypto Funds Like an Investment

Since the value of cryptocurrencies tend to increase over time, like an investment, they can be an appreciating asset for an organization who is able to hold onto their funds for a time. As with any appreciating asset, there’s also the potential for depreciation, so you need to be aware of the market and trends, and always think strategically.

Donors who bought into cryptocurrencies early on have seen their assets grow substantially. For some donors, this massive growth is more wealth than they’re interested in managing or keeping for themselves. Many people have taken to donating those proceeds, which we think is a truly wonderful way to share the benefits of cryptocurrency.

One well-known example of this is the Pineapple Fund. An early adopter of crypto found him or herself (the creator has chosen to stay anonymous) with an asset that had greatly appreciated in value. As they write on their website, “What happens when your ‘play-money’ becomes a treasure chest, and you’re past the satiety point of money?” They decided to donate about $55 million of Bitcoin to charities of their choice.

For charities that are willing to take a bit of a risk, they can hold on to some cryptocurrency instead of using it all at once. As the asset grows, the charity can sell off the growth to fund projects. This is a riskier position, as there’s the potential for depreciation, but some charities may be willing to take advantage of the market.