Growing presence of crypto in philanthropy
The world has not only transformed the financial world, it has also been strongly embraced and adopted for charitable pursuits. The reasons for rising usage of cryptocurrencies for charitable causes lies in its unique technology that gives it an edge over the rest. Crypto donations hugely differ from the traditional means of donations. What are these differences and how have they made crypto philanthropy an extremely desirable choice for the masses. We explore the advantages of crypto funding over the conventional method and take you through some remarkable instances of crypto philanthropy so far.
Advantages of using cryptocurrencies for philanthropic purposes :
- In crypto donation platforms, donors can solely focus on the cause rather than selecting the right organization, and directly transfer the amount of those in need. Crypto philanthropy has switched the donation pattern from organization-specific to cause-centric.
- This mode of working also ensures that smaller nonprofits get equal opportunities to be involved in the
- Cheaper transaction costs
- Transaction costs for receiving crypto donations are less
than those for credit or debit card.
- The processing fee on credit card transactions, and a direct deduction from the charity amount ranges from 2.2 percent to 7.5 percent according to Charity Navigator, a charity assessment organization.
- Crypto donations offer attractive tax donations
- Currently many countries including the US, UK, Canada,
- Australia and New Zealand offer tax deductions when donating cryptocurrencies to non-profits.
- However, converting crypto to fiat can lead one to pay capital gain taxes.
- Protection of donors’ anonymity
- One of the major advantages of crypto donations is the anonymity of the donors.
- It allows donors to donate huge amounts without having to go through legal and regular banking obligations of fulfilling KYC and other identification requirements.
- Ease of transferring cryptos to any part of the world. This allows charitable organizations to receive donations from across the globe. Many international charity organizations like UNICEF, Red Cross and Greenpeace have started accepting crypto donations.
The present scenario of crypto donation
In 2021, large volumes of crypto donations were received by various charitable organizations. In 2021, more than 1,300 nonprofits accepted crypto
donations. According to United Way, an international charity organization, 60 percent of the crypto donors are below 40 years of age.
In the US, the average age of crypto users is 38 whereas the average age of donors is 64. This year, people have poured in cryptocurrency
donations in times of need : The appeal for help during the ongoing conflict in the Russia-Ukraine war led to about $100 million in crypto
donations to help Ukraine. During the pandemic in India, Ethereum co-founder Vitalik Buterin, donated about $1 billion to India’s COVID19 relief in shiba inu (SHIB) tokens in May 2021.
In 2021, the Tor Project, a popular non-profit for internet freedom and privacy, received 58 percent of its donations in cryptocurrencies, coindesk.com reported.