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Even if you know little about digital currency, you’ve probably heard of it. About 300 million people worldwide use digital assets. In 2024, Wilmington Trust named bitcoin the best-performing asset class in seven out of the last 10 years. But in the other three years, it was much more volatile, as the worst-performing. Even so, it’s hard to see it going away. Consider it from the angle of philanthropy. Americans donated more than $2 billion in cryptocurrency as of January 2024. Here’s what healthcare marketers need to know about cryptocurrency donations.
What is cryptocurrency?
First, let’s break down what we mean when we talk about crypto. Like the U.S. dollar, cryptocurrency is a medium of exchange.
The difference is it’s digital and uses encryption techniques to manage and transfer funds. Bitcoin is the most popular example.
Cryptocurrency uses a decentralized system. This means no central bank determines its supply.
Blockchain technology creates and stores cryptocurrency. It uses encryption to verify the transfer of funds.
These transfers become new blocks added to the existing blockchain. This creates a digital record of transactions.
In good company
Crypto donations are gaining in popularity at lightning speed. The 2024 numbers alone show this. In recent years, many top nonprofits began accepting crypto.
They include the following nonprofits:
- American Cancer Society
- United Way
- Save the Children
- Nicklaus Children’s Hospital Foundation
- Phoenix Children’s Hospital Foundation
To put the spike in context, consider this: Nonprofits raised $3.1 billion on Giving Tuesday 2022, a 15% increase from 2021.
A younger, generous donor demographic
One reason more charities are getting into digital asset donations is the desire to reach a new pool of donors. Crypto donors are, on average, younger, more often male and in a higher tax bracket than typical cash donors.
They also seem more generous, with crypto donors giving $10,500 per gift — about 10 times the average online cash donation.
Also, they seem more likely to support causes receiving attention online. For example, by the beginning of April 2022, crypto donors reading stories about the war in Ukraine on Twitter donated around $100 million to help.
The generosity of crypto donors and the rise of digital philanthropy may be due in large part to tax savings. For now, cryptocurrency donations in the United States avoid capital gains taxes.
That’s because the IRS designates crypto as property. It subjects it to the same rules as non-cash gifts, like stock or real estate. That means that donating crypto can save people more on taxes than making a cash donation.
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Managing market volatility
It’s important to note that dealing in digital assets can come with risks. Today’s market alone is evidence of it.
The value of cryptocurrencies like Bitcoin goes up and down. Consider hiring an adviser to help navigate the high-risk, high-reward world of crypto giving.
The Giving Block, a crypto donation and fundraising platform, can also help. It works with charities to help them process digital asset donations.
Marketing your ability to accept cryptocurrency donations
When you’re ready to receive digital asset donations, here are three steps you can take to let people know.
1. Put it on your website and social pages.
Get the news out there! Add several places on your website where you accept crypto donations. That could include your main donation page, a “ways to give” page or a crypto-specific landing page.
Then, push the news out via your social accounts and email communications. You can include a mention in an existing campaign, for example, by adding a line or paragraph highlighting your news. (Don’t forget to include a link!)
2. Make sure you’re speaking to your target audience.
Remember the demographics of the average crypto donor. They are young, male, in a high tax bracket, generous, and motivated by online news.
Plan how to best reach them. For instance, they may answer phone calls less than older donors. Sending texts might be better.
But the best way to determine what works for this new donor class is simple: Ask them. They’ll tell you their preferred styles of communicating. And remember that what works for one may not work for all.
3. Don’t forget your existing base of donors.
Not everyone will want to donate this way, but many will want to hear about your new giving option. You can send a survey to gauge your donors’ interest. Then, follow up with targeted messages to those who respond in a positive way.
You can also highlight the tax incentives and potential for maximizing donations.
Even if most of your donors don’t use crypto, having it sets you apart. It shows your commitment to innovation.
Do you need help showcasing your donation innovation?
Partner with WG Content’s writers and strategists to create content. Contact us to learn more about how we can support your foundation marketing and fundraising initiatives.
Editors’s note: This post was original published on June 22, 2022.
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