It feels like accepting cryptocurrency donations is on the minds of a lot of fundraisers these days and the biggest question relates to the mechanics of accepting such gifts. If you are one of those fundraising with cryptocurrency on your mind, before you begin, ensure that any decisions around the mechanics of accepting cryptocurrency gifts align with your gift acceptance policy.
There are two ways to approach accepting cryptocurrency donations. You can consider it as another payment option, much like you accept credit card, PayPal, or direct debit. This would be a passive approach. If you are interested in proactively fundraising for cryptocurrency gifts, it involves incorporating it within your fundraising strategy.
Deciding how you wish to proceed will influence the route you select for accepting cryptocurrency donations.
DIY or Assisted Support Route
There are two routes you can take to accept cryptocurrency donations within Canada. One is the DIY (do it yourself) path, where you set up the systems internally. If you decide to actively fundraise for cryptocurrency donations, you may wish to consider this method.
The other option is the assisted support route, where you engage with a vendor to accept cryptocurrency on your behalf. If you view cryptocurrency as merely another payment method (similar to credit card, cheque or direct debit), this route will be the easiest to implement and manage. For most organizations, this is a great option as it requires minimal resources and expertise.
Assisted Support Route
In May 2022, CanadaHelps announced that they added the ability to accept Bitcoin and Ethereum donations on behalf of registered Canadian charities. The process is like the other types of donations CanadaHelps accepts on behalf of charities. They accept the cryptocurrency, sell it, issue the charitable tax receipt, and transfer the funds to the selected charity.
This option is easy to implement and doesn't require additional internal resources. You follow the same process you use with other CanadaHelps donations as a charity. There are no additional steps you need to take beyond ensuring your CanadaHelps profile and website are up to date.
For most organizations, this seems like a solid option but there are potential drawbacks.
Other cryptocurrency platforms, such as The Giving Block or Engiven, are US-based. You will want to investigate them further to understand if they are viable options for your organization.
DIY Route: Why Bother?
If your goal is to fundraise specifically from cryptocurrency donors, a DIY approach may be a good option that allows you to control how the cryptocurrency donations are received, what coins or tokens are accepted, and what information you require from donors to accept a donation.
The DIY route requires an investment of staff time to learn the mechanics and set up the systems. It will be important to have the internal capacity and strategic support to undertake this route. Once established, ongoing monitoring and reporting will be required to ensure you meet annual reporting obligations.
The DIY method can be beneficial if you are looking to expand your donor base, especially with younger, digital native donors who may not display traditional indicators of wealth. Based on The Giving Block, cryptocurrency donors are excellent major gift prospects as they hold higher assets and investments than non-cryptocurrency investors. They don’t demonstrate traditional wealth indicators, which is why you probably wouldn’t identify them through traditional methods. Think – potential major gift donors hiding in plain sight.
In Part 2: The new terminology and processes that come with accepting bitcoin.
Disclaimer: The author does not endorse any of the vendors listed in this article. Organizations should conduct their own due diligence when working with vendors.
Liz Rejman (she/her) has spent 25 years working in the fundraising profession. Liz is a former President of the prospect development association (Apra) and served as a member of the Board of Trustees for the Apra Foundation. She has instructed at Western University on technology in the not-for-profit sector and Georgian College on prospect research. She is the co-editor and contributor to the book "Prospect Research in Canada: An Essential Guide for Researchers and Fundraisers" and contributor to the book “The Vigilant Fundraiser.”
