In late March, the public school crowdfunding platform DonorsChoose.org, which allows teachers to crowdfund for classroom projects, received a record $29 million donation from the folks at Ripple — one that filled every open crowdfunding request.
Awesome.
Ripple isn’t the only one thinking about the cross-section of charitable giving and cryptocurrency. As Brian Armstrong of Coinbase wrote, “Cryptocurrency has produced a handful of billionaires already … Similar to the GivingPledge, many of these early holders will want to engage in philanthropy.”
It clear: a new group of people are suddenly flush with crypto wealth, and they’re looking for the same opportunities that the fiat wealthy have. It’s not just charities — from real estate to buying expensive baseball cards, there is a need here.
There is progress on the charity front: the Pineapple Fund, started by an anonymous donor who claims to be among the 250 largest holders of bitcoin in the world, has donated more than $55.3 million to 60 charities including The Water Project.
But ultimately, it’s not just about the donors deciding to give and groups providing the system to do so — it’s paramount to get buy-in from the charities themselves.
Intiva Token has made such strides, according to their platform overview, reaching an agreement with groups like the National Osteoporosis Foundation to accept crypto token. This is a big deal — and we need more activity like this.
Accepting crypto may put an administrative or accounting strain on non-profit organizations that are not always among first adopters of technology and are often short-staffed. Not exactly a recipe for adoption. For now, it’s on the donors to help those charities work through these challenges — props to Intiva Token for doing that — and making sure these non-profits are equipped from an accounting perspective.
Thankfully, the IRS has offered guidance on how cryptocurrencies should be treated (as property), which means the value of cryptocurrency is determined to be the fair market value as of the date it was received. Still, you can imagine the challenge of accounting for a crypto token donation which has two steps: first, the value of the token is often listed as it relates to ETH or BTC, and then firms must calculate the USD value of the ETH or BTC on that day.
In a large international 24 hour market, it’s not always easy to agree on when the day begins/ends, let alone which value you want to go with. And the subject of when a non-profit should convert that crypto asset to fiat currency (if at all) lingers.
This is a lot of heavy lifting for non-profits and I believe there’s an opportunity to work closely with those charities — as Pineapple and Intiva have done — to execute properly.
My name is Andrew J. Chapin. I’m the CEO of Benja, the merchandise ad network, a token advisor, and the head of the startup foundry Chapin Labs.