Donating in crypto: Why giving your digital money to a charity could be a smart idea
We have already talked that receiving crypto donations could be good for charities and listed the reasons:
It is the way to reach out to a younger (and rather generous) audience, who is ready to give if it’s clear where the money goes to.
It means easier and cheaper cross border transactions.
It makes things faster.
It makes you look more innovation-friendly and attracts media attention to your cause. Several interesting fundraising campaigns got in the spotlight when they announced they would receive donations in crypto. For instance, the Japanese city of Hirosaki that started accepting BTC donations for its famous Cherry Blossom Festival immediately hit the news. Crypto is still a hype, and there’s nothing wrong with taking advantage of this fact.
Now let’s explore the benefits crypto giving implies for givers themselves.
It might be a smart financial decision, depending on how your government sees crypto. For example, if you are based in the U.S., you should be aware the the IRS views crypto assets as property. It means that if you sell it, you have to pay capital gains tax. Say, if you acquired your BTCs long time ago when they were very cheap and sold them at the price of 10,000 USD, the tax amount would be huge.
Thus, if you seek to support a good cause, it would be a better scenario to donate in crypto. The charity will receive the full amount of your gift, as such organizations are seen as tax-exempt. Their sale of your crypto (and most charities convert crypto in fiat currencies as soon as they receive it) will not be taxed.
For an altruistic minded person, crypto donation is a way to increase their positive impact on the targeted community. By donating traditional money that rely on banks and payment systems for their movement, you give up to 30% of your contribution to the financial institutions involved in the process. Are you willing to share your hard-earned money with intermediaries? If you seek to support those in need, and not the banks, you should consider a P2P crypto donation.
The level of transparency, ensured by blockchain technology, means that your money goes exactly where it is supposed to go. It helps make giving more personal – instead of adding your funds to a common pot, you channel it to the community, or even a household, whose situation you want to improve. Peer-to-peer help, allowing you to see the concrete results of your actions, is more motivating (and more fun) than just transferring some money to an organization.
Considering all this, you may be ready to donate part of your crypto right now.
How would you do it?
Currently, there is increasing number of charities big and small who are ready to accept donations in Bitcoins and other popular digital currencies. Sometimes it’s the main (or even the only) payment option. People, running such crypto-oriented funds, often want to accomplish two goals at once – to help the needy and to promote cryptocurrency use locally or globally. To donate, you send some crypto to the wallet address indicated on their Donate page. You may use a QR code for the same purpose, if it’s available.
If you are not comfortable with sending your money to a nonprofit you don’t know much about (and some pages of charity projects look rather primitive) you would better opt for a charity platform, aggregating various crypto-friendly projects. The principle is the same – you find the charity you want to support in the catalog and transfer your digital coins to their wallet address available on the page. The advantage of using such a platform is that all the projects listed there have been previously verified and approved. Also, you don’t have to google for a suitable project yourself – it’s enough to browse the catalog where all the relevant information is presented in a standardized way.
For those of you who use Channels, donating crypto will be made really easy and safe due to the new Charity platform to be added soon. The Charity platform is planned to be seamlessly integrated with your Channels cryptocurrency wallet, meaning you will be able to donate right there in the app. All the projects presented in the Channels Charity catalog will be classified according to their cause, to save your time and effort.
The platform will charge you no fee – moreover, we plan to use our own funds to promote selected projects. Our goal is to encourage more crypto owners to share their money, and channel their donations to the people who need urgent help. Naturally, we also hope to acquire more users, thus increasing the general popularity of the Channels app worldwide.
Currently, the platform is being tested. Follow our news not to miss the release!