Even if you don’t know much about how digital currency works, you’ve probably heard of it. About 295 million people worldwide use digital assets.
In 2021, Bitcoin was named the best-performing asset class of the last decade, with its gains far outpacing the stock market. This year, of course, has been much more volatile, with stocks and cryptocurrency markets alike tanking in recent weeks. Yet now that the asset class is here, it’s hard to see it going away — especially when you consider it from the angle of philanthropy: Americans donated more than $69 million in cryptocurrency last year, a staggering 1,558% increase from 2020.
All this may have you wondering what you as a healthcare marketer 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 is also decentralized — for now, anyway — meaning its supply is not determined by a central bank.
Blockchain technology, invented in 2008, creates and electronically stores cryptocurrency, using encryption to verify the transfer of funds. These transfers become new blocks added to the existing blockchain, creating a digital record of transactions.
In good company
As a way to donate to charity, crypto is gaining in popularity at lightning speed. The 2021 numbers alone show it. But even before then, the COVID-19 pandemic and resulting economic impacts drove many nonprofits to revisit their traditional fundraising platforms.
Indeed, a growing number of leading nonprofits began accepting crypto donations as part of their fundraising strategies in recent years. These nonprofits include the American Cancer Society, the United Way and Save the Children. Miami-based Nicklaus Children’s Hospital Foundation started accepting cryptocurrency last fall. Phoenix Children’s Hospital Foundations embraced digital donations earlier this year.
To put the spike in context, consider this: Giving Tuesday 2021 saw crypto donations rise 583% — and the number of participating nonprofits jump 839% — compared to Giving Tuesday 2020.
A younger, uniquely generous donor demographic
One of the reasons more and 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 to be more generous, with crypto donors giving $10,500 per gift — nearly 10 times the average online cash donation.
In addition, they seem to be more likely to support causes receiving attention online. For example, by the beginning of April, around $100 million in crypto donations to help Ukraine were linked to donors reading stories about the war on Twitter.
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 cryptocurrency as property and subjects it to the same rules that apply to non-cash gifts, like stock or real estate. That means that, for the most part, donating crypto can save people more on taxes than making a cash donation.
Managing market volatility
It’s important to note, though, 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. Because the healthcare profession is a traditionally conservative industry, your organization may benefit from hiring an adviser to help navigate the high-risk, high-reward realm of crypto charitable giving.
The Giving Block, a crypto donation and fundraising platform, can also help. It works with charities to help them securely process digital asset donations.
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Marketing your ability to accept cryptocurrency donations
Once your organization is set up to receive digital asset donations, there are a few things you should do to start marketing your dive into the crypto donor pool:
1. Put it on your website and social pages
Get the news out there! Add to several places on your website that 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. (Just 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 — young, male, high tax bracket, generous, motivated by online news — then strategize how best to reach this audience. They may be less receptive to phone calls than older donors, for instance, so sending communications by text message might be more effective.
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 is going to want to donate this way, but most will be excited to hear about your new giving option. You can send out a survey gauging your donors’ interest, then follow up with targeted communications to those who respond positively.
You can also highlight the tax incentives of donating crypto, as well as its potential for maximizing donations.
Even if the majority of your donor base doesn’t jump on the crypto bandwagon, showcasing the fact that you have sets your organization apart and underscores your commitment to innovation.
Do you need help showcasing your innovation? WriterGirl’s team of healthcare writers and strategists partner with your organization to create content that resonates with your audience. Send us a message to learn more about how we can support your content marketing initiatives.