Confused about crypto? Here's the truth you need to know to avoid common misconceptions.
When James and I started Engiven in 2018, we quickly realized that crypto education needed to be a priority. At the time, many people in the nonprofit space didn't understand what crypto was or how it could hold value, and thus didn't understand how it could unlock greater giving potential among their existing donor bases.
As we held demos, workshops and seminars, patterns began to emerge. Soon we became well acquainted with the top concerns nonprofits had about crypto, and we got good at resolving those concerns by providing correct information and helping equip them with best practices to safely navigate the new landscape. Along the way we’ve also discovered there are a number of common misconceptions that many nonprofits have about cryptocurrency and cryptocurrency donors.
I'm going to share the top five myths about crypto with you––and the realities to counter them––below.
- Crypto donors are all young / millenials
Cryptocurrency has only been around since 2009, and its newness has produced the assumption that a majority of crypto donors are young. Given that many nonprofits curate their fundraising efforts toward a more mature demographic (because they're more likely to give), the erroneous assumption can be made that more mature donors are less likely to hold crypto and therefore crypto just isn't worth your nonprofit's time.
Recently mined data paints an interesting picture of the state of crypto in the US:
- 20% of US adults own crypto
- 44% of them bought crypto for the first time in 2021
- Only 16% of them own more than $10,000 worth of it crypto
- 32% own less than $1,000 worth of crypto
While most crypto owners are young, it's not the new crypto owners who are donating crypto––it's the people who have significantly appreciated crypto holdings who become crypto donors. It's people in that 16% category, who have over $10,000 worth of crypto, that are being philanthropic with it.
Crypto donors are often 50+, and they became tech-savvy working on their old IBM computers. When this exciting asset class and blockchain technology became available, they saw the potential and bought crypto. Now, some of them have significantly appreciated crypto portfolios, and your nonprofit could be positioned to become the recipient of their generosity.
- Crypto donations are all anonymous
Like most nonprofits, we believe that anonymous donations are not as valuable as gifts from a known donor because anonymous gifts prevent the organization from engaging the donor, and limit its ability to further enfranchise them into the mission.
Because of this, we've taken two steps to make crypto donations more transparent:
- Engiven's system doesn't allow anonymous donations over $1,000 USD
- We also allow our partners to remove the option to make donations under $1,000 USD anonymously
Keep in mind that donating crypto could unlock significant tax benefits for the giver, which they can only receive if they've identified themselves. So, there's a potentially significant incentive for donors who make crypto gifts and put their names on them.
- Organizations need to be crypto experts to accept crypto
Crypto is a new technology, and the learning curve is steep. That can be intimidating, and make people feel that, if they don't have a crypto expert on staff, they shouldn't accept crypto.
But, that's exactly what Engiven does––it's the role we play: we handle the complicated side of things. You don't need to know about crypto, follow the market, understand how blockchain technology works, or even know how to talk about crypto. With Engiven, receiving crypto for your nonprofit is as easy as putting a button on your website.
That being said, if you would like to become more knowledgeable about crypto, we've assembled a starter pack of educational resources about crypto that you can view here: Engiven's Educational Resources.
- Crypto donations are not safe
In the early days of crypto, there weren't a lot of laws or regulations around crypto, which facilitated some highly-publicized events of crypto holdings being hacked. As the space has grown, regulation, laws and best practices have become more well-established, making participating in the crypto landscape significantly safer.
Companies like Engiven have adopted established compliance frameworks to guide their business practices. Engiven is SOC 2 Type 1 certified (a certification that evaluates an organization's cybersecurity controls), and neither Engiven nor its customers ever hold cryptographic keys or wallets that can be hacked.
- Crypto is only used by criminals
This concern is less common nowadays. But, just in case, let's talk about all the ways that crypto has been used for good:
- Last year, Engiven processed one of the largest known Bitcoin donations in history, worth $10 million dollars.
- Mike Peterson created the first circular Bitcoin economy in El Zonte, a coastal town known as "Bitcoin Beach" in El Salvador, where previously unbanked individuals can send and receive digital payments through a lightning network.
- The following nonprofits have already partnered with Engiven, making a pathway for crypto donations to support their world-changing causes:
- Compassion International
- Fellowship of Christian Athletes
- The Salvation Army
- US Figure Skating
- Saddleback Church
- Texas A&M Foundation
- North Point Ministries
- The Signatry
- Samaritan's Purse
Cryptocurrencies and blockchain technology have already changed the financial landscape forever, and adoption will continue to grow year after year. I expect that the exciting and novel asset class that is crypto––along with the surrounding technology––will continue to transform the giving space, unlocking and activating new and greater generosity.