Finding and building relationships with cryptocurrency donors may not be as difficult as you think.
Finding and building relationships with cryptocurrency donors may not be as difficult as you think. We encourage you to start in the most obvious places when you begin to look.
A study done in 2021 found that 22% of the US population owns crypto. Further data shows that 4% of that group sits on significant capital gains.
With this in mind, a percentage of your current donor base may have the ability to give a significant amount of crypto. Below are five tips for capitalizing on that opportunity.
1. Tell your donors
Part of your current donor base likely can give crypto. You may not know who, but start with your current donors. Let them know through email that you now accept crypto donations. You don't have to understand all the nuances of cryptocurrencies to accept them. Likely, if your donors own crypto, they know about it already and don't need an education from you.
2. Be ready for more meaningful conversations.
The landscape of philanthropy is changing and the foundations of finance & tech are subtly shifting. On top of that, the pandemic has called most of us to reassess our priorities, and many Interactions with donors have become deeper and more meaningful. The time to capitalize on these shifts is now. You don't have to be a crypto expert to begin these conversations. Simply open the door, lean on Engiven, and begin facilitating the open conversation.
3. Give them information about the tax breaks when donating crypto -
In 2021, cryptocurrency reached a tipping point, evolving from what many considered a niche investment into a global, established asset class. Because crypto is regarded as an asset by the US government, there are tax breaks when donating it. In short, if they give crypto, they do not have to pay taxes on that asset, no matter the gains they have made. When they donate that entire asset (all profits included), it is a tax write-off for the donor. The nonprofit then receives the whole amount from the liquidated crypto tax-free. Everyone wins. Donating long-term appreciated assets can also unlock additional funds for charities. There is massive potential for savings for donors and nonprofits on transaction fees embedded in traditional financial services platforms.
4. Social media matters
Letting your donors and followers know that you have decided to accept crypto donations shows that you are aware of the changing landscape of giving. This sets you apart as a cutting-edge organization and appeals to crypto donors. The pool of cryptocurrency users is, on average, much younger than traditional donors. Over 60% of cryptocurrency users are under the age of 40. Using social media platforms with the correct hashtags and campaigns could not only encourage current donors to give crypto but can reach new, younger donors looking for charities that align with their tech values and investments.
5. Consider asking at year-end.
If you are fundraising, you already know that over 50% of donations happen in the last quarter of the year. As people consider taxes, this is a good time to reach out and give them information about donating crypto and the associated tax benefits. Building a sub-campaign around Giving, Tuesday focused on crypto, highlighting a specific giving area for the crypto enthusiast that could yield crypto donations.
These are five simple and rather apparent tips. But like I said, looking in the clearest places to begin is logical and practical. Some of these donors could very well be within reach.
Engiven offers more tips and instructions to premium customers in our 90-day success guide. If you're interested in this, you're welcome to send us a message in the chat button on the bottom-right-hand side of your screen. If you're new to Engiven, here's a link to sign up today.