With more nonprofits in existence than ever before, there is increasing competition for donors’ fundraising dollars. That’s why it’s important to constantly be on the lookout for new ways to reach potential donors and raise funds. You also want to give people as many options as possible for making a contribution. Leave no stone unturned.
One new means of giving in the digital world comes in the form of Bitcoin. While this unique payment system remains a mystery to many, it does have the potential to become a fundraising asset. The question is: Will it?
In today’s blog post, we’ll explore the value of Bitcoin for nonprofits and show you how it may fit into your fundraising strategy.
What Is Bitcoin and How Does It Work?
Let’s start at the beginning. Truth be told, the majority of people still don’t know what Bitcoin is. They may have heard the name, but they have no idea what it really means or does.
Bitcoin is form of digital currency invented in 2009. Just like dollars, Bitcoins represent value. And like dollars or euros, the value of Bitcoins can fluctuate—though Bitcoin values fluctuate far more dramatically. So Bitcoins can be worth more one day than the next.
The big difference is how Bitcoins work.
Usually when you make an online payment, you use a credit card, PayPal or similar payment method. These come with fees from a bank for processing the payment. See the bank is the middle man, taking a cut for moving your money from your account to someone else’s.
Bitcoin cuts out that middle man, moving directly from one person to another. That means low or no processing or transaction fees. No international exchange regulations. And users can send money anonymously, without the identity tracking (and theft) that comes with credit card payments. As the Bitcoin website describes it: “Bitcoin is pretty much like cash for the Internet”.
Why Bitcoin May Be Beneficial To Charities
If you read the section above, you probably already have an idea of one way Bitcoin can benefit your nonprofit: reduced processing fees for donations. Those little bites banks take from credit-card donations can add up. And then there are international transfer fees, which take an even bigger bite. Eliminating these extra fees is undoubtedly appealing to nonprofits.
But there’s another key benefit to soliciting Bitcoin donations as well: It opens the door to new audiences.
As the popularity of Bitcoin has increased in recent years, so have the number of Bitcoin investors. This led to an influx of Bitcoin millionaires, searching for ways to spend their Bitcoins with a limited number of options. Many of these individuals are willing to donate their Bitcoins for important causes—if just to spread the word and encourage increased adoption of the currency.
Not surprisingly, Bitcoin usage also skews younger. Moving into the future, Bitcoins could become a way to reach more Millennials. For nonprofits always looking for ways to find inroads and develop connections to this young audience, Bitcoin could be one answer.
Bitcoin really is at the heart of true peer-to-peer giving, reducing the need for formal payment methods and giving amounts. Unlike text donations, which are limited by dollar restrictions, Bitcoin gives your audience the ability to donate any amount they want instantly. In addition, Bitcoin “tipping” can accumulate into real money if used in conjunction with social updates, newsletters and videos (you provide content of value and a supporter tips you for it).
There really are a lot of potential benefits of Bitcoin for nonprofits and donors alike.
How Bitcoin Has Been Used by Charities
To date, the use of Bitcoin for charitable fundraising has been limited—though a handful of organizations have found some success accepting Bitcoins. And the acceptance and usage of Bitcoin continues to expand. It’s also important to note that accepting Bitcoins can lead to larger donations since each Bitcoin is currently worth around $400-$500.
You can find a few examples of how some charities have raised money using Bitcoin in the article “Bitcoin Holds Big Promise for Charity but Hasn’t Delivered Many Big Gifts” from the website CoinDesk. This piece mentions charities like Sean’s Outpost, a Pensacola homeless outreach that exclusively accepts Bitcoin and other digital currency, and the BitGive Foundation, which raised $5,000 in one day through Bitcoins for Save the Children.
Here are a few other informative links about Bitcoin for charitable fundraising:
Still, there haven’t been any instances of phenomenal Bitcoin fundraising success reported yet. That may be because Bitcoin is so new and hasn’t been used by a major nonprofit in a major fundraising campaign to this point. But it also may be because many nonprofits remain both confused by and leery of the new currency. They question whether the legality of Bitcoins will be challenged, and whether it’s just a flash-in-the-pan trend or something with staying power.
Meanwhile, organizations like BitGive Foundation and the Bitcoin Foundation are working to show nonprofits the great value Bitcoin has a fundraising tool so more nonprofits will adopt the payment system. But, to this point, Bitcoin remains a mostly new and unsettled frontier.
How to Use Bitcoin in Your Fundraising Strategy
If you want to be an early adopter and get a jumpstart on other nonprofits when it comes to Bitcoin, now is the time to take action. As we mentioned above, there are only a handful of nonprofits currently accepting Bitcoin—and even fewer actively using their acceptance of Bitcoin to spark fundraising from new audiences.
If you’re interested in dipping your feet in the Bitcoin waters for your nonprofit fundraising, you can learn how to get started by visiting this page of the Bitcoin website.
Here are a few other Bitcoin resources that may be valuable to your nonprofit:
Bitpay – Bitpay is essentially the PayPal of the Bitcoin world (minus the transaction fees). They provide plugins for your website that allow you to accept Bitcoin payments and exchange your Bitcoins for dollars.
Bitcoin100 – Bitcoin100 exists specifically to convince new charities to start accepting Bitcoin donations. Bitcoin100 donates the Bitcoin equivalent of $1,000 to non-political, secular charities that prominently display an option for supporters to contribute via Bitcoin on their website.
BitGive Foundation – The BitGive Foundation is a nonprofit, charitable organization whose mission is to leverage the power of the Bitcoin community to improve public health and the environment worldwide.
If you do start accepting Bitcoin, it’s also a good idea to leverage it as a promotional tool to encourage donations and engage new audiences. Put out a press release, talk about it on your blog, include the logo prominently on your website, mention it in mailings, etc.
The concept of Bitcoin giving is so novel at this point that it not only has the potential to boost your online fundraising, but also may draw some additional attention to your cause.