Some risks are bigger than others right? Nothing is more solid than a cash donation. As we know, there are options in payments of donations. Some like to pay with personal check or a foundation check. I have had donors that have donated stock to my clients. Some use their credit card and others are starting to make cryptocurrency donations. That’s right, they are using digital currency to make donations to their favorite charities. Should your organization or school accept this? Maybe and maybe not. At the present, there are risks with cryptocurrencies and most of that comes from not many really understand what cryptocurrency is.
Be cognizant that there have been a number of cryptocurrency companies like Voyager and Celsius Network LTD have gone bankrupt leaving billions of dollars to be uninsured with investors out of luck with their money. The FDIC does not insure crypto exchanges. Caveat emptor.
I am not the person to tell you what to do if you are offered a donation in cryptocurrency, but I can tell you that one day you will likely have it offered to you in a donation. Presently, there are over 10,000 cryptocurrencies out there. Are investors making a fortune on it or is it “fake” money? There are set-ups that an organization or school must have in order to process a cryptocurrency donation. Seek a CPA advisor and legal counselor who is knowledgeable on cryptocurrency.
There are some obvious risks with cryptocurrency. The first is just understanding what it is. Now is the time to get educated on it and discuss if it something for your organization or school to accept if it is offered to your nonprofit. It doesn’t take an expert to follow the rollercoaster of a cryptocurrency. Just look it up online and watch the soaring rise one day, the drastic fall the next day and the rise again the following day. What does that kind of donation mean to your nonprofit?
Evaluate what cryptocurrency can mean to your nonprofit. Does it carry enough value for the risk? It may not have been offered to you just yet, but in it’s thirteenth year of existence, it will sometime and you should be prepared and educated on cryptocurrency.