Cryptocurrency Is A Preferred Giving Method
Operation Broken Silence started accepting gifts of cryptocurrency in 2020. Since then, we’ve received a number of fantastic questions about this exciting new form of philanthropy. Five questions in particular keep coming up. We’ve answered them below.
What is cryptocurrency?
Cryptocurrency is a digital asset that circulates on the internet as a medium of exchange.
According to Cryptopedia, cryptocurrency employs blockchain technology — a distributed ledger of transactions that is publicly available — and is secured by advanced cryptography. This revolutionary architecture allows for certainty that cryptocurrency coins and tokens can’t be double-spent.
Basically, cryptocurrency is a payment method that can be exchanged online for goods and services. It’s helpful to think of cryptos as tokens you buy to play games at the arcade. You’ll need to exchange real-world currency (such as U.S. dollars) for a cryptocurrency to access a specific good or service.
The first cryptocurrency to achieve mainstream success was Bitcoin, and other “cryptos” have grown in popularity and value since then as well. There are now a number of secure, user-friendly platforms you can invest, trade, and make payments through, which has led to an influx of new crypto-users.
Is cryptocurrency really a thing?
Despite the naysayers, by all appearances crypto has broken into the mainstream and is now part of the world’s financial system.
Gemini, one of the most respected cryptocurrency exchanges, explains why in their 2021 State of U.S. Crypto Report:
By conservative estimates, roughly 14% of Americans own crypto. That’s 21.2 million adults. Other studies suggest that number is even higher.
A whopping 63% of U.S. adults are defined as crypto-curious, meaning they want to learn more about the technology. Roughly 13% of people in this group plan to purchase cryptocurrency soon, which would nearly double the number of crypto investors in the U.S.
A majority of crypto owners say they hold crypto for its long-term investment potential. Roughly 69% buy and hold, compared to 36% who actively buy and sell to achieve immediate profits and the 27% who actively use it to make purchases.
In 2020, a number of institutional investors came out in public support of cryptocurrency. Major companies like PayPal, Square, Tesla, and MicroStrategy put forward plans to support crypto payments or added large crypto holdings to their balance sheets. A number of other companies are exploring further applications of the blockchain technology that cryptocurrencies are built on.
Why is OBS accepting crypto gifts?
Our decision to accept crypto gifts stems from our long-standing reputation of being a forward-thinking nonprofit.
When it comes to fundraising and elevating the supporter experience, we’ve always been a step or two ahead of the rest of the nonprofit sector. A few examples:
We were one of the first nonprofits to join the Giving Tuesday movement, helping to drive the annual event to one of the biggest giving days every year.
We became an early adaptor of online peer-to-peer fundraising, which empowers our supporters to raise tens of thousands of dollars for our mission from friends and family.
Our recurring donor program is so successful that we’ve been the subject of several case studies, including this one by Classy, the world’s top fundraising platform. Today, recurring giving is the “new thing” many nonprofits are chasing.
Our leadership began exploring cryptocurrency as a giving opportunity in 2017. At that time, we sensed that crypto was an opportunity to reach potential new supporters and propel our mission forward at a faster pace. Gemini’s 2021 report confirms our feeling was accurate —estimating that 74% of crypto owners are 25-44 years old— the age demographic that makes up the majority of our support base.
Unfortunately, there weren’t any user-friendly options for crypto fundraising back then. We decided to keep an eye on the emerging field and jump in at a later date.
In 2020, a long-time donor asked if he could donate crypto instead of giving online by card. A few other donors soon followed suite. That was the green light we’d been waiting for. Operation Broken Silence has received a number of crypto gifts since then.
Operation Broken Silence is partnered with our friends at The Giving Block crypto donation platform to accept donations. Their team of professionals has made donating crypto to our mission in Sudan incredibly easy and secure. Seriously, give it a go:
Are there benefits to giving crypto instead of cash?
The IRS has classified cryptocurrency as a property asset for tax purposes. This means there can be unique tax advantages when you donate crypto to our mission.
According to our partner The Giving Block, taxes on your crypto are similar to taxes on stocks. In short, you end up paying short or long-term capital gains taxes on any gains on your cryptocurrency investments. The rate you pay and whether or not it is considered a short or long term gain depends on how long you’ve held the crypto asset:
If you’ve held a crypto asset for less than one year, it’s considered short-term.
If you’ve held an asset for more than one year, it’s considered long-term.
This is why cryptocurrency can be a preferred giving method. Donating crypto means you can end up paying no capital gains taxes on appreciated crypto, get a fair market value deduction, and Operation Broken Silence receives an even larger donation than if you just sold your crypto and donated cash. Pretty cool, right?
Consult a qualified financial advisor to learn more.
How does OBS use crypto donations?
We sell most of the crypto our donors give, using proceeds to fuel the programs we support in Sudan.
Operation Broken Silence “holds on for dear life” (HODL) to a fraction of crypto gifts. We believe it’s important to keep skin in the game, just like so many in the crypto community do. It also helps to drive more attention and education, making learning about crypto easier and more accessible.
Our team sees long-term investment potential in cryptocurrencies. HODLing a small portion of gifts can lead to more money for the education and healthcare programs we support in Sudan at a later date. Crypto really can change the world.
About Us
Operation Broken Silence is building a global movement to empower the Sudanese people through innovative programs as a 501(c)(3) nonprofit organization.
We focus on empowering Sudanese change makers and their critical work. Learn more here.
Donations are tax-deductible within the guidelines of U.S. law. Give crypto now.
None of this is financial or tax advice. Please do your own research and speak to a qualified financial advisor before making any investment and giving decisions.
