How cryptocurrencies are changing the face of charity

From supply chain management to banking and even governance, cryptocurrencies and blockchain technology seem to be finding new use cases every day. Charity is another space in which cryptos seem to be making meaningful inroads.

Over the last few years, the volume of crypto-based donations has increased significantly. It is quickly changing donor demographics, funding models and the face of charity as we know it. Let's look at how digital assets can be used as donations to help those in need.

While cryptocurrencies still aren’t widely accepted worldwide, people and organisations are slowly seeing the advantages of digital assets and their underpinning blockchain technology. One sector that has welcomed crypto payments with open arms is the non-profit industry.

Also Read: How Russia-Ukraine conflict has put cryptocurrencies in spotlight

In 2014, United Way Worldwide, the largest privately funded non-profit, announced that they would accept Bitcoin donations through Coinbase. This was a monumental move for charitable and non-profit organisations the world over. Since then, As We Grow, Freedom of Press Foundation, The Water Project and numerous other charitable institutes have started to accept crypto donations.

Cryptocurrency exchanges like Binance and Coinbase have also entered the fray. They are helping people send crypto donations and setting up channels for organisations to receive them.

Binance, one of the biggest global cryptocurrency exchanges, has created the Binance Charity Foundation (BCF), which acts as the charity arm of the exchange. It has even launched a blockchain-based donation portal at the United Nations Conference on Trade and Development (UNCTAD).

Charitable donations through cryptocurrency are not a far-fetched dream. They are already happening and have made a big difference in the world. In fact, according to Fidelity Charitable, 45 percent of all cryptocurrency investors contributed $1,000 or more to charity in 2020.

Also Read: How is Bitcoin different from Bitcoin cash?

Raphaël Mazet from Alice, a financial platform for measuring the impact of non-profit and government projects, told Decrypt that cryptocurrency has a great future in the philanthropy industry. "Public trust in non-profits has been declining for years, and it's starting to affect donation levels, especially amongst smaller donors. Crypto provides a transparent payment trail showing how the money was used," he said.

While cryptocurrency investments might only seem like a tool for wealth generation, its underlying technology can make donations more accessible, user-friendly and secure. We all know that cryptocurrencies, specifically blockchains, are about transparency and immutability. These are critical factors in the non-profit industry as people want to ensure that their hard-earned money reaches the right hands.

A cryptocurrency's distributed nature ensures that every transaction is recorded in a public ledger and verified by a network of nodes. This keeps intermediaries or third parties away from transactions, ensuring there is no misuse of funds.

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Being digital and decentralised, anyone can donate money from any part of the world without paying an exuberant transaction fee or waiting for hours to process the transaction. Anonymity and tax breaks have also pushed the popularity of crypto donations.

Millennials hold the most cryptocurrency in the world. They also account for a significant chunk of the population with a disposable income and have a glint in their eye to change the world. A CNBC Millionaire Survey shows that 83 percent of millennial millionaires own cryptocurrencies. Therefore, it only makes sense that charities and non-profits set up payment methods that would help millennials and the younger generation donate to a cause.

Also Read: How to choose the right investment horizon for cryptocurrencies?

Moreover, cryptocurrencies live on the internet, and so does the younger generation. That’s why so many of the causes supported by crypto donors are those that are publicised on social media, like the war in Ukraine.

Non-profits and the Ukrainian government have been working tirelessly to ensure that people and animals are safe from the horrible acts of violence orchestrated by Russia. They have been able to do this due to the large swaths of crypto donations pouring in from all over the world. The Ukrainian government has amassed more than $30 million in donations since they started its donation campaign on February 26.

And if you want to help Ukraine by donating crypto, you can do it in many ways. You could directly transfer bitcoin or Ethereum to the government's official wallet address or donate to non-profits and organisations like Come Back Alive, Ukraine DAO, and the Kyiv Independent.