How Cryptocurrencies Can Help In Promoting Social Welfare And Charity
The intention behind the development of virtual currencies is to provide a more democratic payment system. People have more freedom over their money with cryptocurrencies. Initially, digital currencies were treated as investment options.
With wide acceptance and exposure, crypto coins are now used for various purposes such as making business transactions and paying bills. Moreover, cryptocurrencies can help non-profit organizations, charities, even for relief distribution, etc. Let’s see how cryptocurrencies can help in promoting social welfare and charity. Read here about the steps to buy bitcoin
Why cryptocurrencies Are Suitable for Non-Profits?
Cryptocurrencies are seen as a system that can help the underprivileged for income inequality, financial inclusion, and a better financial system. Here is the main reason why cryptos can help non-profits.
- Transparency: As the underlying technology blockchain provides a distributed public network for crypto donations, it is transparent to everyone. So there is less chance of manipulation or corruption of the money that is transferred for social purposes.
- Faster and Cost-effective: Blockchain technology is a peer to peer network, so there is no third party that can interfere in the transaction process. So the donations are relatively faster and cost-effective than traditional processes.
- Beneficial for the Non-profits: As there is no third party involved and the transaction fees are very less, so the recipient gets more money. Again, they can also get tax benefits as cryptos are considered non-cash donations.
- Becoming More Trustworthy: Initially, people are more skeptical about the security and safety of the crypto space. Today, cryptocurrencies are becoming more secure due to continuous development in the field. With the wide adoption, people are now building trust in cryptocurrencies. However, despite the wide acceptance and high-security, there will be some risks.
- Anonymous Donations: Many people want to donate anonymously, it is their personal choice. Earlier, people ask the non-profit organizations to keep their name secret from the public. Now, cryptocurrencies with the privacy features allow donors to donate anonymously.
- Global Donations Are Easier: With cryptocurrencies, anyone can donate internationally without paying any exchange fees or bank holdings. So it is very easy and simple to donate across the world.
How Can Non-Profits Accept Donations in Crypto?
Now let us understand how non-profit organizations can accept donations in cryptocurrencies.
- Choose a Good Platform: First of all, non-profit organizations need to choose a good platform for accepting donations. There are many cryptocurrency donation platforms but it is important to identify and opt for a well-known platform. Coinbase, BitPay, CharityNavigator are some of the popular crypto donation platforms.
- Hire a Financial Advisor: It is important to hire a professional financial advisor who can manage all the transactions in line with crypto and financial regulations. So don’t hire someone who doesn’t have any prior experience with cryptocurrencies. Hire a financial advisor who had dealt with cryptos previously.
- Connect With Other Non-Profits Who Accepted Donations in Cryptos: Connecting with other non-profit organizations can help to get some useful tips on how to accept donations securely. It can also give you to manage your crypto donations in a better way.
- Save like Securities: As the value of cryptocurrencies changes with time. You may hold them to increase their value and sell them when the value increases. For more information on how cryptocurrencies grow over time.
- Tax Laws: Knowing the tax laws for the donations are very important. As cryptocurrencies are considered as property by the IRS. So it is important to provide a thank you note with proper documentation for tax benefits.
Taking these steps can help charitable organizations to maintain safety for accepting donations in cryptocurrencies. Due to the decentralization nature of blockchain technology, it is easier to donate in cryptocurrencies. Moreover, cryptocurrencies also have a major role in the distribution of relief during natural calamity and disaster.
With the wide adoption of cryptocurrencies, many non-profit organizations have come forward to accept donations in cryptocurrencies. Again, these organizations can also distribute funds to people in cryptocurrencies.
Cryptocurrencies can also be sent to the people who are in need through airdrop during a disaster. Due to this reason many foundations, charitable organizations, schools; museums are accepting donations in cryptocurrencies. If you are running a social welfare community or organization then adopt cryptocurrencies and blockchain technology.
Andrea Parker is a reporter for Zobuz. She previously worked at Huffington Post and Vanity Fair. Andrea is based in NYC and covers issues affecting her city. In addition to her severe coffee addiction, she’s a Netflix enthusiast, a red wine drinker, and a voracious reader.