Bitcoin is increasingly becoming the preferred currency for aid organizations to collect funds from donors. Here’s how to accept Bitcoin donations.
Today, several aid organizations use crypto as a more secure, efficient, and low-cost option to receive and distribute funds worldwide. Unlike fiat currencies subjected to government and regulatory controls, Bitcoin is a decentralized currency that enables non-profit organizations to deliver financial assistance to those who need it with the utmost transparency and urgency. It also allows the organizations and their donors to track payments in real-time.
The latest statistics show that Bitcoin adoption among non-profit organizations proliferates, with enormous potential. Besides, many donors are increasingly embracing crypto as a more convenient, affordable, and safer option to gift aid organizations. However, several non-profit institutions still lack the necessary structures and ideas for accepting crypto payments. The following discusses how your non-profits can take Bitcoin from donors.
Personal Wallet
A personal wallet is the most convenient way to process Bitcoin payments. Having a Bitcoin wallet enables you to receive, send and store Bitcoin without external intervention. Bitcoin is compatible with online and hardware wallets. Internet-based wallets are a great option since you can access them anytime, anywhere. However, they could also be prone to cyber threats.
Hardware wallets provide better security because they don’t connect to the online grid. Nevertheless, having a personal wallet enables you to directly accept Bitcoin funds from other organizations and individuals. Besides, you will not be charged any transaction fee for accepting Bitcoin through your wallet.
Crypto Exchange Platform
Several charity organizations process Bitcoin payments through reputable crypto exchange platforms such as Trustpedia and you can also check the Cryptocurrency Price Prediction. Unlike a personal wallet, accepting funds through a crypto exchange platform carries minimal transaction fees. The costs usually vary based on the volume of transactions and other factors. However, Bitcoin has lower transaction fees than bank transfers and credit cards.
Crypto exchange platforms handle various transactional processes, including Bitcoin holding, currency conversion, and money transfers but, non-profits may need to collect donor information and provide donor support independently.
Suppose you intend to hold the received Bitcoin funds. In that case, a crypto exchange company can also help you keep track of market conditions and Bitcoin’s price movements to avoid volatility pitfalls. However, you should set clear policies around the liquidation of the assets.
Intermediaries 501(c) (3)
Intermediaries such as Donor Advised Funds (DAFs) also process crypto donations on behalf of organizations. Using a DAF reduces the organization’s administrative, legal and accounting implications to accepting Bitcoin significantly. The intermediary will handle tax receipts currency conversion and grant the donations in cash. However, they can also provide the funds in Bitcoin. DAFs are only accessible to organizations with an account. This approach is ideal for non-profit organizations that intend to remain highly involved with Bitcoin and provide it as an option for their donors.
Specialized Crypto Processors
Payment processors have been around for a very long time, helping non-profit organizations process funds across international borders. Today, various specialized crypto payment processors can receive, convert and send Bitcoin on behalf of non-profits for a service fee. Those companies also provide automated cash and tax receipts and donation widgets for marketing campaigns.
A specialized crypto payment processor can also act as a custodian, holding the received Bitcoin funds on its platform until when you need them. However, you must consider the assets’ volatility to know when to liquidate. Specialized crypto payment processors are suitable for non-profits seeking to make Bitcoin a core development aspect or investment.
Many options exist for non-profits to accept Bitcoin donations. However, each alternative carries unique benefits and risks that you must understand beforehand. Bitcoin has greater potential future rewards for non-profits and donors.
