A FEW RHODE ISLAND-BASED nonprofits have started, or are beginning to accept, cryptocurrency as a donation option. / AP FILE/KIN CHEUNG
PROVISION – Fundraising is an important element to a non-profit organization’s operations so that the organizations can serve their respective communities. While organizations receive regular monetary support, some local nonprofit leaders previously told Providence Business News that local nonprofits need to look closely at their business models and how they raise money to be successful in the long run.
A small handful of local nonprofits, in an effort to expand their donation portfolio, are now dipping their proverbial toes into accepting a new form of currency that can be valuable and volatile at the same time.
The Rhode Island Community Food Bank, East Providence-based We Share Hope, the Cranston Public Library Association — a nonprofit subsidiary that helps raise funds for the library — the Providence-based Howard Brain Sciences Foundation and the Association of Migraine Disorders in North Kingstown are non-profit organizations that have confirmed that they accept, or are beginning to accept, cryptocurrency in addition to the traditional fundraising methods they use to raise money for their organizations.
Cryptocurrency is a digital currency where transactions are verified and records kept by a decentralized system using cryptography, rather than by a centralized authority or bank.
Lisa Roth Blackman, the food bank’s chief philanthropy officer, told PBN that the organization — which plans to accept up to 70 different cryptocurrencies — recently started looking at cryptocurrency as an option because it wants to be in a position to “help anywhere, everywhere.” to accept. She also said she saw a case study in which the Food Bank for New York City was contacted about a year ago by a group seeking to donate a non-replaceable token to the organization, ultimately resulting in a $1.5 million gift. used to be. However, the New York-based food bank had no way of receiving it, Blackman said, and as the organization came up with a solution, it became a wake-up call.
“It goes to show that we can’t assume that there aren’t people here who have these assets and want to do good in the community, and who would like to find places that accept them to fulfill their philanthropic visions,” Zwartman said.
Edward Garcia, executive director of both the Cranston Public Library and its association, said the library launched its cryptocurrency donation portal late last month. Garcia says he started looking at cryptocurrency as an option in early August and in his research found that there are cryptocurrency investors who are younger and more likely to donate cryptocurrency to a non-profit rather than traditional money. We Share Hope Development Director Wendy King Mercurio also said that cryptocurrency is being used by younger individuals.
All five local organizations are partnering with Miami-based technology company The Giving Block to help manage their cryptocurrency donation business. Giving Block co-founder Pat Duffy told PBN cryptocurrency donations are sent to organizations by donors and then immediately liquidated “within a matter of seconds” in US dollars at the price of that cryptocurrency.
Cryptocurrency is also more volatile than the stock market at times. In June, the prices of Bitcoin and Ethereum plummeted and US congressmen proposed legislation to transfer regulations on Bitcoin and Ether to the Commodities Futures Trading Commission to regulate the industry, according to the Associated Press.
However, Duffy says nonprofits are protected from the volatility because they don’t have to choose which cryptocurrency is more valuable and the risk of currency values rising or falling lies with the donors.
“What’s important is that the donor sends you 1,000 units of a $1 cryptocurrency, what the nonprofit gets is $1,000 in cash because once it gets into their account, it’s sold for dollars,” Duffy said. He also noted that as long as non-profits don’t hold cryptocurrencies and deal with the downside, when upward moves occur, the organizations benefit greatly from it.
THE RHODE ISLAND Community Food Bank in Providence is one of the few local non-profit organizations to accept cryptocurrency as a donation option. / PBN FILE PHOTO/JAMES BESSETTE
Local nonprofit leaders also say they are doing, or plan to do, digital campaigns, such as social media posts and e-newsletters, to attract cryptocurrency donors based on guidance they’ve received from The Giving Block, as cryptocurrency donors are more active online.
Neither the Rhode Island Foundation nor the United Way of Rhode Island were aware of any local nonprofit organizations besides the food bank accepting cryptocurrency as a donation. United Way CEO Cortney Nicolato says nonprofits that accept cryptocurrency donations are not surprising because with the way people exchange dollars digitally today, such as through Venmo or Zelle, nonprofits need to start thinking about going more digitally. fundraising.
However, Nicolato said that accepting cryptocurrency is very complex given the large number of different such currencies available, it takes time to figure out which cryptocurrency aid providers are credible and to find affordable suppliers to support non-profit organizations. help manage cryptocurrency. The Giving Block charges between $2,500 and $7,500 for various fees and services, and also offers custom services at a unique price that depends on the services a nonprofit seeks.
“All of that [research] takes time, effort and understanding of the cryptocurrency world. Especially for our smaller organizations they have no [chief financial officer] or maybe have a part-time head of accounting or whatever that may be,” Nicolato said. “Even developing and determining which organization to use for cryptocurrency processing takes time and effort.”
Nicolato did say that helping nonprofits, especially smaller Rhode Island organizations, understand cryptocurrency “perfectly” is within the scope of what the proposed United Way nonprofit center could offer. While it is unclear whether cryptocurrency support will be offered by the center when it first launches, Nicolato said.
Crypto can be beneficial to nonprofits, and fast. Duffy said The Water Project in New Hampshire, through cryptocurrency, has raised half of its $4 million budget goal in less than three weeks. He noted another organization that has a budget target of $500,000, nearly tripling it with cryptocurrency donations in a very short time.
Garcia, Blackman and Mercurio all say it is too early to say whether cryptocurrency will become a game changer for their respective organizations in terms of raising more funds to support their operations, and do not have exact fundraising goals through cryptocurrency for their respective organizations. . Blackman said the food bank has a goal of distributing £15 million of food this fiscal year and that the organization must meet “big budget targets to ensure we can reach that goal.”
Mercurio said We Share Hope has received a $108 cryptocurrency donation from The Giving Block, but that is the only cryptocurrency donation the organization has received since the option launched in February. Garcia said the library is running a year-long pilot program to see if cryptocurrency can work for it — raising at least $2,500 to cover The Giving Block’s affiliate costs.
“If [cryptocurrency donations] is successful, it just allows us to do a lot more programs, which would be great,” said Garcia.
James Bessette is the editor of PBN’s special projects and also covers the non-profit and education sectors. You can reach him at [email protected] You can also follow him on Twitter at @James_Bessette.
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