Getting Ready for Crypto Revenue? Read This!
The decision is made. The mother ship is headed to Planet Crypton to cultivate and accept gifts of digital currency! While the particulars may differ depending on the organization, the following should help in planning for this exciting and (hopefully) successful journey. If you missed part one of our series, get the basics of cryptocurrency (such as Bitcoin) gifts and bequests in another post.
#1 Figure out how your organization would accept a large Bitcoin gift that is offered right now.
You need a plan. If someone calls tomorrow about making a crypto-bequest, that’s one thing. A major gift would be quite a different story. Such contributions are often “philanthropy in a hurry.”
The urgency can stem from many factors, but with Bitcoin, it could well be that the price has reached a point where the donor gets some serious tax advantages from giving it now. Bitcoin prices are subject to wild swings. A donor will not hesitate to move a gift to a different organization if the best that you can do is “we’ll get back to you next week after we figure this out.”
You can make a contingency plan. For instance, try contacting one of the prominent Bitcoin fundraising platforms (The Giving Block, for example) and signing up. This is a fine way to ensure that your charity doesn’t start sending donors to the competition.
Frankly, for a good many charities, an existing platform may be an immediate and long-term answer to the “gift acceptance” question. (Remember: the only way to accept a Bitcoin donation directly is into a preexisting digital or “hard” wallet. If you don’t know what that is, chances are good that your organization doesn’t have one.)
The crypto-literature is also filled with discussions of Bitcoin gifts being made through large donor-advised funds like Vanguard or Fidelity. We believe that to be a workable possibility, but it is a little more complicated and may be resisted by some donors.
#2 Make sure someone knows how to speak Bitcoin.
Representatives of a charity will be dealing with potential crypto donors. They will have to understand the basics and be able to use the right terminology directly. (Example: in Bitcoin, “key” means “password.”)
This knowledge can be gained from books, professional education courses and, if warranted, from consultants. If your charity decides to engage a consultant for this undertaking, that person can probably help with most of the items on this list. (CCK hint: Most of the fundraising platforms and donor-advised funds can probably offer basic educational tools as well. After all, their business depends upon your fundraising success.)
#3 Update the Gift Acceptance Policy.
If your charity has no such policy, this is a fine time to implement one. As to the section on cryptocurrencies, some charities may wish to adopt screening processes to minimize anonymous gifts from undesirable sources, such as terrorist groups. Less sensationally, an organization should have standards for which currencies it will and will not accept.
A fundraising platform can help with that question. No charity will adopt a “yes” and “no” list, as there are over 2000 digital currencies, with new ones always arising. It is likely that the majority of gifts will involve Bitcoin or one of about a dozen other well-known currencies.
#4 Update the Investment Policy.
Will your charity always cash out cryptocurrency gifts immediately? What if the price sinks right after the gift? Hold or sell? These and other issues can be addressed with the charity’s board and/or financial advisors.
#5 Isolate the demographic.
For now, it appears that about half of Bitcoin resources in this country are controlled by millennials. So, at least at the beginning, that segment of your donor file should be a focus, followed by adult Gen Z’s and younger Gen X’s. Some charities may be a little light in that demographic, so now may be a good time to freshen and expand the file.
Whether existing or recently acquired, Bitcoin donors and prospects are apt to be tech-savvy professionals with significant financial resources. The solicitation approach needs to be tailored to that demographic.
#6 Settle on the method(s).
How to reach this audience? Every charity has its own way of connecting with supporters. It is useful to keep in mind, especially for any “donor acquisition” efforts undertaken to cultivate crypto-giving, that snail-mail solicitations are not ideal for this audience. Surprisingly, even standard Internet or Facebook appeals may not produce the desired results.
The current literature suggests that Bitcoin users are apt to be found on Instagram or Reddit. There are doubtless other places where these donors can be “mined,” and a successful effort will certainly require some diligence in that area.
#7 Let the world know that your organization has joined the Bitcoin Brigade.
Jumping into the crypto-world will distinguish an organization as forward-thinking, thoroughly modern and “in sync” with the audience described above. Over the long term, and quite possibly in the short term, this image can only enhance revenue streams. It is also a subtle way to let the community know that “ABC Organization is modern and forward-thinking.”
About CCK Bequest Management
The CCK Bequest Management team is more than a group of legal professionals managing your probate processes. When problems emerge in a given case, we are there to take the pressure off your organization and find a way to resolve the issue. For instance, the charity doesn’t need to worry about tracking down someone to assess the value of an exotic asset – we do the legwork for you! Most importantly, we help our client charities give testators’ families the considerate and compassionate attention that they deserve and need in their moment of sorrow.