Sara Jolly, executive director of development for the Nicklaus Children's Hospital Foundation in Miami, says the recent influx of wealth to South Florida has been a boon for her organization and other non-profits. "We are now looking at gifts that might have taken five years to cultivate previously."
Is Crypto in Florida's philanthropy future?
The future of giving may be bitcoin and other digital currencies.
A growing number of Florida non-profits are accepting donations of digital tokens.
In spring of 2020, the Nicklaus Children’s Hospital Foundation in Miami got a call from a significant donor. “He said, ‘Hey, look, I was one of the first investors in cryptocurrency, and I’m going to cash out, and when I cash out, I want you to be ready to take my gift in crypto,’” recalls Sara Jolly, executive director of development for the foundation.
The hospital foundation partnered with an organization called the Giving Block — which facilitates the transfer of cryptocurrency donations to non-profits — and got its first crypto gift from the donor later that year. It’s gotten seven more crypto donations since then, totaling in the six figures. “You’re not looking at a huge number, but seven of those gifts were anonymous, so seven of those folks, we might have never reached before,” says Jolly.
The Giving Block platform, which dozens of Florida non-profits now use, accepts more than 70 types of cryptocurrency (including bitcoin and ether) and automatically converts all crypto donations into cash at the moment they’re given. The service, which charges a flat fee and a processing percentage per transaction, also sends an automated receipt to the donor. “We don’t hold any crypto. We don’t trade crypto. We don’t invest in crypto. Essentially, it’s the same thing as giving a cash gift, but obviously the tax implications are a little bit different for folks giving crypto,” Jolly says.
There are solid incentives for crypto holders to give to charity. Because cryptocurrency is treated as property, any profit investors make when selling it is subject to capital gains taxes. If they donate that appreciated cryptocurrency to charity instead, they can avoid capital gains taxes and receive a charitable contribution tax deduction to boot.
Whatever the motivations, crypto philanthropy is growing fast. Fidelity Charitable, which operates the nation’s largest donor-advised fund, reported a 12-fold increase in cryptocurrency donations in 2021, totaling more than $330 million. The Giving Block, meanwhile, completed more than $69 million cryptocurrency transactions for non-profits last year — a 1,558% increase over 2020. It says that the average cryptocurrency donation increased 236% to $10,455 over the previous year. The service also facilitated $12.3 million in NFT projects donated to charity last year.
Despite the enthusiasm, some non-profits have gotten blowback for accepting digital tokens. The Mozilla Foundation, a San Francisco-based non-profit that created the Firefox web browser and promotes an open internet, temporarily stopped accepting crypto donations in January amid criticism about the environmental impacts of crypto mining, which relies on computer power to verify transactions in an online ledger. In April, the organization said that it would no longer accept “proof-of-work” cryptocurrencies (such as bitcoin), “which are more energy intensive,” but will accept cryptocurrencies that use a “proof-of-stake” mechanisms, which are “less energy intensive.”
More recently, the Wikimedia Foundation, which runs Wikipedia, announced it was closing its BitPay account (which processes crypto donations) for a range of reasons, including risk to the organization’s reputation. Wikimedia reports that it received $130,100 in crypto donations last year, which accounted for less than one-tenth of 1% of the organization’s revenue.
Controversies aside, Florida organizations that have jumped on the crypto bandwagon told FLORIDA TREND they see a big upside by accepting the digital donations.
Blake Summerlin, communications manager for the League of Women Voters of Florida, says the organization started accepting crypto donations last year, and while they haven’t surpassed the pace of traditional donations, there has been a “slight shift” in larger donations coming in via cryptocurrency, versus check or wire transfer. “Cryptocurrency investors tend to be young and tech-savvy, which is an audience the league is looking to attract into our more old-fashioned membership model,” says Summerlin.
Jolly says that with an estimated global population of 300 million crypto users — “that’s more than CashApp and Venmo combined,” she notes — and 83% of millennial millionaires holding cryptocurrency, it’s a segment of potential donors they can’t ignore. “When we think about appealing to a specific demographic, especially the younger community — and given our geographic location of Miami and the crypto community that’s flocking here — it was really important for us to be able to do this,” Jolly says. “We want to meet the donors where they are.”