Have you heard about Bitcoin? It’s been all over the news lately, and many non-profits have been asking whether or not they should accept Bitcoin for donations. In this article, I am going to present a quick introduction to what Bitcoin is, and help you decide if your non-profit should accept Bitcoin donations.
First, a little disclosure: I am not an accountant or attorney. You should consult your accountant or attorney regarding how to process and account for Bitcoin donations as well as how to prepare receipts for Bitcoin donors prior to accepting them at your organization.
What is Bitcoin?
The short answer for those who are non-technical is that Bitcoin is a new digital “currency” or “store of value” that exists on computers and on the web. Bitcoins are worth a certain amount of money, can be used in many places to buy and sell things, and can be traded in for US Dollars, Euros or other forms of currency at an ever-changing exchange rate.
Bitcoin is a little like gold. It is worth something, can be used to buy things, or can be sold for dollars, euros, pesos or other currency.
For a slightly longer, but still fairly non-technical explanation of what Bitcoin is, take a look at the following video, prepared by WeUseCoins:
Why Does Bitcoin Matter?
You may be asking yourself, “Why should I care about Bitcoin? I already accept donations in US or foreign currency. What gives?” Fair enough. You shouldn’t spend lots of time thinking about Bitcoin, and deciding whether or not to accept it shouldn’t take up a considerable amount of your time or energy.
However, you should think a little about Bitcoin and make a decision on whether or not to accept it. Why? Well, consider the following:
- As of the time of this article, each Bitcoin is worth in excess of $500 US (see the current exchange rates here)
- There are currently over 12 million Bitcoins in circulation (see the current figures here)
- An increasing number of people and businesses are using Bitcoins (see the story, here, about a car dealer in San Francisco that recently started accepting Bitcoin for payment)
- Major media outlets are covering the growth of Bitcoin (see a story in the Washington Post here)
There are a lot of Bitcoins out there, and lots of people and businesses are starting to use them for real-life transactions.
Who Uses Bitcoin?
Right now, the majority of the people who use Bitcoins are those who would be considered “early adopters.” These are the types of folks who work in tech companies, see computers or the web as a hobby, or are very comfortable around computers and the Internet. That being said, the number of Bitcoin users is growing every day, and more and more people who are less tech-savvy are being introduced to this new currency.
Should Our Non-Profit Accept Bitcoin Donations?
Right now, accepting or not-accepting Bitcoin donations is not likely to be a make-or-break decision for you. That being said, if your donors tend to skew younger or are generally tech-savvy or “early adopters,” accepting Bitcoin for donations could appeal to your donor base and lead to more and larger donations.
A good number of non-profits have started accepting Bitcoin donations (see a list here). Several companies have popped-up which make it easy to accept Bitcoin (including Coinbase and BitPay). Both of these payment processors have lower fees for Bitcoin donations than you will find at any credit card processor (at Coinbase, you can currently receive your first $1 million in donations with no processing charges). Both also make it easy to accept Bitcoin donations and immediately convert them to US Dollars, Euros or any other currency, which can then be handled as you handle other donations.
Setting up a Bitcoin donation page / capability shouldn’t take long (an hour or less for your web team, in my estimation)… so, should you accept Bitcoin donations? As I said earlier, it won’t be make -or-break for your organization, but if you have the time and technical capabilities, it wouldn’t hurt to begin accepting Bitcoin donations. If you have a donor base that is very tech-savvy, then it would likely help you to accept Bitcoin, as it will appeal to your targeted demographic.
How Do We Get Started Accepting Bitcoin Donations?
It’s pretty easy, actually – just go to Coinbase or BitPay and sign-up for Bitcoin processing. Then, set up a special Bitcoin donation page on your non-profit’s website and include “Bitcoin Accepted” logos and links on your donation pages to let people know they can donate using Bitcoin.
If you have a tech-savvy donor base, you can also consider sending out a blast e-mail to your list letting them know that you now accept Bitcoin donations for your non-profit.