Getting funding means that a donor has to be able to send money to the nonprofit, and the nonprofit then has to be able to deploy those funds across their programs. It sounds simple, but in a world of banks, regulations, third-party companies, fees, sending money overseas, and so on – a seemingly simple need becomes very complex. All of this red tape can have a detrimental effect on the end goals of nonprofits. The nonprofits become less efficient, donors get frustrated because they know that 100% of their contributions are not being utilized, and ultimately, communities in need get less support.
For those that don’t know all the many benefits of bitcoin, you may be scratching your head on how bitcoin can impact nonprofits and philanthropy.
Let’s start out by saying that bitcoin is a nearly-instant payment method. If a nonprofit accepts donations in bitcoin, they open themselves up to almost instant funding without having to wait for any banks, checks to clear, credit card deposits, or any third-party company to facilitate the transfer of funds. Bitcoin transactions are sent over the internet, and as long as the nonprofit has internet access they can accept and use bitcoin donations. In minutes, funds can be allocated to where the nonprofit sees the most need.
Besides transaction speed, we also know that bitcoin is borderless. You can send bitcoin to anyone, anywhere in the world. You can send money from the United States to Africa, nearly instantly, without having to go through anyone else; it’s truly global.
Bitcoin has very low fees. As we mentioned above, bitcoin removes the necessity of any banks or third party needed to handle the transaction process. Donations are sent directly from the donor to the nonprofit. A benefit of this is a very low fee required to accept bitcoin payments. When you swipe your credit card or provide your credit card number online, the process may involve the nonprofit, a credit card company, an online payment service provider, and a bank account to receive the donation. In most cases, each party is taking a cut, and the more parties involved can mean more processing time. With bitcoin, you are paying pennies instead of dollars to process transactions.
Speed is everything. For nonprofits that work in disaster relief, bitcoin can become their savior. In times of major crisis (think about earthquakes, tsunamis, famine, disease), having enough funding can determine whether someone eats or doesn’t eat that day. Bitcoin is equipped to address the urgency of these situations by offering low fees, quick and direct transactions, and making it possible for anyone in the world to have a positive impact in the moments when it’s most desperately needed.
**Bitcoin allows nonprofits to be effortlessly transparent. **Transparency is a big deal in the world of philanthropy, where a nonprofit needs to be able to operate on a lean scale, and account for every penny. Trust is a big deal with donors, and they want to be able to know that their money is being used efficiently. The Bitcoin block chain gives nonprofits the rare opportunity to ‘open their books’ and be able to seamlessly have the world see how they spend their funds. This is optional of course, since nonprofits don’t need to disclose their bitcoin addresses, however, if they do, the trust gained from such a move would greatly improve how people think about them and the work that they do.
“We do save a lot of money in fees since most of our donations come in as bitcoin, and we have services that are provided at no cost to nonprofits, such as our donation processing through BitPay.” Connie also said “I believe our donors do greatly appreciate that more of their funds are going to the cause. I think what also excites our supporters is that we are leveraging this new technology to support important causes and reaching out to nonprofits to educate them about the benefits of the technology. We are also one of the only organizations working in developing countries to demonstrate the social impact of bitcoin, and I think our supporters appreciate that as well.”
Charities that begin to accept bitcoin can enjoy all the benefits of the most efficient payment network available, be able to apply donations immediately, without having to forecast future donation campaigns months in advance because of funding delays. Monies can be used immediately, which improves organization efficiencies ultimately supporting the organizations goals. Accepting bitcoin is also an exciting way to generate some marketing as more eyes and ears will hear about issues and be able to help fund them.
By beginning to accept bitcoin, many nonprofits have grown to become leaders in both technology and vision in the philanthropy community. Great examples of this include organizations like The Water Project, United Way, Save the Children, Global Impact, BitGive Foundation, and Sean’s Outpost. Sean’s Outpost in particular is a great success story of how bitcoin is impacting their organization.