December 20, 2017

Wise Giving Wednesday: Cryptocurrencies for Charities?

Bitcoin, the cryptocurrency that started back in 2009, is getting a mountain of attention lately, this is mostly due to its meteoric increase in value, particularly in the past several months. Starting with a value of less than a dollar when it first arrived, an individual bitcoin skyrocketed to a high of $19,000 on December 18th. This digital currency, however, can be divided out so that one can send just a fraction of a coin in making a transaction or purchase. It’s no surprise that bitcoin has attracted an increasing number of investors seeking to benefit from its growing gains. 

Some early investors have become millionaires based on the coins increased value. One anonymous investor, who claims to have amassed many millions from bitcoin, recently established a fund to donate $86 million of this amount to various charities: www.pineapplefund.org.  A charitable organization applies for support and, if approved, receives a donation in bitcoins. Prior to the Pineapple Fund, a number of charitable organizations had already been accepting bitcoins as a donation option for contributors. 

There are some cautions, however, for charities and donors to consider regarding bitcoins and other cryptocurrencies: 

  • Volatile value and possible bubble. Bitcoin value can rise or drop dramatically in a short period of time, sometimes in just a few hours. Some critics are now claiming that bitcoin is a bubble that will soon burst.  For charities that accept bitcoins or other cryptocurrency, this suggests there are potential risks in holding on to the donation for a long period of time. 
  • SEC advisories. On December 11th, the Securities and Exchange Commission (SEC) issued a public statement on cryptocurrencies and initial coin offerings that recommends that investors and others find out more about such opportunities before they become involved and ask critical questions such as whether trading data is available and the identity of the individuals involved. 
  • Criminal activity.  As reported by CNBC and other media, criminals have used digital currencies to move money between countries or transact other business since they are harder for law enforcement agencies to track. 

Of course, there are potential issues with all forms of fundraising and donation options. Each charity needs to decide, on its own, what is best for them given the facts and circumstances.  And certainly contributors should feel free to make donations in bitcoins or other currencies for those charities willing to accept these gifts. 

Before this blog ends, as we approach December 25th we also want to wish everyone a Merry Christmas and a Happy Hanukkah which ends its celebration on December 20th this year. 


Video of the Week 

As part of our Building Trust Video Series, we are pleased to provide a video that features Mitchel Rosenzweig, Chief Financial Officer of the Jewish National Fund a (BBB Accredited Charity) which promotes, educates and advocates for community and environmental issues surrounding Israel and the world. Among other things, it plants trees in the desert, builds parks, creates new communities, bolsters Israel’s water supply, and helps develop arid-agriculture techniques.  


Recent Reports 

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

Finally, remember to let us know by going to https://www.give.org/ask-us-about-a-charity1/ if you are  interested in seeing a report on a charity not on the list and we will do our best to produce one.   

H. Art Taylor, President & CEO
BBB Wise Giving Alliance