Many large charities, despite being entrusted with accepting and managing funds that benefit the public, are accepting bitcoin and other cryptocurrencies – volatile forms of digital money – as donations.
Take, for example, the Silicon Valley Community Foundation, one of the country’s largest charities. It held a third of its US$13.5 billion investments – nearly $4.5 billion – in digital assets according to its annual financial statement.
As experts in the tax and financial issues charities face, we have spent considerable time examining what got nonprofits dabbling in digital currencies in the first place and what could go wrong as a result.
Volatile juncture
While the Silicon Valley Community Foundation probably holds more cryptocurrency than any other charity, it is not unique. Fidelity Charitable, the top U.S. charity in terms of the donations it amasses annually, said digital money was its fastest-growing category in 2017.
Smaller charities are also accepting donations in bitcoin, as are new charities focused solely on cryptocurrency. The giving of digital money surged in 2017, just as the market for these newfangled assets boomed.
Bitcoin, the most common cryptocurrency, rose by 1,318 percent against the U.S. dollar in 2017.
XRP, another popular kind of digital money, gained 36,018 percent over the course of the year.
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