Cryptocurrency enthusiasts have proved quite charitable, at least as far as Fidelity Charitable is concerned.
Announced today, the global charity revealed it has received $69 million in cryptocurrency donations in 2017, making it the fastest-growing asset type accepted by the firm. According to Fidelity Charitable’s annual report, the funds, which included donations in bitcoin and ether, came from 169 different donors.
The donations represent a tenfold increase since the organization started accepting bitcoin in late 2015, a figure that grew 140 percent faster than the other options (such as real estate, shares of LLCs and bags of grain) that Fidelity Charitable accepts as donations, according to the company’s vice president Amy Pirozzolo.
Pirozzolo told CoinDesk:
“It is one of the fastest growing assets that we are seeing wanting to be contributed to charity. Many people who own bitcoin or other forms of cryptocurrency do want to be philanthropic.”
But if that comes as a surprise, perhaps it shouldn’t – donations have been one of the key use cases from cryptocurrency since the beginning.
In 2013, non-profit BitGive began helping other non-profits accept donations in bitcoin and shortly after, a handful of major names announced they would trial the idea. The following year, cryptocurrency exchange Coinbase launched its own service designed to support non-profits.
Now, a cottage industry of consultants like Man on a Mission Consulting have popped up to streamline the process of allowing charities to accept this new type of value.
According to Man on a Mission founder Paul Lamb, “I think there’s a strong desire to accept not only bitcoin, but other cryptocurrencies as well, so it’s really a matter of building it and providing a menu of options from fiat to the wide range of cryptocurrencies.”
But Fidelity Charitable is also an early adopter of sorts.
The charity arm of the multinational investment firm first started accepting cryptocurrency through Coinbase’s charity service in November 2015, but until this year, it didn’t really see the funding mechanism take off. During 2016, its first year full-year of acceptance, crypto donations accounted for only $7 million.
However, throughout the first half of 2017, the firm engaged in a marketing campaign designed to increase the visibility of the service, resulting in 40 articles and a total of $11 million-worth of donations, according to Pirozzolo, who is also the head of Fidelity Charitable’s marketing efforts.
“As that took hold – and we created a web page for people to understand how you can donate this, and started buying paid search behind this, and got more mainstream media coverage and more social coverage – this whole thing really took off,” she said.
By November, the total donated had doubled to $22 million, momentum that coincided with a tweet that same month from early bitcoin developer Gavin Andresen, who said he had used the platform.
While it’s impossible to correlate funding changes directly to the tweet, the following month, Fidelity received an additional $36 million-worth of crypto donations.
Still, all this isn’t to say that more traditional donation types are at risk of being overshadowed by blockchain-based assets anytime soon.
According to a statement from the company, the cryptocurrency asset class falls within the broader category of non-publicly traded assets, which accounted for $1 billion dollars-worth of donations last year. That, in turn, fell within an even broader pool of $4.5 billion-worth of total donations.
The biggest draw to Fidelity Charitable’s platform is what’s called an investor-managed fund, which lets donors give away assets including cryptocurrency without having to pay capital gains taxes.
The result is that the total amount received by the organization typically increases relative to the donor’s tax bracket. And given that a total of 127,000 non-profits received funds from Fidelity last year, this extra money could eventually make an even bigger impact.
“This is a great win-win for both [donors] as well as the charities.”
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
Coins in a jar via Shutterstock