In all the excitement yesterday over Wikipedia's new partnership with Coinbase, another significant piece of news from the bitcoin company got rather overshadowed.
Notably, the payment processor announced that it will waiver all fees for registered 501(c) non-profit organisations accepting bitcoin through its merchant tools.
On its blog, the company explained why the move is beneficial for charitable organisations to start accepting the digital currency:
"The Internet has made it easier for non-profits to operate by enabling them to increase geographic reach and reduce the overhead required to fundraise. Adding bitcoin as a donation option is a natural next step for non-profits because it eliminates one of the most significant costs remaining – payment processing fees."
The announcement continued that any non-profit accepting bitcoin through the company would be able to instantly exchange its bitcoin donations for US dollars and receive a daily bank transfer without incurring any costs.
Lower costs boost causes
At any charitable organisation overheads inevitably eat into donations, taking away much-needed funds from the intended recipients of the money. Charitynavigator.org even cites some highly-rated charities losing over three-quarters of their funds in this way.
The percentage of funds lost to expenses is an issue that charities themselves take seriously and one that can sometimes put people off giving.
Along with premises, staffing and other day-to-day essentials of running an organisation, donations will often incur fees from payment networks for their services. While PayPal offers a slightly lower rate for non-profits (2.2% + 30 cents per transaction, down from a standard charge of 2.9% + 30 cents), credit card tend to incur standard charges of around 1.5-3%.
Bitcoin, however, enables donors to give virtually 100% of their donation to the intended charity, with only a tiny fee going to miners.
Coinbase said that US donors may also enjoy significant tax deductions based on their bitcoin-denominated donations, although this may not be the case in every country.
Apart from Wikipedia, most major non-profits do not yet accept bitcoin donations. However, some (such as UK charity Comic Relief) have said they are considering accepting the digital currency in the near future.
Furthermore, a number of smaller non-profits, including Sean's Outpost, the Women's Annex Foundation and some open-souce software organisations, already accept bitcoin alongside other cryptocurrencies.
In particular, the dogecoin community has proven very supportive of efforts to spread goodwill by donating to those in need, recently fundraising for a charity: water campaign to build much-needed wells in a drought-hit region of Kenya.
Donate image via Shutterstock