Putting crypto in the collection plate
With technology being used more and more in place of people’s wallets, there has been a steady increase in places that accept payments directly from phones. That includes cryptocurrency, a decentralized digital form of currency based on blockchain technology that is stored in a digital wallet.
In 2021, the percentage of Americans aged 18 to 49 who own Bitcoin, the most well-known cryptocurrency, rose to 13 percent, roughly the same as the percent who invest directly in the stock market, a Gallup survey showed.
In April, Coinbase, the world’s largest cryptocurrency exchange, made its stock market debut, giving cryptocurrency increased legitimacy.
With more investors reducing the amount they owe the governent by making charitable donations, donating crypto has become more popular.
In fact, hundreds of faith-based nonprofits, ranging from The Salvation Army (a Faith Counts partner) to Compassion International to Ronald McDonald House Charities, have become recipients.
Churches have also jumped onboard.
Fern Creek United Methodist Church in Louisville, Kentucky, has been accepting cryptocurrency for a while, according to a Christianity Today report. Longtime member Tim Totten said he and several other members were involved in Bitcoin and realized there were considerable tax benefits to donating some of it.
In October, Engiven, a cryptocurrency donation management platform, announced it had facilitated a $10 million Bitcoin donation to a Christian ministry, calling it the largest bitcoin donation known to date. The donor was a devout older man who started investing in cryptocurrency a decade ago when a bitcoin could be had for around $100. They’re now worth more than $50,000 each.
James Lawrence, Engiven’s CEO, says the size of the gift and age of the donor show that cryptocurrency is much more than a trend favored by millennials.
“While some cryptocurrency donations are made by young crypto millionaires, the reality is that most major crypto donations are coming from investors and philanthropists who own crypto as part of their overall investment strategy,” he said in a press release.
Cryptocurrency represents a totally new donation stream for houses of worship. The only thing is the value of these types of gifts can fluctuate wildly.
Liberty Live, a church based in Hampton, Virginia, solves this problem by immediately liquidating cryptocurrency donations and turning them into dollars.
With dozens of major cryptocurrencies—and counting—in circulation, experts say this could be the best way to avoid scams.
For now, if your house of worship does accept a gift donation of cryptocurrency, it will most likely be treated as a non-cash contribution–more like a property gift than a cash gift. The church should acknowledge the gift, but the responsibility to document the value for the purpose of income tax deduction will be on you.
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