In 2022, the Rhode Island Community Food Bank announced it would start accepting donations of cryptocurrency, joining a small group of local nonprofits seeking to ensure they didn’t miss out on the promise of decentralized banking.
In retrospect, the food bank could have raised more money than it has received so far in cryptocurrency donations if it passed a coin jar around its Providence office.
“We’ve received virtually none,” said Chief Philanthropy Officer Lisa Roth Blackman. “It certainly didn’t pay off for us.”
Like many nonprofits who jumped into the crypto fray, the food bank partnered with The Giving Block, which sets up online accounts for charitable organizations and immediately converts any donations to cash.
“There was a moment in time when there were a few eye-opening public gifts at other food banks,” Blackman said. “So that was part of the motivation to be in the game and have that option. Our goal is always to be where the potential donors are and to be able to process any gifts that people want to make.”
But a wave of negative press accounts and plummeting cryptocurrency values, touched off by the collapse of cryptocurrency exchange FTX and the scandal engulfing its founder Sam Bankman Fried, gave some nonprofits reason for pause.
The Giving Block provides its customers training on how best to boost cryptocurrency giving, advising them to highlight the option via social media platforms, particularly X, formerly known as Twitter.
The fallout that put cryptocurrency in a negative light “made associating yourself with the emerging technology in such a public fashion unattractive,” Blackman said, and could be a distraction.
“To give over a lot of our airspace on that platform talking about crypto didn’t feel right to us,” she said. “It seemed unseemly to be heavily promoting association with it during that time. So, we definitely pulled back.
“But did we not get any because we stopped marketing and promoting it? Or does nobody locally have crypto?” she asked.
Nancy Wolanski, director of the United Way of Rhode Island Inc.’s Alliance for Nonprofit Impact, says its 2023 survey of nonprofits found only five of 330 respondents were set up for cryptocurrency.
“But only four expected to have any crypto donations in 2024,” she said. “So clearly this is not a groundswell. I don’t think it’s part of many nonprofits’ plans at this point.”
Wolanski says of the center’s 170 members, around 20% don’t have any online giving option. Many are still relying on PayPal and Venmo.
The uncertainty around the legal framework has caused many nonprofits to hold back, Wolanski says.
“I think there is some concern about the volatility. There has been so much in the news,” she said. “And particularly for nonprofits that might not have the in-house technology expertise, taking on something like that can be intimidating.”
Much of the nonprofit sector is “donor driven,” Wolanski said.
“Most nonprofits would gladly accept cryptocurrency if the demand was there. If a billionaire called up and wanted to donate crypto, most would do some research and figure out a way to do it. But there just hasn’t been a stampede of donors pushing for that,” she said.
The Giving Block’s 2024 Annual Report on Crypto Philanthropy said 56 of the Forbes Top 100 Charities currently accept cryptocurrency, a 12% increase over 2023; 38 use The Giving Block to process donations.
The Giving Block spokesperson Luis Cisneros is confident cryptocurrency will grow in the charity sector.
“With the crypto bull market ramping up, we expect growth in nonprofits accepting crypto in the coming months,” he said. “Typically, there is a lag from when positive crypto news comes about and nonprofits reacting to it.”
Women’s Fund of Rhode Island set up its own crypto option in 2020. But CEO Kelly Nevins thinks that the cryptocurrency donor base may not overlap with smaller nonprofits that serve a distinct demographic.
A CNBC poll found men were more than twice as likely than females to own cryptocurrency. “The people who may give to us are more female leaning,” she said.
The Women’s Fund also had some negative feedback on its decision. “We had a couple of donors that weren’t pleased that we were accepting it,” she said. “They thought it gave the impression we were doing something unsavory.”
The Giving Block says more than $2 billion in cryptocurrency has been donated to charitable causes over the last five years.
Molly O’Brien, spokesperson for the Association of Migraine Disorders, which has been using The Giving Block since 2021, says the organization is the first of its kind to start accepting cryptocurrency donations.
“Our team was brainstorming creative ways to fundraise and we thought accepting donations with cryptocurrency was a new, innovative way to potentially bring in more funds,” she said.
O’Brien declined to disclose the amount of donations the group has received. As for why others may have cold feet, O’Brien cited upfront costs and acknowledged a “negative portrayal” of cryptocurrency in the media, and a “limited understanding” of its potential.
A wider exposure and growing comfort level will eventually work to the nonprofit sector’s benefit, she predicts.
“We think this could be one of the leading options for giving in the future,” she said. “The market has been on an uptrend and if this continues, investors can use charitable donations for tax write-offs ... [and] accepting cryptocurrency could be another means of income for nonprofit organizations.”
Blackman says the food bank will retain the option, for now.
“We are evaluating what we are going to do in the future,” she said. “It’s an interesting moment to be evaluating [our policy] because the value is suddenly so high again.”
