One of the secrets of a successful organization is its ability to change with the times. NGOs are no exception. African NGOs need substantial funds to accomplish their goals. As such, it is important to diversify their donation their sources of funds. Cryptocurrencies such as Bitcoins are the next frontier for non-profit fundraising. This article will highlight how African NGOs can accept Bitcoin donations in 2020.
- Bitcoin is a decentralised cryptocurrency without a central bank or single administrator that can be exchanged for other currencies, pay for products and services.
- Bitcoin was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009.
- Bitcoins are fast to transact as it takes just a few seconds, unlike bank transfers that can take days.
NGOs Accepting Cryptocurrency Donations
The number of nonprofit organizations around the world that accept cryptocurrency donations has increased in the recent past. However, most NGOS still haven’t embraced this trend. A recent survey indicates that NGOs that accept crypto in Africa, Asia, and Latin America represent 5%, 4%, and 1% respectively. Such entities include:
Beneficial Features of Bitcoin
Bitcoin transactions are highly secure compared to fiat money because of blockchain technology. They also have lower transfer charges compared to bank transfers and are easy to transfer since the entire process takes place digitally. There are no limits on how many Bitcoins you can send or receive. However, for security and regulatory compliance, some Bitcoin exchanges may have additional requirements for transfering large amounts. Lastly, Bitcoin is a borderless currency. Bitcoins can be transferred to a person in any part of the world, at any time of day or night.
Benefits of Bitcoin Donations for Donors
Bitcoin donors enjoy tax benefits. For example, the Internal Revenue Service in the United States classifies Bitcoin as an asset, and an asset intended for donation is not subjected to capital gains tax. With this exception, you are in a position to send donations without worrying about tax deductions. In addition to being exempted from capital gains tax, crypto donations will attract reduced transaction fees compared to traditional means of payment like PayPal and debit card. With Bitcoin, you can donate anonymously. For some donors, anonymity is an important aspect.
Benefits of Bitcoin Donations for Nonprofit Organizations
Bitcoin donations allow your NGO to expand your pool of donors based on the fact that different people have different preferred means of payment. Most African NGOs get their funds from the West where Bitcoin is gaining popularity. When you have time-sensitive projects or need rapid response funds, Bitcoin donation may be an ideal option because transfers take minutes unlike international bank transfers that may take days. Bitcoin transaction fees are usually low. This allows your project to benefit from the value of donations without having to worry about the huge dehuctions made by banks each time someone donates to you.
Platforms to Use to Accept Bitcoin Donations
In this era when Bitcoins have been widely accepted, there are various platforms that African NGOs can use to accept bitcoin donations. This includes:
Bitpay and Coinbase have consistently shown to have strong disregard for users and bitcoin’s decentralization. Use them with some caution. Follow #DeleteCoinbase for more information
How to Convert Bitcoins into Cash
Bitcoins have been in existence for over a decade. During this time, the system has become more comprehensive and there are now several ways that you can convert the cryptocurrency into cash. There are two main reasons why you would want to exchange Bitcoin for cash. To start with, the currency has volatile prices. If you think that its prices will decrease significantly, it makes sense to sell it as a way of protecting yourself from hefty losses. Moreover, even with the global acceptance of cryptocurrencies as a means of trading, there are relatively few establishments that accept it. As an African NGO, after receiving Bitcoins, your best option is to convert into cash to fund your programs.
There are several ways that you can use to convert Bitcoin, or any other cryptocurrency, to cash. This includes:
Sell Bitcoins Through a Cryptocurrency Exchange
To do so, you will need to create an account with one of the well-established cryptocurrency exchange operating in Africa. There are numerous such platforms including Kraken, Coindirect, LocalBitcoins, Paxful, and Remitano. For easy cash withdrawal, link the exchange account to the NGO’s bank account. once you have successfully done so, transfer the Bitcoins to your organization’s digital wallet. This process tends to experience delays when there are many transactions taking place in the system. Ensure that you get a text confirming that the cryptocurrency has been transferred to your wallet. At this point, you can sell the Bitcoins by stipulating the amount of currency you intend to sell before pressing the ‘Sell’ button. The transaction will be done at the current market price. To transfer the returns to the NGO’s bank account, select ‘Withdraw’ followed by ‘Bank wire’, and then ‘To’.
These are usually physical centers where you can sell Bitcoin in exchange for fiat currencies. However, since they have withdrawal and deposit limits, this approach is only ideal for small transactions. Another limitation of this method of cashing out cryptocurrencies is its relatively high transaction charges, which are usually between 7% and 12%. There are 14 Bitcoin ATMs in Africa at the moment located in South Africa, Kenya, Uganda, Ghana, Zimbabwe, Botswana and Djibouti. You can use the Coin ATM Radar to identify a Bitcoin ATM around you.
A bitcoin ATM allows you to buy and sell Bitcoin. Some ATMs also allow you to sell Bitcoin and withdraw cash.
Instead of using a cryptocurrency exchange, you can decide to sell Bitcoins directly to another individual. If you use this route, ensure that you get proof of ID as well as proof of payment before transferring the bitcoins to the buyer.
Bitcoin Debit Cards
There are various platforms that allow individuals within and outside Africa to sell their Bitcoins and get a prepaid debit card in return. You are able to use this debit card just like you would with the ordinary debit card. What’s interesting is that the card is usually powered by Mastercard or VISA. As Such, you are able to use it for various transactions both offline and online.
In today’s world, it is paramount for organizations to change with the times. Embracing technological advancements is a necessary strategy for businesses as well as nonprofit organizations. For NGOs, accepting cryptocurrency donations is one of the effective strategies that will increase their pool of resources. Indeed, donations made through virtual currencies such as Bitcoin are beneficial to both the donors and the organisations.
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