Donors Use Bitcoin for Tax Benefits and to Keep Tabs on Spending
For Mr. Hines, a digital marketing strategist in Boston, the storms hit close to home: Several family members in Florida were affected by Hurricane Irma. As the devastation unfolded, he opened his computer and donated money to the Red Cross, but it was not in cash.
He gave in Bitcoin, which the Red Cross has been accepting since late 2014. He could have donated dollars, but, he said, the more he can use the cryptocurrency for buying goods and giving to charity, the more it will be used by others.
“I want to pitch in and help get the currency adopted,” he said. “And it’s also fun to use.”
It was his first donation with Bitcoin, the virtual currency that was created in 2008, but it will not be his last. As more charities accept digital currency, the more likely he will open his virtual wallet instead of his physical one, he said.
Few people are donating to the Red Cross with Bitcoin, with the group receiving just $2,000 worth of the currency in 2017, but the numbers are rising elsewhere. Fidelity Charitable, a $16 billion donor-advised fund, has received $13.5 million in Bitcoin donations this year, up from the $4.1 million it received from November 2015, when the fund started accepting the cryptocurrency, to December 2016.
Why would someone donate with Bitcoin over dollars? There are two reasons: It can be tax advantageous, and the technology the currency is built on could make it easier to see how a donation is being used, forcing charities to become more transparent.