Archdiocese of Washington He said he was happy to receive cryptocurrency donations, even if parishioners could not physically put Bitcoin into the collection plate. It is believed to be the first Catholic diocese in America to announce this capability.
The archdiocese, which has 655,000 members in the District of Columbia and five counties in Maryland, said Tuesday it will use a donation services company to process gifts to various Catholic ministries, including the Parish Support Initiative that helps fund food pantries and hot meal programs. .
The archdiocese reported no cryptocurrency donations so far, stating that the option began on July 29. It also said that donations received will be immediately converted into cash and sent to the church.
Joseph Gillmer, executive director of development of the archdiocese, said via email that when the donation of cryptocurrency is in the same category as the gift of stocks or bonds, the potential for high dollar donations is greater.
“The number of gifts received may be less than the traditional way of giving, but the average amount per gift may be more,” he said.
“I see crypto giving as another way for donors to support charity,” Mr. Gillmer added. “This is part of our philosophy to make it easier for donors to fulfill their philanthropic goals flexibly.”
Since reaching a peak of $3 trillion in market value in November 2021, cryptocurrencies have plummeted, according to The Wall Street Journal and other outlets. The journal notes that in the second quarter of this year, the total market value has fallen to about $890 billion.
According to cryptocurrency exchange Gemini Trading Group, which tracks data across the industry, 20% of Americans in 2021 say they hold cryptocurrency, creating a large pool of potential donors.
“Even though Bitcoin is down more than 50% from its high, if you get people who invested in Bitcoin four years ago, they’re still up 10 times when they bought it,” said cryptocurrency expert David Sacco, a practitioner in residence at the University of New Haven’s Pompea College of Business. .
That appreciation — a $2,200 investment in 2018 is now at $22,000, he notes — could lead to huge capital gains if Bitcoin is converted to cash. Donate to charity, Mr. Sacco said, and you get a $22,000 tax deduction, even if you only used a fraction of the cash to acquire the property.
Still, he doesn’t expect a rush of cryptocurrency donations for charity.
“I think donating with cryptocurrency will become as popular as people using cryptocurrency to buy things,” said Mr. Sacco. “It’s out there, people use it to generate publicity, but I don’t think there’s any place where people buy textbooks with crypto or people donate money, [except] to create some buzz.”
But 18 months into the Western region of the USA Salvation Army, which is called online “CryptoKettle,” the evangelical organization has notched $121,502 in cryptocurrency donations, an official said.
“It’s a new way people can give,” said Lt. Col. Kyle Smith, communications secretary for the Salvation Army in Rancho Palos Verdes, California.
He added that the donations were occasional, similar to the gold coin giveaways in the group’s shopping center collection kettles seen during the winter holidays.
Cryptocurrencies like Bitcoin and Ethereum are encrypted streams of data monitored by members of a secure computer network called a blockchain, which serves as a ledger for transactions.
The Archdiocese of Washington and The Salvation Army chose Engiven, a San Diego cryptocurrency donation service company, to process the gifts.
CEO and co-founder James Lawrence said the company has various programs for organizations, with commission fees ranging from 3% to 4% per transaction and less for those who get an annual subscription or a “bespoke” plan.
He said the fee is similar to the credit card processing fees nonprofits pay when they pick up donations.
“Service fees are only part of the kind of how money is moved,” said Lawrence. “If someone donates $1,000 to one of our clients, and Engiven gets 3% of that, or $30, we see that as a very good value. The level of complexity involved in the exchange and maintaining compliance and security, that’s enough fair for the services offered.