A week ago I didn’t know a lot about Bitcoin.
But I wanted to learn more about Bitcoin and how this new currency could be relevant to nonprofits. Fortunately, I didn’t have to look far. A friend of mine, David J. Neff, an Austin-based author and consultant, had co-authored with Jason Shim, Digital Disruptor: How Bitcoin is driving innovation in entertainment, media and communications.
In reading the report and speaking with David by phone, nonprofits should definitely have Bitcoin on their radar.
“Bitcoin is a digital peer-to-peer currency,” explained David. (To understand it more clearly you should watch this video.)
A key phrase in David’s definition is “peer-to-peer.” Most of us are familiar with peer-to-peer fundraising: when people ask their family, friends, colleagues to support a cause. Peer-to-peer is all about community and trust, and this is as true for digital currencies (or cryptocurrency) as it is for fundraising.
“There’s a real community around Bitcoin,” said David. “Just like in social media when there is a community of people that know and trust one another.”
Bitcoin is peer-to-peer in how the currency is exchanged (from one person to another without a bank or institution) and why it is gaining momentum worldwide. Like peer-to-peer fundraising it has a vibrant life of its own outside of any institution.
“Because there are no banks or middlemen involved, Bitcoin has no fees, which should be attractive to all organizations, especially nonprofits,” said David. “It’s like me handing you cash.”
David can point to several charities that are using Bitcoin. Canada’s Pathways to Education accepts Bitcoin. Minnesota-based nonprofit Spare Key has taken the extra step of hiring a Director of Cryptocurrency Development to focus on donors who want to use Bitcoin or other digital currencies.
“In order to get money from that community, you need to have someone who understand this community and how to raise money from them,” said David.
Users of digital currencies like Bitcoin are looking for organizations that accept it.
“It’s an innovation issue for nonprofits,” said David. “First it was fax machines and people said, ‘That’s crazy!’ Then it was color computer screens. But slowly we adopted new technologies and realized the benefit of them.”
“Nonprofits should always be innovating. That’s why nonprofits should be exploring this new fundraising option,” said David. “The best thing is that Bitcoin advocates already have a vibrant, engaged community that is looking for organizations to support.”
Just this past spring, Dogecoin, a spinoff on Bitcoin, celebrated 138 days of charity and community.
The Dogecoin Foundation raised $30,000 for the Doge4Kids program, which aimed to send service dogs to families and kids in need, and another $30,000 worth of dogecoin was donated to help the Jamaican bobsled team reach the winter Olympics. Eric Nakagawa (co-founder of I Can Has Cheeseburger) started his own charity Doge4Water, which raised 40 million dogecoin that’ll be used to build clean water projects in Kenya, and the community even decided to sponsor a NASCAR driver to get him to Talladega next week.
For David, the decision for nonprofits to jump on the Bitcoin bandwagon is an easy one. It’s secure, free to exchange, anonymous (if you prefer), transparent and stable. Most importantly, it has a dedicated community bent on burnishing Bitcoin’s reputation as the “People’s Currency.”