Intro: Is giving a donation in cryptocurrency a viable option? Ofcourse. It is one of the viable one. The Pennsylvania University is all set to donate a gift of $5million to Wharton, its business school.
The Pennsylvania University is all set to donate a gift of $5million to Wharton, its business school. The donation was not the largest one, but the university made it a fanfare it usually lavishes on and got many times its size.
This gift was given by an anonymous donor in the form of bitcoin. Hence, the announcement was a trial or a signal that cryptocurrencies can now be accepted as a donation unlike stocks, bonds, real estate and other investments.
Nonprofits debate on the crypto acceptance
John Zeller, Senior Vice President for development and alumni relations at Penn said a few years ago a lot of discussions has been done among nonprofits about cryptocurrency and whether it should be accepted.
The donor aims to make a gift of that magnitude, a profitable gift if you are interested. We are in the crypto world, and we accept it. But Zeller said that there were not many donations seen in crypto.
Crypto as an asset to donate is very complicated as the asset itself. Bitcoin, Ether and other cryptocurrencies have many qualities of publicly traded securities. For the recipient, the value is easy to know and for the donor to commit to a fixed amount.
For an international aid organisation, cryptocurrency donation is much easier as it simplifies the task of sending the money to a particular country, and blockchain technology can enable the organization to track how cryptocurrency can be used.
Contracts with currency operators
Zeller said that Penn has contracted with a digital currency transactions platform NYDIG. Shortly, it received a donation of $25,000 by an alumna in Ether. The donation was made towards the general scholarship fund.
However, the $5million donation was quite tedious. The donor wanted it to be large so that it could attract others also to donate and help the university to get similar donations. The donor donated it to find research and programs at the Stevens Center for Innovation in Finance at Wharton.
Is crypto gift a smart choice
Of course, the crypto gift could be a smart choice for both the parties- the donor and the receiver. Cryptos are like any appreciated asset, including securities and real estate, in terms of taxes. The assets that are donated to charity do not levy any capital gains, so the nonprofits effectively receive more money.
Secondly, blockchain technology has proved to be very effective in transferring, tracking and accounting for money sent internationally.