How Charities Around the United States Are Benefitting From Bitcoin Donations
Hackers using bitcoin to extort ransom from an iconic American entertainment company ticked-off Ian Annase, founder of DonateBitcoin.
As a senior Computer Science major at Florida State University and a database and web intern at “The Children’s Campaign” in Tallahassee, Florida, he knew charities could benefit by accepting bitcoin donations. And yet the popular press seemed to cast the digital tender as the troll lurking under the bridge spanning the swelling river of cryptocurrencies. Moreover, financial services and accounting professionals without bitcoin experience sprinkled the internet with well meaning yet irrational warnings. The narrative amplified the fear, uncertainty and doubt charities harbored about them.
Annase believed that with the right technology and knowledge, charities could benefit from the dramatic growth in the value of bitcoin. The June 2017, Token Hackathon, co-sponsored by Fred Ehrsam, co-founder of the digital currency broker CoinBase, gave Annase the opportunity to put his beliefs to the test.
As Annase put it,
“I wanted to provide a positive example of the use of Bitcoin’s underlying blockchain technology. It is important that we continue to drive blockchain transactions to activities that make our world a better place and empower everyone to get involved for the greater good.”
Annase started the competition with an ambitious set of goals.
- Make it possible for any Bitcoin holder to donate the digital currency directly to any of the 1.5 million U.S 501(c)(3) charities with affirmative IRS determination.
- Eliminate a charity’s need for a bitcoin wallet.
- Avoid Bitcoin’s volatility.
- Disburse contributions to designated charities in USD.
- Eliminate the need for the charities to implement or manage technology.
- Comply with federal and state regulations governing charitable fundraising and solicitation.
OrgHunter and Make My Donation provide the infrastructure and processes for charity authentication, donation processing, and regulatory compliance. OrgHunter maintains and licenses access to a uniquely validated and updated database of all IRS tracked 501(c)(3) organizations. In addition, it develops and maintains the information technology infrastructure and processes upon which Make My Donation depends. Make My Donation, an IRS approved 501(c)(3) “donor advised fund”, manages compliance with regulatory bodies, processes donations, ensures that donors receive an IRS compliant tax deduction receipt, authenticates first-time recipient charities, mails checks, and provides reporting.
Relying on the OrgHunter/Make My Donation platform made it possible for Annase to focus on the critical, user engagement aspects of DonateBitcoin, and that he did.
Both donors and charities can use DonateBitcoin. Here’s how it works:
Donors start by searching for a charity on DonateBitcoin’s home page. Selecting a charity presents a form in which the donor specifies a contribution in dollars. The app converts and displays dollars in Bitcoin. Clicking the “Donate” button triggers the typical Stripe checkout process, through which the donor provides the necessary information required for the transaction. At this point, the donor has two options: a.) generate a QR code encapsulating the transaction, which when scanned with a smartphone, processes the donation through the donor’s Bitcoin wallet app; b.) select “Open Wallet” which connects the donor’s browser-linked bitcoin wallet to the checkout process.
In either case, Stripe serves as the transaction gateway, taking a scant 0.8% fee, and then sends the remaining 99.2% to Make My Donation, denominated in dollars. Thereafter, Make My Donation disburses grants using its standard processes.
Alternatively, with DonateBitcoin, charities can generate a snippet of HTML which when embedded in a website, displays the standard “Bitcoin Accepted Here” button. Pressing the button brings a donor to a web form pre-populated with charity information. All the donor has to do is specify the contribution amount and go through Stripe checkout.
DonateBitcoin spans the divide between cryptocurrency and philanthropy and will help position cryptocurrency in a positive light. Through its partnership with OrgHunter and Make My Donation, cryptocurrency holders can make immediate donations to any of the 1.5 million charities with IRS affirmative determination. Charities do not even have to deal with Bitcoin directly; they receive donations in US dollars.
Help us change how the world views cryptocurrency. To make your first bitcoin donation today, click here.
Featured on Charity Digital News UK