Is your nonprofit ready to accept crypto donations?
It’s no secret that cryptocurrency is not only taking the world and apparently the Super Bowl by storm, it is redefining how we invest, buy, and now, how we give.
Crypto donations are the newest giving currency on the scene, and with the average crypto donation coming in at 15K, it’s safe to say that nonprofits should sit up and take notice.
To help our nonprofit community learn more about this phenomenon, ZGIVE asked trusted partner, James Lawrence, Co-Founder, and CEO of Engiven, a crypto donation platform for nonprofits, to share the Insider Scoop and the truth about cryptocurrency donations.
James, can you share your story and how the journey to Engiven ultimately began?
I have engaged in technology for most of my life. I started working with computers and writing code when I was nine years old.
Someone had donated a very early version of the personal computer to my elementary school. Unfortunately, none of the teachers knew how to operate it.
So a friend of mine and I decided to try and figure it out. My friend’s dad was a nuclear scientist, and he gave us how-to pamphlets on how to write basic code. So basically, that’s how it all started.
I was in my 20’s at the birth of the Internet, or the public Internet, as we now know it. Driven by the opportunity in the market and my fascination with the ability to move data at really high speeds, I started my first software company. We built one of the first high-performance in-memory data management systems used by the Department of Defense and Fortune 500 companies. The technology that we developed is now owned by McAfee, a division of Intel Corp. That was my first entrée into building a tech startup.
At that point in my life, I knew I would focus my career on technology, innovation, and doing good.
I knew that technology could be used for good or evil and that it could help people or exploit them. So my personal goal became to build technology solutions that would benefit and help improve people’s lives.
How did this lead to a desire to help nonprofits?
I was not raised in a religious home at all. When I was 15, I was invited to a youth group called Young Life, and I just had a blast. So I gave my life to Christ and decided to live differently. From that point forward, it became clear to me that my purpose in life was to serve God and help people. That can show up differently in people’s lives. For me, it was just finding my place at the intersection of vocation and faith.
I have so much admiration for people on the front lines, serving the significantly less fortunate. But what’s amazing is that I get to be a part of all those missions – and that’s what makes doing what we do at Engiven so gratifying.
When I see someone give a considerable amount of Bitcoin to a nonprofit, I know it will profoundly impact that organization and its cause. And at the end of the day, for me, that’s what it’s all about.
What would you say drives you every day?
Well, I’m passionate about making an immediate impact. I think that’s what gets me out of bed in the morning. I know some people have very long-term views on solving significant problems, but I tend to be right here, right now focused. So I ask myself each day, what can I do today to impact a person or an organization’s life? That is the motto that I have lived by for many years, and so far, it’s been a pretty good one.
What was the inspiration for starting Engiven?
The idea for Engiven started many, many years earlier with a company that our co-founder, Matt Hayes and I started, called Mogiv. Our mission at Mogiv was to help small-to-medium-sized charities move into the digital fundraising age.
We built the first text-to-give system where you could give any amount, and that quickly grew into a donor management application. That company was acquired in 2016. In addition to Mogiv, I had also been involved in blockchain and had started, let’s say, dabbling or trading in Bitcoin.
I bought my first bitcoins around 2013, and never imagined that crypto or Bitcoin, specifically, would grow and become a global asset and a worldwide phenomenon. Although my efforts were at Mogiv, the concept of crypto lived in the back of my mind. I had this idea that cryptocurrency assets could be something that would benefit nonprofits, but at that time, I wasn’t sure how.
By around 2017, we had moved past the first few years of Bitcoin’s popularity, and with the inception of more coins being created and entering the blockchain – the opportunity to help nonprofits became clear. I started talking to organizations about whether or not they would want to accept crypto. Essentially, that was the inspiration and genesis for the start of Engiven. We wanted to lead the next evolution of giving. We believed that cryptocurrency had some incredible, game-changing properties that many people and charities would eventually start to embrace.
What was the response from the nonprofit community?
The response has changed over the last few years, from when we first started. Initially, the general reaction was either, “What is crypto?” Or, “Yeah, I’ve heard of that – crypto is for buying guns and drugs.”
Other memorable responses were, “I could never get my board to sign off on this…” and “If we accept a Bitcoin donation; how do we know if it’s from a terrorist group?”
Suffice it to say, most charities we spoke to at that time had a very negative connotation about crypto.
Based on that kind of response, what made you want to start a crypto donation company?
Anyone in their right mind encountering these conversations would have run as fast as they could in the other direction. They wouldn’t have said, well, awesome! No one’s heard of it. No one wants it, so let’s go build a business around it! We moved forward because we felt a sincere responsibility to tell the world that crypto is not inherently bad. It’s just a tool, an asset, like anything, and that people can use it for good or for bad. We felt it was our job to help educate and empower people to use it for good.
We spent over a year just in analysis of the compliance and regulatory side of crypto, which at the time was still pretty murky. We investigated the tax side of crypto, banking, and more. We designed a platform, but it was almost two years before we began engaging customers. And during this time, the sentiment had changed a bit, and many organizations were starting to open up to the idea.
Soon the response we heard was, “We want to try this”, or even better, “I’ve got a donor that says they want to give us crypto. So, let’s do it!”
That’s when Engiven really started to grow. Although 2021 was a banner year, I’m not sure I can say it was the kind of year where the majority of charities woke up to the opportunity. I would say the early adopters certainly did, and I believe 2022 is potentially the year where we will see mass adoption of crypto philanthropy.
How is Engiven different from other crypto donation services?
The key differentiator between Engiven and the rest of the category is that we provide a true end-to-end solution. I believe it’s that type of solution that charities really need. Everything that we do is about either equipping, educating, or providing high-performance automation for our clients.
We take traditionally very complex ideas and reduce the complexity to a point where anyone can use them. Our mission at Engiven is really simple – to crypto-enable the nonprofit community.
What nonprofit is best served by Engiven?
We designed a system that provides value to charities of all sizes. As a result, our client community represents everything from very small regional charities to some of the most prominent charity organizations in the world.
As I mentioned earlier, we know that education and the equipping side of it are fundamental. We want to make sure that the charities and ministries we work with understand what they’re getting into and are able to talk intelligently about it. We help them understand the compliance, the flow of funds, tax-related documents, etc.
We don’t just receive crypto and convert it to cash, which is the easiest thing that we do. We offer the other things required to help an organization succeed with its crypto fundraising.
We spend a good deal of time pre-onboarding, which is helping all the different constituents within the organization get comfortable with what they’re about to do.
Then after onboarding, we help nonprofits develop the right kind of strategies to maximize fundraising efforts with their existing donors as well as potential new donors.
Can you share your favorite crypto donation story?
Well, probably the most memorable story from last year was about a gentleman who donated $10 million worth of Bitcoin to one of our clients – in one donation! And as far as we know, it’s the largest single Bitcoin donation ever made to a charity.
When we spoke with the donor, we found out that he was an engineer in his 70s who started mining Bitcoin on his laptop in 2010. He had just held it all this time and then decided he wanted to bless this particular charity. That is such a great story!
How do nonprofits find crypto donors?
Many crypto donors, primarily the major gift donors, are already engaged and donating money or property to those charities. Many are successful entrepreneur investors who saw an opportunity in crypto relatively early. These people now have a highly appreciated asset and they understand the tax benefit of donating this type of asset.
What is the landscape of nonprofits who sign up to accept crypto?
A third of our clients sign up because they have donors waiting to give. Another third is highly confident that they have donors that will come out of the woodwork and give if they accept crypto. Then there is that other third that is still questioning whether or not crypto is a legitimate way to fundraise and skeptical as to whether they’ll get any donations from it at all.
What advice or encouragement would you give to the 33% of nonprofits on the fence?
My main encouragement is to think of crypto as property,
which is how the IRS classifies it. Most organizations are willing to accept something physical, like a car, property, stocks, securities, and more. In many ways, crypto is very similar.
I highly encourage a charity to go with an expert and use a service that does this every day. Don’t try to do it yourself. Instead, select a crypto donation company that will partner with you, spend the time to educate you, and ensure that everything is being done correctly. There are some nonprofits that accepted crypto on their own. And for some of them, it worked out well. But I can tell you from conversations I’ve had with MANY organizations, that for others, it did not.
Where do you see crypto donations going into the future?
I believe crypto philanthropy is really in its infancy. The tax benefits are great for individuals who have appreciated crypto and this will help to grow the crypto donor demographic.
I think we’re really in the adoption stage, from the charity’s point of view. I compare it to when in 2008, very few charities accepted credit card-based donations. It took about six to eight years to get to the kind of saturation point where just about every charity accepted credit cards.
I believe we’re going to hit that with crypto in the next three to four years, which will open the door to significantly more giving. I also believe education, transparency, and improved legislation will have a positive impact on crypto adoption. This will help drive growth and position crypto as a critical asset for charities.
James as we wrap up, what last words of truth can you impart to our nonprofit community?
Wouldn’t you love to discover that someone in your donor base is able to make a significant crypto donation to your organization?
We have found that the majority of crypto donors to date were already involved with the organization donating dollars and/or property. Crypto was another way for them to give – and this time, enjoy the tax benefits of donating crypto.
You have nothing to lose and everything to gain by signing up to accept crypto at your nonprofit.
However, do your due diligence, pick a reputable company – one that will take the time to educate, empower, and partner with you throughout the process.
The truth about crypto donations is that it is here to stay and will continue to grow as the wider consumer audience continues to get on board. This will ultimately open the door to an abundance of crypto being donated to charities all over the world. So I leave you with one simple question, are you in or are you out?
Interview & Article by:
Tricia Roseveare – CMO/ZGIVE