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In times of economic uncertainty, nonprofit leaders might feel a sense of déjà vu, reminiscent of past financial crises. Global markets rattled, trade tensions, and increased volatility can lead to donor hesitation and program uncertainty.
However, history has shown that nonprofits are resilient, especially when leaders adapt and open new giving channels. Notably, crypto philanthropy proved to be a lifeline for many organizations during the COVID-19 pandemic.
In a recent blog post, Patrick Duffy, co-founder of The Giving Block, has four key recommendations for nonprofit leaders to keep in mind about engaging with donors during times of market volatility and uncertainty:
1. Economic Stress Doesn’t Kill Giving, It Shifts Patterns
Past recessions have demonstrated that overall giving tends to dip, but not as drastically as one might expect. Instead of disappearing, giving patterns shift. Major donors often lean in, while smaller donors may pull back.
There is a similar trend right now with digital currency. Traditional assets might be down, but many crypto portfolios still hold long-term gains. Many crypto investors are still seeing high double-digit or even low triple-digit gains, depending on their situation, according to Duffy.
Don’t assume your donors are out of the game. Instead, recognize that they are likely to be more thoughtful and impact-driven. Crypto donors are known for being values-driven and eager to see the tangible impact of their contributions.
2. Crypto Is Still “Extra Money” For Many Donors
Despite recent market dips, many long-term crypto holders have significant gains in their portfolios. These donors might be looking for smart ways to offset those gains, and donating cryptocurrency can be a tax-efficient strategy. Historical data even suggests that crypto giving can spike during market downturns, as donors seek to allocate assets that aren’t tied up in traditional, potentially shaky investments, according to Duffy.
Remind your donors that they can donate cryptocurrency directly. For some, it may be the smartest asset to donate in a volatile market. Make sure this messaging is included in your communications.
3. Nonprofits That Thrive Know Their Audience
Larger institutions often fared better than smaller nonprofits during previous recessions. A key differentiator was a clear mission and nimble revenue strategies. Crypto giving represents a new, and still underutilized, strategy across the nonprofit sector.
If you haven’t done so already, now is the time to educate your major donors about the benefits of crypto giving. The messaging can be similar to that used for other appreciated assets, with a focus on the tax advantages and the ease of donating with just a few clicks, Duffy suggested.
4. Preparation, Not Panic
Most nonprofits cannot afford to retreat when donors are seeking meaning and purpose. In times of uncertainty, a clear mission becomes even more critical. Crypto donors, especially high-net-worth, younger individuals, are often driven by values and impact. They might not be as connected to traditional philanthropic communication channels.
Lean into storytelling and highlight the impact of crypto-friendly giving. Show donors why your mission is crucial and worthy of protection. Make a direct appeal by explicitly stating that you accept crypto donations and provide clear instructions on how to give.
