When you donate to charity, do you have any idea how much of the money you donate actually supports your specified cause? While it’s nearly impossible to pinpoint an exact figure, there are several aspects of the bitcoin protocol that make it a much more favorable option as a channel for donating to charity than traditional currency.
As more and more charities seek to maximize their donations and eliminate processing and transaction fees, it’s no wonder that we’ve begun to see a variety of charities all over the world accepting donations in bitcoin. Over the past few months, charities and non-profits ranging from The Water Project to Wikipedia to Greenpeace have all begun to accept bitcoin. But on September 15th, the relationship between bitcoin and charity made international news with the announcement that one of the world’s largest charities, the United Way, began accepting bitcoin. Along with their announcement came a series of FAQ’s on their website that underscores the significance of the relationship between bitcoin and charity.
When asked “How will donations received via bitcoins be used?”, the United Way responded, “using bitcoin ensures that 100 percent of the funds donated go to United Way Worldwide’s Innovation Fund….Achieving our vision for the world – where all individuals and families achieve their human potential – requires innovation powered by new technology and outreach methods.”
Prior to accepting bitcoin, the United Way could only accept donations from people in certain countries. But now, since bitcoin is a global payment network, the United Way can accept donations from anyone in the world who has an internet connection and a bitcoin wallet.
Another key factor that led to the United Way accepting bitcoin is that it positions the organization to attract a previously untapped demographic of donors who may have been deterred from donating due to inconvenience. Now, with a sleek, straight ahead user interface, the United Way has established a system that allows people to donate in a mere two clicks.
Additionally, the minimal transaction fees and high divisibility of bitcoin allow it to realize a possibility previously unattainable in the world of traditional currency – microdonations. Since bitcoins can be divided into 100 million pieces, donors can seamlessly contribute any amount – from a dollar, to a cent, to even a fraction of a cent. With the advent of microdonations, the barrier to entry for donating to charity is significantly eliminated.
It’s been great to witness increasing amounts of charities realizing the potential of bitcoin. When extrapolated on a large scale, it will be interesting to follow the long-term results of the relationship between bitcoin and charity.