As the cryptocurrency market continues to grow globally, we at the Ugandan Water Project (UWP) want to expand opportunities for its users to provide clean water to communities in Uganda. For this reason, UWP is collaborating with The Giving Block to accept cryptocurrency donations.
The rise of cryptocurrency donations is opening doors for non-profit organizations to raise more money for real world issues. With a mission to implement and advocate for safe and sustainably managed water, sanitation, and hygiene resources across Uganda in the hopes of ending the nation’s water crisis in the next decade, UWP is always seeking new and innovative ways to remove barriers that prevent prospective donors from financially partnering with us. Since our founding in 2008, UWP has made vast improvements in Ugandan communities by funding and installing more than 600 major water projects that have equipped over 230,000 people with clean water. Nevertheless, there is still abundant work to be done: more than 51% of people in Uganda lack access to safe water, a vital necessity for the flourishing of human life. This is particularly urgent in 2020 as Uganda’s limited healthcare and clean water access systems continue to exacerbate the growing impact of the COVID-19 pandemic in communities across the nation. Indeed, UWP has identified critical water, sanitation, and hygiene gaps for the 106 health clinics in Wakiso district alone, a region that is home to two million people.
One solution to raising enough funds for this daunting crisis lies within cryptocurrency, an emerging market that provides an easier, tax efficient way for users to donate to the cause. The IRS considers cryptocurrency donations a non-taxable event, meaning capital gains taxes are not owed on the appreciated amount. Additionally, the donation will also be deducted from the donor’s taxable income. According to the Global NGO Technology Report, cryptocurrency donations currently represent 1-5% of the used payment method for charitable donations, with a +100% growth in some countries. Research also shows that more than 13,300 BTC the equivalent amount of $200+ million in cryptocurrency have been donated to charities that have implemented this method of payment (Benefits of Accepting Crypto + Bitcoin Donations on GivingTuesday). Additionally, we believe non-profit organizations should embrace and pursue cryptocurrency donations because its transparency of exchange follows the values that we work towards everyday. We want to support the residents in Uganda to the best of our abilities and by offering donations through cryptocurrency, UWP is able to do just that.
Bitcoin, the first modern cryptocurrency, was first outlined by Satoshi Nakamoto in 2008 A Peer-to-Peer Electronic Cash System. Although the new financial medium was at first cryptocurrency was associated with crime and illicit activities on account of its allowance for user anonymity, these stigmas quickly diminished. Ten assets officially entered the cryptocurrency market in 2013 and Bitcoin reached then passed parity with the U.S. Dollar (A brief history on Bitcoin & Cryptocurrencies). Individuals began investing in this new form of currency and the world of cryptocurrency has not stopped growing since. Today, the total value of all cryptocurrencies is valued at $251.8 billion (Total Value of Cryptocurrency).
The following table showcases the type of cryptocurrency; its current price, supply, trade capabilities, activity and its overall market capitalization.
As an established and continuously growing market, cryptocurrencies represent an exciting and valuable new revenue stream for nonprofit organizations. Its most attractive benefits include:
- Strong security: it safeguards against fraud, account tampering and more confidential transactions which guarantees consumer privacy.
- Simplicity: these transactions are one-to-one affairs that occur on a networking structure, cutting out the middleman. This eliminates the use of a bank or credit union service.
- Cost effective: cross-border transactions can be conducted without complications because they are not imposed on fees by a specific country.
- Anonymity: when donating cryptocurrency all you require is a wallet and a recipient address. You will not need to provide any personal information.
- Tax efficient: donations are deemed as a non-taxable event.