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Churches Starting to See Cryptocurrency in the Collection Plate

As digital monetary systems go mainstream, ministries weigh pros and cons of accepting donations.
Churches Starting to See Cryptocurrency in the Collection Plate
Image: Chris McGrath/Getty Images

No one wanted to donate cryptocurrency.

James Lawrence, who founded Engiven to help nonprofits and especially churches process crypto donations, thought that surely some of the owners of Bitcoin, Litecoin, Dogecoin, Ethereum, Zcash, Tron, Polkadot, or the hundreds of other new and emerging cryptocurrencies would want to give a bit of it away.

But even as these decentralized, digital mediums of exchange grew more popular, 2019 and 2020 were like a desert for the startup.

By the beginning of 2021, Engiven had had a grand total of 40 customers.

“We built the platform. We figured out how to do it,” Lawrence said. “Then we’re like, ‘Someone’s going to come to the game, right?’ But there were very few.”

Then something changed in 2021. The percentage of Americans aged 18 to 49 who own Bitcoin, the most well-known cryptocurrency, rose to 13 percent, roughly the same as the percent who invest directly in the stock market. In April, Coinbase, the world’s largest cryptocurrency exchange, made its stock market debut, giving cryptocurrency increased legitimacy.

At the same time, the value of cryptocurrency started rising. One Bitcoin was worth about $8,000 at the start of 2020. The same coin was worth $32,000 at the start of 2021 and rose to a peak of $68,000 in November.

Investors who sell their cryptocurrencies are responsible for capital gains taxes but can reduce the amount they owe the government by making charitable donations.

The time for crypto donations finally came, and by the fall of 2021, Engiven had processed contributions for more than 700 nonprofits, including the Salvation Army, Compassion International, and Ronald McDonald House Charities. Engiven processed one $10 million Bitcoin donation and has seen several six-figure donations, Lawrence said.

About 400 of those recipients are churches—some quite large—but many small and medium congregations are now receiving crypto donations as well, Lawrence said. Church donations have become common enough that the Evangelical Council for Financial Accountability recently recorded a webinar about the potential ministry impact of cryptocurrency.

Fern Creek United Methodist Church in Louisville, Kentucky, has been accepting cryptocurrency for a while. Longtime member Tim Totten said he and several other members were involved in Bitcoin and realized there were considerable tax benefits to donating some of it. Several regular members decided they wanted to give to the church that way, and when Fern Creek set up the system, they started receiving donations from nonmembers too.

They have received “$5, $10, $20 donations—some a little bigger,” Totten said. “As far as we can tell, they want to be totally anonymous. They just drip across the website, and they think, ‘That’s something I want to support.’”

Justin Greene, the chief financial officer at Liberty Live Church in Hampton, Virginia, said his church originally didn’t know what to think about cryptocurrency. They weren’t sure why their church should accept it.

But as Greene researched cryptocurrencies, he came to believe they represented an entirely new donations stream for churches and Christian ministries. If a church doesn’t accept a credit card, a donor might write a check. But donors who can’t give through cryptocurrency may not donate through other methods.

“That’s a very good argument for accepting it,” said Greene, who also serves as the nonprofit tax and accounting adviser for Engiven. “There are a lot of people who are very generous out there, ready and willing to donate. … Let’s say a few years back you bought a lot of Bitcoin for very cheap, and now that Bitcoin is worth a tremendous amount, then there’s a big tax benefit to donating it.”

Liberty Live decided to prepare to receive cryptocurrency donations and received $20,000 in cryptocurrency in 2021.

One challenge for churches and nonprofits receiving cryptocurrency is that the value of the gift can fluctuate wildly. The price of Bitcoin in particular has been notoriously volatile. Bitcoin dropped by 30 percent in a single day earlier this year before regaining 18 points. Another cryptocurrency, Ethereum, dropped 40 percent in less than 24 hours. A gift worth $20,000 would have been worth $12,000 the next day.

Liberty Live solves this problem by immediately liquidating cryptocurrency donations, turning them into the more traditional—and stable—American dollars. Greene recommends that to other churches as well.

Nils Smith, coauthor of Crypto for Good: Demystifying Cryptocurrencies for Nonprofits, says some churches may want to leave some cryptocurrency in their account, though, to watch it and see how the whole process works. Understanding cryptocurrency takes away a lot of the mystery and fear, he said.

But he agrees churches and nonprofits shouldn’t, as a rule, hang on to cryptocurrencies.

“Your job is not to be an investor. Your job is to use the donation,” said Smith, who also works as a strategist at Dunham+Company, a nonprofit fundraising agency. “Just like when people donate stock. You don’t want to be sitting on Tesla’s stock. You want to liquidate it because they gave it to you to be used for ministry purposes. The same is true with cryptocurrency.”

The other common concern that Smith hears from churches and ministries is the perception of cryptocurrencies’ involvement with criminal activity. Since the currency is not controlled by governments or federally regulated banks, criminals and terrorists can use it to move money internationally and launder funds. According to one industry report, criminal cryptocurrency transactions amounted to about $10 billion in 2020.

There’s no reason to think criminals benefit from giving their cryptocurrency to churches, though.

For Christians, the bigger concern may be about potential scams. Some churches, particularly those associated with the “prosperity gospel” movement, have become targets. In the last few years, for example, two Samoan churches got caught up in a scam involving the cryptocurrency OneCoin.

Churches that don’t get involved in investing—especially when the promises of returns are too good to be true—will not have a problem, though. Accepting donations doesn’t put anyone at risk, Smith said.

The biggest issue for churches and small nonprofits may just be deciding whether the potential donations are worth the cost and hassle of figuring out how to deal with cryptocurrency. Most churches were slow to accept credit cards, for example, and online giving platforms weren’t seen as essential until the pandemic.

“Most churches are probably not going to receive a crypto donation for another year to two years,” Smith said. “But what we’ve encouraged nonprofits we work with at Dunham+Company to do is, don’t wait until somebody comes to you with a crypto donation to be ready to accept it.”

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