Nonprofit hospitals weigh risks of accepting donations in cryptocurrency
Nonprofit hospitals weigh risks of accepting donations in cryptocurrency
Nonprofit hospitals are charities that often solicit donations for patient care or research. Donors give stocks, real estate, cash and — increasingly — cryptocurrency.
But cryptocurrency sometimes comes with risks. That raises a quandary for hospital fundraisers: Should they accept digital money like bitcoin?
Sara Jolly, the executive director of development at the Nicklaus Children’s Hospital Foundation in Miami, faced that decision recently when she got a request from a donor, who told her: “’I really want to make a gift with crypto,’” Jolly said.
At the end of September, the foundation announced it could accept cryptocurrency. “We certainly want to meet all of our donors where they are,” she said.
In Massachusetts, the Cape Cod Healthcare Foundation also decided to take bitcoin this year.
“The chances of us getting that donation at that time without us accepting bitcoin was close to zero,” said Chris Lawson, the foundation’s senior vice president and chief development officer.
Cape Cod Healthcare chose what’s called an e-commerce wallet service to process the donation. While that was being set up, bitcoin’s value dropped.
“We were sort of sitting on pins and needles,” Lawson said.
Then the value went up again. The gift amounted to about 3% of the foundation’s fundraising total for 2021, he said.
The roller-coaster volatility of cryptocurrency means charities need to hire advisers if they decide to accept it, said Rick Cohen, the chief communications officer and chief operating officer at the National Council of Nonprofits. That way, he said, they can get help with questions like “Do we sell today? Do we wait two weeks?”
Hospitals, though, may be accepting risk to their reputations by taking bitcoin.
“Some people worry about the environmental cost of bitcoin,” said William Luther, who researches cryptocurrencies. He’s an economics professor at Florida Atlantic University and director of the Sound Money Project at the American Institute for Economic Research.
Cryptocurrency transactions eat up a lot of power. There may also be questions about who is using cryptocurrency to make a donation, he said.
“That it’s potentially used by criminals and tax cheats, and so a hospital accepting bitcoin is subject to criticism,” Luther said. That’s because bitcoin donors can be anonymous, though Luther pointed out that e-commerce processing platforms have to trace donors’ identities to comply with federal law.
So far, Luther said, cryptocurrency accounts for only a small fraction of charitable giving.
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