The ease of sending bitcoins, in any amount, all over the globe, has made it a popular medium for charitable and other causes. Hundreds of various campaigns have popped up, some employing other cryptocurrencies, for causes on the scale of $100 to $250,000.
With so many causes out there, it is understandable for prospective contributors for to scratch their heads. Even if a cause looks reasonable in theory, there can still be two strikes against it: uncertainty as to its authenticity, and its use of Bitcoin, which has a reputation amongst many as reserved for illegitimate use.
Earlier this week, we discussed how BitGive has started a new trend by getting approval as a nonprofit organization. Spearheading donations through bitcoins, it grants both its causes and Bitcoin a highly beneficial dose of credibility. The process isn’t quick or easy. BitGive enlisted the services of Perkins Coie, LLP to help with the process. But in the long run, separating yourself from the rest of the pack can pay huge dividends, especially if you’re one of the first to do it.
DC Magnates connected with Connie Gallippi, Executive Director of BitGive, to get a deeper look at how it works:
Are there special considerations for nonprofit organizations when dealing mostly or entirely in bitcoins?
Not yet, but we may see this down the road.
Since the IRS considers bitcoins property, what are the implications if a donation is received in BTC and then appreciates in value?
How to Prepare for CySEC’s New Tiered LeverageGo to article >>
It is handled similar to a stock where we must document the value upon receipt and then if we “sell” it, meaning it is exchanged for fiat, then we must document the gain in value; however, because we are tax exempt, we do not have to pay taxes on that appreciated value.
How much will BitPay’s infrastructure be leveraged for the various projects taking place?
Currently we are using BitPay for all of our transactions and as a special service they have our Bitcoins in cold storage. This is not a service they provide to other clients.
It appears that projects are currently focused on humanitarian activities. What are the envisioned future areas for expansion (e.g. Bitcoin advocacy)?
Our mission is public health and environment focused. Bitcoin advocacy is something we do, of course, as it goes hand in hand with our day to day operations, PR, leadership role, etc.; however it is not a central piece of our mission.
The role of LibraTax: will their expertise/software be leveraged for tax accounting purposes?
We are in talks with Libra Tax for a partnership that may offer direct donations to BitGive, this is not formalized at this time. We currently have a CPA doing our accounting; however, we may migrate over to Libra Tax. They are currently in public BETA.
How would an IRS audit work when dealing with bitcoins?
This is yet to be seen, but we are working with a CPA and will file our 990 as required. We will see how the IRS responds and make any adjustments as necessary.