Crypto Catholics? The Archdiocese of Washington first accepted cryptocurrency donations

The Archdiocese of Washington says it is happy to accept cryptocurrency donations, even though parishioners cannot physically put Bitcoin in a collection plate. It is believed to be the first Catholic diocese in America to announce the possibility.

The archdiocese, which has 655,000 members in the District of Columbia and five Maryland counties, said Tuesday it will use a donation company to process the gifts for various Catholic ministries, including the Parish Support Initiative, which helps fund food pantries and hot meal programs .

The archdiocese reported no cryptocurrency donations so far, noting that the option was launched on July 29. It also said that any donations it receives will be converted into cash and sent to the church.

Joseph Gillmer, the archdiocese’s executive director of development, said via email that while cryptocurrency donations are in a similar category to gifts of stocks or bonds, the potential for high-dollar donations is greater.

“The number of gifts received may be small compared to traditional ways of giving, but the average amount of each gift is likely to be many multiples higher,” he said.

“I see crypto giving as yet another way for donors to support charitable causes,” Mr. Gillmer added. “It’s part of a philosophy of making it easier for donors to achieve their philanthropic goals by being as flexible as possible.”

Since peaking at $3 trillion in market capitalization in November 2021, cryptocurrencies have fallen, according to The Wall Street Journal and other outlets. The Journal noted that by the second quarter of this year, the total market capitalization had fallen to about $890 billion.

According to cryptocurrency exchange Gemini Trading Group, which tracks industry-wide data, in 2021 20% of Americans said they held cryptocurrency, creating a large pool of potential donors.

“Even though Bitcoin is down over 50% from its high, if you have people who invested in Bitcoin four years ago, they’re still up 10 times what they were when they bought it,” said cryptocurrency expert David Sacco, a practitioner in residence at the University of New Haven’s Pompeal College of Business.

That appreciation — a $2,200 investment in 2018 now stands at $22,000, he noted — could result in a hefty chunk of capital gains if the Bitcoin is converted to cash. Donate it to a charity, Mr. Sacco said, and you get the $22,000 tax credit, even if you used only a fraction of that in cash to acquire the asset.

Still, he doesn’t expect a rush of cryptocurrency donations to charities.

“I think donating with cryptocurrency will be about as popular as people using cryptocurrency to buy things,” Sacco said. “It’s out there, people are using it to generate publicity, but I don’t think it’s anywhere if it’s people buying textbooks with crypto or people donating money, [except] to create some buzz.”

But 18 months into what the Salvation Army’s Western US region calls its online “CryptoKettle,” the evangelical organization has netted $121,502 in cryptocurrency donations, an official said.

“It’s a new way for people to give,” said Lt. Col. Kyle Smith, Salvation Army communications secretary in Rancho Palos Verdes, California.

He added that such donations are sporadic, similar to periodic gifts of gold coins at the group’s mall collection pots seen around the holidays.

Cryptocurrencies, such as Bitcoin and Ethereum, are encrypted streams of data monitored by the members of a secure computer network called a blockchain, which acts as a ledger of transactions.

Both the Archdiocese of Washington and The Salvation Army chose Engiven, a San Diego, California-based cryptocurrency donation services company, to process gifts.

James Lawrence, the company’s co-founder and CEO, said the firm has varying programs for organizations, with commissions ranging from 3% to 4% per transaction and less for those who get an annual subscription or a “tailored” plan.

He said those fees were analogous to the credit card processing fees nonprofits pay when they take in donations.

“Service fees are just part of the nature of how money moves,” Mr. Lawrence said. “If someone donates $1,000 to one of our customers, and Engiven gets 3% of that, or $30, we see that as a very good value. The level of complexity involved in exchanging it and staying compliant and security, it’s a pretty decent deal for the service that’s being offered.”