Should my child's school's PTA accept cryptocurrency?
September 29, 2021 2:27 AM Subscribe
I'm in charge of fundraising at my child's school's PTA and we have been approached about accepting cryptocurrency. I'm not sure what to think, details inside.
The PTA is a 501c3 non-profit and can accept tax deductible donations including stock donations. I have a lot of biases associated with cryptocurrencies - in that my understanding is that they are not traceable and can be involved in illegal activity. Maybe I have an old script on what they are? We are in the US, specifically in California - and in a part of California where cryptocurrency is popularly used.
I see that Giving Block seems to be a popular tool for accepting cryptocurrency, and it appears legitimate charities use them. So my questions are:
Is Giving Block a legitimate platform? Have you used it before either from a donor or donee perspective? How was it?
Could accepting cryptocurrencies embroil our little PTA in some criminal enterprise?
Are there other pros/cons I'm not considering?
The PTA is a 501c3 non-profit and can accept tax deductible donations including stock donations. I have a lot of biases associated with cryptocurrencies - in that my understanding is that they are not traceable and can be involved in illegal activity. Maybe I have an old script on what they are? We are in the US, specifically in California - and in a part of California where cryptocurrency is popularly used.
I see that Giving Block seems to be a popular tool for accepting cryptocurrency, and it appears legitimate charities use them. So my questions are:
Is Giving Block a legitimate platform? Have you used it before either from a donor or donee perspective? How was it?
Could accepting cryptocurrencies embroil our little PTA in some criminal enterprise?
Are there other pros/cons I'm not considering?
Seconding the please please no.
posted by amtho at 2:49 AM on September 29, 2021 [16 favorites]
posted by amtho at 2:49 AM on September 29, 2021 [16 favorites]
Yes, please don't validate people whose response to the climate catastrophe is literally to burn as much energy as possible. Why should an organization responsible for children contribute to the diminishment of their future?
posted by dame at 3:18 AM on September 29, 2021 [41 favorites]
posted by dame at 3:18 AM on September 29, 2021 [41 favorites]
What would be the benefit to you of doing so?
Presumably you don't have any outgoings that can be paid in crypto, so you would have to sell it for cash ("fiat") as soon as you want to spend it, which will be an administrative burden you don't need (as well as a significant risk of theft, value fluctuations or other problems during that process). The "Giving Block" company handles selling the donations for cash and takes a cut, but you will then get entangled in a load of counterparty risk with them as well as getting drawn into political debate about whether crypto is good or bad; the future of money; cybercrime and so on.
Anyone looking to give you crypto can just sell it and give you cash instead. It's not your PTA's job to optimise their tax affairs.
posted by richb at 3:20 AM on September 29, 2021 [76 favorites]
Presumably you don't have any outgoings that can be paid in crypto, so you would have to sell it for cash ("fiat") as soon as you want to spend it, which will be an administrative burden you don't need (as well as a significant risk of theft, value fluctuations or other problems during that process). The "Giving Block" company handles selling the donations for cash and takes a cut, but you will then get entangled in a load of counterparty risk with them as well as getting drawn into political debate about whether crypto is good or bad; the future of money; cybercrime and so on.
Anyone looking to give you crypto can just sell it and give you cash instead. It's not your PTA's job to optimise their tax affairs.
posted by richb at 3:20 AM on September 29, 2021 [76 favorites]
Not clear to me why the person who wants to donate crypto can’t convert their own crypto to cash and donate the cash. Presumably they know more about converting crypto to cash than the small non profit. And if it’s a hassle or otherwise difficult for them to convert it, it is probably going to be more difficult for you. I would ask them if they can convert the crypto to cash because your organization does not have those resources - if they say no, find out why.
I would treat this like someone who wants to donate Deutschmarks or something - thanks, but is there a reason you can’t handle the conversion yourself versus putting that work on a nonprofit?
posted by Mid at 3:24 AM on September 29, 2021 [48 favorites]
I would treat this like someone who wants to donate Deutschmarks or something - thanks, but is there a reason you can’t handle the conversion yourself versus putting that work on a nonprofit?
posted by Mid at 3:24 AM on September 29, 2021 [48 favorites]
> Not clear to me why the person who wants to donate crypto can’t convert their own crypto to cash and donate the cash.
It's a tax optimisation; that way the donor avoids paying Capital Gains Tax on the crypto. See e.g. https://www.fidelitycharitable.org/articles/4-reasons-to-donate-stock-to-charity.html. I'm not certain on the details or if the receiving non profit then has any extra tax liabilities; the PTA should check with their accountant.
posted by richb at 3:43 AM on September 29, 2021 [13 favorites]
It's a tax optimisation; that way the donor avoids paying Capital Gains Tax on the crypto. See e.g. https://www.fidelitycharitable.org/articles/4-reasons-to-donate-stock-to-charity.html. I'm not certain on the details or if the receiving non profit then has any extra tax liabilities; the PTA should check with their accountant.
posted by richb at 3:43 AM on September 29, 2021 [13 favorites]
No the nonprofit does not have a tax liability. But the way you donate appreciated stock is the donor delivers the shares to a broker with a charitable donation unit. That broker sells the shares and delivers the cash to the charity.
If the block chain guys operate like this you'll actually get usd which seems fine.
posted by JPD at 3:53 AM on September 29, 2021 [2 favorites]
If the block chain guys operate like this you'll actually get usd which seems fine.
posted by JPD at 3:53 AM on September 29, 2021 [2 favorites]
JPD: thanks for the clarification. There are still the following downsides with using Giving Block:
1. Openly endorsing (or appearing to endorse) Crypto
2. Having "Giving Block" take a cut instead of the tax man taking a cut. I know that attitudes to tax are different in the US to the UK, but does a publicly funded school want to openly assist in tax optimisation in that way?
3. Any counterparty risks (will Giving Block deliver your money? On time?)
4. Administrative overhead
The upside is that (if donors actually use this route, and if they do donate more rather than just keeping the tax savings for themselves) your PTA may get more money.
(Sorry if this is threadsitting; I'll stop posting now)
posted by richb at 4:14 AM on September 29, 2021 [3 favorites]
1. Openly endorsing (or appearing to endorse) Crypto
2. Having "Giving Block" take a cut instead of the tax man taking a cut. I know that attitudes to tax are different in the US to the UK, but does a publicly funded school want to openly assist in tax optimisation in that way?
3. Any counterparty risks (will Giving Block deliver your money? On time?)
4. Administrative overhead
The upside is that (if donors actually use this route, and if they do donate more rather than just keeping the tax savings for themselves) your PTA may get more money.
(Sorry if this is threadsitting; I'll stop posting now)
posted by richb at 4:14 AM on September 29, 2021 [3 favorites]
Response by poster: Just to follow up on some of the questions:
So, we would not do this for one person, but set up through the Giving Block (or another similar firm), which is linked above, to accept donations from anyone. The Giving Block, from what I can tell, is a brokerage firm which accepts the currency and sells it and gives the non-profit the converted funds, much like how non-profits often accept stocks.
The reason why a donor would do this is they get a tax deduction and do not need to pay capital gains - which they would have to do if they sold the currency outright and gave the non-profit the USD funds.
Regarding why a non-profit would do this? It's another avenue to bring in donations.
I appreciate the clearly very strong response from some of the posters, but if I'm asked about this, I can't scream "NO!" and run out of the room. So I'd prefer answers that are either, "Here is a well-documented article that demonstrates why this is a good or bad idea" or "We considered this and chose to do x, because y" or "I have donated in this way and this was my experience" or "We did this as a non-profit, and this was the outcome."
posted by Toddles at 4:18 AM on September 29, 2021 [13 favorites]
So, we would not do this for one person, but set up through the Giving Block (or another similar firm), which is linked above, to accept donations from anyone. The Giving Block, from what I can tell, is a brokerage firm which accepts the currency and sells it and gives the non-profit the converted funds, much like how non-profits often accept stocks.
The reason why a donor would do this is they get a tax deduction and do not need to pay capital gains - which they would have to do if they sold the currency outright and gave the non-profit the USD funds.
Regarding why a non-profit would do this? It's another avenue to bring in donations.
I appreciate the clearly very strong response from some of the posters, but if I'm asked about this, I can't scream "NO!" and run out of the room. So I'd prefer answers that are either, "Here is a well-documented article that demonstrates why this is a good or bad idea" or "We considered this and chose to do x, because y" or "I have donated in this way and this was my experience" or "We did this as a non-profit, and this was the outcome."
posted by Toddles at 4:18 AM on September 29, 2021 [13 favorites]
Here is one article on the costs of cryptocurrency as seen through the lens of NFTs. Here is another one covering the same, plus more about why it is structurally questionable as a human. Finally, here is an article about why carbon offsets, many people's preferred mitigation, don't really work.
I don't think anyone here is suggesting you scream no and run out of the room. Rather, I think a reasonable response is: "We should not do something that undermines the future under the guise of supporting children." It's not as though the energy costs and general ponzi scheme nature of cypto is a secret.
posted by dame at 4:31 AM on September 29, 2021 [19 favorites]
I don't think anyone here is suggesting you scream no and run out of the room. Rather, I think a reasonable response is: "We should not do something that undermines the future under the guise of supporting children." It's not as though the energy costs and general ponzi scheme nature of cypto is a secret.
posted by dame at 4:31 AM on September 29, 2021 [19 favorites]
Would you accept donations of stock (assuming you would immediately liquidate the stock and then do whatever you normally do with cash donations)? Would you accept donations of, say tobacco stock? Or stock in a pornography company? Would you accept donations of fossil fuel companies’ stock? I don’t think accepting crypto donations would be any worse.
posted by mskyle at 4:38 AM on September 29, 2021 [5 favorites]
posted by mskyle at 4:38 AM on September 29, 2021 [5 favorites]
Accept the crypto if they also deliver appropriate carbon credits. That should make paying the appropriate CGT an attractive option. (Still an environmental disaster due to e-waste, if they took it up).
posted by pompomtom at 5:27 AM on September 29, 2021 [2 favorites]
posted by pompomtom at 5:27 AM on September 29, 2021 [2 favorites]
If this is really something that half the families in school want, then perhaps it makes sense for you to do the research and figure out how to manage the overhead and if it's worth the fees. But if it's just That One Parent, honestly I think it would make more sense for them to set up a donor-advised fund to deal with their own crypto --> tax-optimal giving flow. Then they can just send you boring old $$$ from there.
posted by february at 5:49 AM on September 29, 2021
posted by february at 5:49 AM on September 29, 2021
Aside from responses above, with which I agree, crypto fluctuates so wildly in value that just keeping track of how much funds you have, let alone predicting what you will have when you need it, is volatility that a PTA doesn't need. And that's only in keeping track of present values, actually trading it for fiat at the "right" time is also an issue. This is way more work and risk than a PTA should commit to.
posted by Dashy at 5:54 AM on September 29, 2021 [11 favorites]
posted by Dashy at 5:54 AM on September 29, 2021 [11 favorites]
Don't do it because Giving Block does not disclose their fees. At least, I couldn't find them. The best I could find was this third party site which says "Undisclosed, anecdotally includes set-up fees and transaction fees that may vary depending on your organization." How much of each donation will they skim? And a setup fee, seriously? (For comparison, credit card fees are usually 2-3%. Facebook and some other major organizations have true 0 fee ways to collection donations for 501c3s.)
Don't do it because cryptocurrencies are squirrely as all get-out. I don't know anything about this particular company but many, many crypto companies are fronts for money laundering or theft. Do you really want to sign their contract and have an ongoing business relationship with this company?
Don't do it because it's a waste of you and yourr organization's time. Really, how many extra donations do you expect to get with crypto currency?
The "can avoid paying capital gains" piece of the donation setup is true; I've done similar things with stocks. But seriously, how much money are we talking about here? I assume your PTA is not taking in millions of dollars. If this is so some parent can donate $100 and avoid $20 in taxes doing it, is that really worth your organization's time and hassle?
posted by Nelson at 6:48 AM on September 29, 2021 [10 favorites]
Don't do it because cryptocurrencies are squirrely as all get-out. I don't know anything about this particular company but many, many crypto companies are fronts for money laundering or theft. Do you really want to sign their contract and have an ongoing business relationship with this company?
Don't do it because it's a waste of you and yourr organization's time. Really, how many extra donations do you expect to get with crypto currency?
The "can avoid paying capital gains" piece of the donation setup is true; I've done similar things with stocks. But seriously, how much money are we talking about here? I assume your PTA is not taking in millions of dollars. If this is so some parent can donate $100 and avoid $20 in taxes doing it, is that really worth your organization's time and hassle?
posted by Nelson at 6:48 AM on September 29, 2021 [10 favorites]
"the way you donate appreciated stock is the donor delivers the shares to a broker with a charitable donation unit. That broker sells the shares and delivers the cash to the charity."
That's one approach, and one that's becoming more common: All large brokerages allow clients to set up a donor advised fund, to which they can transfer appreciated assets, including cryptocurrency.
You can also donate the asset directly to the organization. This makes sense if you have thousands of dollars in appreciated assets to donate to a large charity; I did that a few times before starting a donor advised fund. It does not make sense for a PTA.
So I agree: You take cash. If people want to do the work to get the tax benefits, mention to them that they can set up a donor advised fund and then have the fund send the PTA a check.
posted by Mr.Know-it-some at 6:56 AM on September 29, 2021 [5 favorites]
That's one approach, and one that's becoming more common: All large brokerages allow clients to set up a donor advised fund, to which they can transfer appreciated assets, including cryptocurrency.
You can also donate the asset directly to the organization. This makes sense if you have thousands of dollars in appreciated assets to donate to a large charity; I did that a few times before starting a donor advised fund. It does not make sense for a PTA.
So I agree: You take cash. If people want to do the work to get the tax benefits, mention to them that they can set up a donor advised fund and then have the fund send the PTA a check.
posted by Mr.Know-it-some at 6:56 AM on September 29, 2021 [5 favorites]
The benefits to your organization are quite clear: you are likely to receive a larger amount of money than requiring the donor to liquidate and withhold part to pay capital gains taxes. It is up to your organization whether not the perceived social costs of enabling tax avoidance and ever so slightly promoting the use of cryptocurrency or significant trade-offs to that benefit. Personally, I view both these social costs as ones that are best addressed through political action rather than personal avoidance. For example, if your organization received the full donation you could always send a check to the treasury for what you view as the tax avoidance, but I doubt that more than a tiny number of people or organizations do that. The cost of social signaling from charities accepting cryptocurrency is also extremely small in my view, given that cypto is largely driven by profit motives.
posted by a robot made out of meat at 7:07 AM on September 29, 2021
posted by a robot made out of meat at 7:07 AM on September 29, 2021
"Would you accept donations of stock?"
"it's a waste of you and your organization's time"
This is why I'd be hesitant, and I think you can explain this even more simply. Theoretically, you could accept a donation of a duffel bag filled with loose pennies. That's legal tender, and it might even end up being a lot of money, depending on the size of the bag. But also, it's a lot of work on your part to count the pennies, sort them into rolls, and then transport those rolls to your bank for deposit. Is that worth the effort? Maybe. I mean, if it's a huge bag and you'll end up with a few thousand dollars out of it, it's worth it. But consider: the donor is already lugging the bag of pennies to your office. Why wouldn't they just lug it to a bank instead and convert it into an easier-to-use format before bringing it to you? The answer is because they're lazy and they want to offload the burden to you. Crypto is the same. The donor could convert it before donating, but instead chooses to put the burden on an understaffed, all-volunteer nonprofit because he*'s lazy. That's why I'd say no, personally.
As far as getting tied up in illegal activity, though, I don't think you have anything to worry about. Cash is untraceable, too. Your donor could hand you a few $20s they just stole out of the register at a gas station, but that wouldn't tie you to that illegal act as long as you did your due diligence on the donor.
*Assuming it's a he, because I've never met a woman who has time for crypto BS.
posted by kevinbelt at 7:10 AM on September 29, 2021 [8 favorites]
"it's a waste of you and your organization's time"
This is why I'd be hesitant, and I think you can explain this even more simply. Theoretically, you could accept a donation of a duffel bag filled with loose pennies. That's legal tender, and it might even end up being a lot of money, depending on the size of the bag. But also, it's a lot of work on your part to count the pennies, sort them into rolls, and then transport those rolls to your bank for deposit. Is that worth the effort? Maybe. I mean, if it's a huge bag and you'll end up with a few thousand dollars out of it, it's worth it. But consider: the donor is already lugging the bag of pennies to your office. Why wouldn't they just lug it to a bank instead and convert it into an easier-to-use format before bringing it to you? The answer is because they're lazy and they want to offload the burden to you. Crypto is the same. The donor could convert it before donating, but instead chooses to put the burden on an understaffed, all-volunteer nonprofit because he*'s lazy. That's why I'd say no, personally.
As far as getting tied up in illegal activity, though, I don't think you have anything to worry about. Cash is untraceable, too. Your donor could hand you a few $20s they just stole out of the register at a gas station, but that wouldn't tie you to that illegal act as long as you did your due diligence on the donor.
*Assuming it's a he, because I've never met a woman who has time for crypto BS.
posted by kevinbelt at 7:10 AM on September 29, 2021 [8 favorites]
I think crypto is ridiculous and I find the ethics of donating appreciated stock problematic even thought I take advantage of it. That said if the you currently accept stock as a donation I don't think there is a logical argument for not accepting crypto donations - so long as you aren't taking basis risk on the donated assets.
posted by JPD at 7:33 AM on September 29, 2021
posted by JPD at 7:33 AM on September 29, 2021
Crypto currency is not mainstream. It is widely viewed as dodgy and associated with illegal activity. It is not comparable to stocks, which are a mainstream investment option. It has serious negative environmental impact. By including a crypto donation button, your PTA is endorsing crypto. That is not your PTA's job. It will be controversial and will make some parents angry. There's just no good reason to do this. The PTA's job is to stay away from controversy and do things for the kids and teachers. Full stop.
posted by Winnie the Proust at 7:34 AM on September 29, 2021 [2 favorites]
posted by Winnie the Proust at 7:34 AM on September 29, 2021 [2 favorites]
Hello, woman here. I've dabbled in crypto and would love to pay for more things in crypto but I'd also understand if you didn't want to take it.
posted by coldbabyshrimp at 7:52 AM on September 29, 2021 [4 favorites]
posted by coldbabyshrimp at 7:52 AM on September 29, 2021 [4 favorites]
No. just No.
posted by mermayd at 8:05 AM on September 29, 2021 [1 favorite]
posted by mermayd at 8:05 AM on September 29, 2021 [1 favorite]
Just take cash. It’s a PTA, your free labor as treasurer is worth something, and it’s not worth futzing with crypto bs. Also, there are thousands of coins out there, you’ll end up getting in pointless, exhausting conversations about why you take Bitcoin but not some other thing that was launched last week.
You are a PTA. Just take cash.
posted by rockindata at 8:08 AM on September 29, 2021 [3 favorites]
You are a PTA. Just take cash.
posted by rockindata at 8:08 AM on September 29, 2021 [3 favorites]
It is up to your organization whether not the perceived social costs of enabling tax avoidance and ever so slightly promoting the use of cryptocurrency or significant trade-offs to that benefit. Personally, I view both these social costs as ones that are best addressed through political action rather than personal avoidance. For example, if your organization received the full donation you could always send a check to the treasury for what you view as the tax avoidance
This all assumes that there is are no externalities (or lower that traditional wealth-transfer systems like SWIFT or visa or whatever) to processing the transaction itself. Perhaps I'm misapprehending "perceived social cost" vs actual damage to the world in which we live, which has been perceived by measurement. The 'perceived social cost' of "rolling coal", for example, is likely different between rural Texas and Amsterdam, but the environmental damage is identical.
posted by pompomtom at 8:23 AM on September 29, 2021
This all assumes that there is are no externalities (or lower that traditional wealth-transfer systems like SWIFT or visa or whatever) to processing the transaction itself. Perhaps I'm misapprehending "perceived social cost" vs actual damage to the world in which we live, which has been perceived by measurement. The 'perceived social cost' of "rolling coal", for example, is likely different between rural Texas and Amsterdam, but the environmental damage is identical.
posted by pompomtom at 8:23 AM on September 29, 2021
The PTA is a volunteer organization. It can operate at whatever level of complexity the volunteers are comfortable with. If there is someone willing to do whatever is necessary to make accepting the cryptocurrency as easy as cash for everyone else, fine. If not, not. And that means handling any resulting paperwork required for tax or accounting procedures.
posted by SemiSalt at 8:43 AM on September 29, 2021 [5 favorites]
posted by SemiSalt at 8:43 AM on September 29, 2021 [5 favorites]
The reason why a donor would do this is they get a tax deduction and do not need to pay capital gains
This doesn't sound like a good enough reason to me. Are there any other ways you're accepting donations that assist the donors, at tax-time? Do other charities work around their donors' tax situations? And why would a donor realize any capital gain with a donation? Seems sketchy, to me.
posted by Rash at 8:47 AM on September 29, 2021
This doesn't sound like a good enough reason to me. Are there any other ways you're accepting donations that assist the donors, at tax-time? Do other charities work around their donors' tax situations? And why would a donor realize any capital gain with a donation? Seems sketchy, to me.
posted by Rash at 8:47 AM on September 29, 2021
The tax deduction is real and legal. If I donate $1000 cash to a nonprofit I get a $1000 tax credit which saves me maybe $250-$500 on taxes depending on my bracket. If I donate $1000 in stock, I get the same credit and same tax savings. If I sell an asset worth $1000 that cost me $400 initially, I still get the same credits but I also have to pay taxes on $600 in capital gains, wiping out maybe half the benefit of the tax deduction.
That said, anyone who finds themselves in the situation very often can use a donor advised fund with one of the big mutual fund companies like Fidelity. You transfer the asset to the fund, get the tax advantage right away and direct the company where to make donations on your behalf. Zero cost to the recipient and also no cost to the giver. (The company makes money on the value of the funds before they get given). It would be a pain to set up for just one smallish gift but it makes sense for anyone who expects to make multiple donations of an appreciated asset. If you want to provide an alternative - this is it.
posted by metahawk at 8:56 AM on September 29, 2021 [3 favorites]
That said, anyone who finds themselves in the situation very often can use a donor advised fund with one of the big mutual fund companies like Fidelity. You transfer the asset to the fund, get the tax advantage right away and direct the company where to make donations on your behalf. Zero cost to the recipient and also no cost to the giver. (The company makes money on the value of the funds before they get given). It would be a pain to set up for just one smallish gift but it makes sense for anyone who expects to make multiple donations of an appreciated asset. If you want to provide an alternative - this is it.
posted by metahawk at 8:56 AM on September 29, 2021 [3 favorites]
No, because your time as volunteers isn’t free just because you are donating it. Crypto is a huge headache, somehow never quite pans out to be as much money as promised, and is setting your organization to be left holding the short end of the stick at some point. It’s a complicated pyramid scheme, at some unknowable point it’s likely to unravel. Do you want that to fall on the PTA’s shoulders? You can’t actually spend crypto, right? So why allow people to shift that liability to you?
posted by Bottlecap at 9:02 AM on September 29, 2021 [1 favorite]
posted by Bottlecap at 9:02 AM on September 29, 2021 [1 favorite]
I ran a non-profit for about a decade. Early in its life, we were given a few hundred bucks worth of Bitcoin. The value of that donation went up by over 100x, and down, and up again, over my tenure.
The decade of fighting about whether, how, and when to sell the Bitcoin in exchange for actual money, and the hassle we got from our bank over having anything to do with it, was not worth the tens of thousands we eventually got for it.
posted by automatronic at 9:55 AM on September 29, 2021 [1 favorite]
The decade of fighting about whether, how, and when to sell the Bitcoin in exchange for actual money, and the hassle we got from our bank over having anything to do with it, was not worth the tens of thousands we eventually got for it.
posted by automatronic at 9:55 AM on September 29, 2021 [1 favorite]
I am a professional fundraiser in the nonprofit sector and have worked for small, medium, and large organizations...and I am adding my voice to the "for what you're going to get in the way of donations from it, it is not worth your organization's time and effort to fuss around with crypto" chorus. Also, advertising that you accept donations in crypto may very well may be a big turn-off for other steady contributors.
The polite answer to your prospective donor is "Our gift acceptance policies do not include cryptocurrencies at this time. We do not have the capacity to process such donations without incurring prohibitive overhead costs."
posted by desuetude at 10:40 AM on September 29, 2021 [14 favorites]
The polite answer to your prospective donor is "Our gift acceptance policies do not include cryptocurrencies at this time. We do not have the capacity to process such donations without incurring prohibitive overhead costs."
posted by desuetude at 10:40 AM on September 29, 2021 [14 favorites]
If you want to make the environmental argument, here is a short New Yorker article you could share with the other PTA members. A highlight:
"According to the Cambridge Bitcoin Electricity Consumption Index, bitcoin-mining operations worldwide now use energy at the rate of nearly a hundred and twenty terawatt-hours per year. This is about the annual domestic electricity consumption of the entire nation of Sweden. According to the Web site Digiconomist, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month, and is responsible for roughly a million times more carbon emissions than a single Visa transaction."
I know that lots of things use energy and cause carbon emissions. But unlike, for instance, agriculture—which consumes a ton of energy and creates a ton of carbon emissions but at least gives us food—Bitcoin gives us nothing.
posted by Mender at 10:42 AM on September 29, 2021 [3 favorites]
"According to the Cambridge Bitcoin Electricity Consumption Index, bitcoin-mining operations worldwide now use energy at the rate of nearly a hundred and twenty terawatt-hours per year. This is about the annual domestic electricity consumption of the entire nation of Sweden. According to the Web site Digiconomist, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month, and is responsible for roughly a million times more carbon emissions than a single Visa transaction."
I know that lots of things use energy and cause carbon emissions. But unlike, for instance, agriculture—which consumes a ton of energy and creates a ton of carbon emissions but at least gives us food—Bitcoin gives us nothing.
posted by Mender at 10:42 AM on September 29, 2021 [3 favorites]
I feel like a lot of posters aren't understanding that the PTA won't actually handle crypto - they are using an intermediary that can accept various kinds of crypto so donors don't pay taxes on it and pay out the PTA in cash.
I'd bring up the reasons why crypto is bad with the board but I expect that the outcome with an average PTA board would still be setting up the Giving Block, assuming the treasurer was willing to take on the work of managing it. You can always stop accepting crypto donations in the future if it's a hassle or it's just that one donor who uses it or you think someone is funneling drug profits to your PTA. The main thing that could go wrong is the Giving Block folding before they pay out your donations, in which the worst case scenario is you're out those donations. Just don't keep a balance in crypto and a lot of the practical problems go away.
posted by momus_window at 10:49 AM on September 29, 2021 [1 favorite]
I'd bring up the reasons why crypto is bad with the board but I expect that the outcome with an average PTA board would still be setting up the Giving Block, assuming the treasurer was willing to take on the work of managing it. You can always stop accepting crypto donations in the future if it's a hassle or it's just that one donor who uses it or you think someone is funneling drug profits to your PTA. The main thing that could go wrong is the Giving Block folding before they pay out your donations, in which the worst case scenario is you're out those donations. Just don't keep a balance in crypto and a lot of the practical problems go away.
posted by momus_window at 10:49 AM on September 29, 2021 [1 favorite]
As someone who has served on PTA boards and another tiny "chapter of a larger organization" non-profit, I'd be concerned that that the amount of time spent setting up an additional donation processing service might not be a logical/responsible use of limited time and resources unless it's expected to significantly increase the total or frequency of donations received. In addition to the overhead of setting it up and just keeping an eye on the account, I'd want to be absolutely positive we're meeting the reporting requirements for both continued non-profit status and the charter with the parent organization, since this is a newer area without a lot of established guidance out there.
Do you have an informal way of asking other local PTA boards what their policy is on crypto? If it's an accepted thing in your area and your PTA is missing out on significant donations that other local units are receiving, that could make it worth the hassle - and then you could also compare best practices with other local groups. Does your state PTA toolkit have any guidance on this issue, or could you reach out to your local field office for advice?
Even if there is not guidance on crypto specifically, looking for pros and cons of using third party donation processing services could help. Perhaps your state PTA doesn't recommend it due to how much of a cut those services tend to take, or has specific requirements on how much of a processing fee is ok or how those funds need to be reported.
How long is the current treasurer potentially able to be the treasurer? Not sure if it's the same for you, but all PTA's in my state have two year term limits in any one position. If PTAs in your area generally are not crypto-comfortable, this might be something that's hard for the next treasurer to keep up on. I'd want to know what would happen to money left sitting in the account, in case a new treasurer missed a donation and it sat there for a bit. Would it lose value or incur fees at all?
The added complexity is enough for me to run screaming from the room if asked (kidding, mostly), but at the very least I would want these questions answered before endorsing it.
posted by Ann Telope at 12:01 PM on September 29, 2021 [2 favorites]
Do you have an informal way of asking other local PTA boards what their policy is on crypto? If it's an accepted thing in your area and your PTA is missing out on significant donations that other local units are receiving, that could make it worth the hassle - and then you could also compare best practices with other local groups. Does your state PTA toolkit have any guidance on this issue, or could you reach out to your local field office for advice?
Even if there is not guidance on crypto specifically, looking for pros and cons of using third party donation processing services could help. Perhaps your state PTA doesn't recommend it due to how much of a cut those services tend to take, or has specific requirements on how much of a processing fee is ok or how those funds need to be reported.
How long is the current treasurer potentially able to be the treasurer? Not sure if it's the same for you, but all PTA's in my state have two year term limits in any one position. If PTAs in your area generally are not crypto-comfortable, this might be something that's hard for the next treasurer to keep up on. I'd want to know what would happen to money left sitting in the account, in case a new treasurer missed a donation and it sat there for a bit. Would it lose value or incur fees at all?
The added complexity is enough for me to run screaming from the room if asked (kidding, mostly), but at the very least I would want these questions answered before endorsing it.
posted by Ann Telope at 12:01 PM on September 29, 2021 [2 favorites]
My impression is that most companies who accept Bitcoin donations get very few of them. That is what Greenpeace reported this year when they stopped accepting donations for ethical reasons. And last year Wikipedia's co-founder explained how their testing showed that adding a cryptocurrency donation option actually led to fewer donations (although to be fair a PTA is probably not receiving a lot of outside donations anyway).
As someone with experience on the board of a small non-profit community group, to me the biggest risk is that you all agree to set this up for a single donation, investing time and resources and possibly money into setting it up, and the option is never documented or advertised and in a short period of time with typical turnover it's forgotten about and the start-up cost is wasted.
posted by muddgirl at 12:58 PM on September 29, 2021 [4 favorites]
As someone with experience on the board of a small non-profit community group, to me the biggest risk is that you all agree to set this up for a single donation, investing time and resources and possibly money into setting it up, and the option is never documented or advertised and in a short period of time with typical turnover it's forgotten about and the start-up cost is wasted.
posted by muddgirl at 12:58 PM on September 29, 2021 [4 favorites]
I try to avoid giving money, either commercially or voluntarily, to anywhere that does business with crypto. I don't think I need to rehash the environmental reasons covered above. If my child's PTA started doing this I would be absolutely starting up a very loud and public boycott campaign and generating as much negative press as possible until they reversed their decision.
posted by Cheerwell Maker at 3:27 PM on September 29, 2021 [2 favorites]
posted by Cheerwell Maker at 3:27 PM on September 29, 2021 [2 favorites]
Disclaimer: no personal experience.
The Services page for Giving Block gives me a pretty serious vibe that they're, like, intending to market your org to the world of crypto donors;
So even though they seem legit, I bet at the very least you're going to get a bunch of emails trying to upsell you services and marketing to folks who won't have much interest in donating to you. Seems like kind of a pain in the ass, especially if the idea of accepting crypto came from either a casual, "Isn't this crypto currency thing what all the Millenials are doing these days?" or because there's That One Person who's pushing for it hard.
(And the fact that nobody knows what their fee schedule is seems . . . well . . . like it could come back and bite you in the ass.)
From this blog post on every.org - which admittedly seems to be a sort of competitor to The Giving Block, albeit a non-profit themselves;
Every.org does claim they convert ASAP;
"Once we receive notification of your donation from Coinbase, we will transfer the assets to our brokerage and sell them.
This means that the amount the nonprofit receives is reduced by the current blockchain transaction fee for transfer to our broker and the fees charged by our broker (currently 1%). Unless asked in advance for specific timing, we sell crypto within 1 business day. Even in a short period of time, value can fluctuate greatly. Every.org does not charge any fees of our own - instead, people who believe in our mission can donate to us directly."
posted by soundguy99 at 4:26 PM on September 29, 2021 [1 favorite]
The Services page for Giving Block gives me a pretty serious vibe that they're, like, intending to market your org to the world of crypto donors;
"Not only do we provide you with resources to integrate into your own marketing, we run our own campaigns to drive more crypto donors your way. This is one of the main reasons why so many charities we support switched to us from non-charity solutions."Which I think is one thing for the Red Cross or another worldwide organization, kind of another (probably pointless) thing for a local PTA.
So even though they seem legit, I bet at the very least you're going to get a bunch of emails trying to upsell you services and marketing to folks who won't have much interest in donating to you. Seems like kind of a pain in the ass, especially if the idea of accepting crypto came from either a casual, "Isn't this crypto currency thing what all the Millenials are doing these days?" or because there's That One Person who's pushing for it hard.
(And the fact that nobody knows what their fee schedule is seems . . . well . . . like it could come back and bite you in the ass.)
From this blog post on every.org - which admittedly seems to be a sort of competitor to The Giving Block, albeit a non-profit themselves;
1. Cryptocurrency is volatile.I think this is a very good point, regardless of how you eventually decide to accept crypto, if you do.
The value of currencies can dramatically go up-and-down. Early April 2021, the cryptocurrency market value hit $2 trillion and then losing almost $1 trillion by May.
It’ll be important to have a policy for cryptocurrency assets that covers whether to liquidate immediately or hold. And if you do hold, guidelines on when you would liquidate, which could be different depending on the coin and its perceived stability.
Every.org does claim they convert ASAP;
"Once we receive notification of your donation from Coinbase, we will transfer the assets to our brokerage and sell them.
This means that the amount the nonprofit receives is reduced by the current blockchain transaction fee for transfer to our broker and the fees charged by our broker (currently 1%). Unless asked in advance for specific timing, we sell crypto within 1 business day. Even in a short period of time, value can fluctuate greatly. Every.org does not charge any fees of our own - instead, people who believe in our mission can donate to us directly."
posted by soundguy99 at 4:26 PM on September 29, 2021 [1 favorite]
My impression is that most companies who accept Bitcoin donations get very few of them. That is what Greenpeace reported this year when they stopped accepting donations for ethical reasons.
I actually worked for Greenpeace when we started accepting Bitcoin and I can verify this. I would only start doing this if you get more requests, enough that it will make a big difference and defray the costs/labor of setting it up, or if there's a donor who wants to give a really wild amount of money but ONLY through bitcoin (I don't know what a wild amount of money is for your organization, but you probably do). You can give that as a reason: "Getting set up on bitcoin will take a big investment of time and effort, so we're going to wait until there's enough of a critical mass of donors that the ROI works out. But we'd love it if you'd be willing to convert your bitcoin and make a donation that way."
I honestly would not give ethical/moral reasons unless they are grounded in key pieces of your organization's mission and principles. It just opens you up to debate (and bitcoin enthusiasts do love to debate about bitcoin). But saying "it doesn't make sense from an ROI perspective right now" is just a statement of fact.
posted by lunasol at 4:26 PM on September 29, 2021 [8 favorites]
I actually worked for Greenpeace when we started accepting Bitcoin and I can verify this. I would only start doing this if you get more requests, enough that it will make a big difference and defray the costs/labor of setting it up, or if there's a donor who wants to give a really wild amount of money but ONLY through bitcoin (I don't know what a wild amount of money is for your organization, but you probably do). You can give that as a reason: "Getting set up on bitcoin will take a big investment of time and effort, so we're going to wait until there's enough of a critical mass of donors that the ROI works out. But we'd love it if you'd be willing to convert your bitcoin and make a donation that way."
I honestly would not give ethical/moral reasons unless they are grounded in key pieces of your organization's mission and principles. It just opens you up to debate (and bitcoin enthusiasts do love to debate about bitcoin). But saying "it doesn't make sense from an ROI perspective right now" is just a statement of fact.
posted by lunasol at 4:26 PM on September 29, 2021 [8 favorites]
Until and unless cryptocurrency is regulated in a way that means it isn't the main way dark web, ransomware, and other really unpleasant things are facilitated, I really don't want to do anything that makes it more normalized. If charities start accepting it, it becomes easier for people to donate it, and donations in that form might become larger. Then it becomes easier for charities to start thinking about just accepting it in its original form and keeping a balance in a cryptocurrency account.
Once that happens -- and it's a short trip, actually -- they will start looking at ways to spend that account, which leads to using it to buy things like whatever your charity buys: computers, tuition, even maybe eventually salaries. Catering and facility rental for events. Books, tutoring, whatever nice things PTAs buy.
Once that happens, every single vendor experiences increased pressure to accept this largely unregulated currency. Once that pressure causes them to accept it, a) that's a big expense for these vendors if every single transaction goes through some kind of vendor or clearinghouse, and it also adds even more to ALL the problems with the currency, and b) it makes life easier -- a LOT easier -- for the people who are fine with hijacking a hospital's or a water utility's computer systems in order to extract a ransom in order to finance some sort of extremism.
In short, you're basically helping people be really really awful to other people. Your PTA folks are coming together to make the world better, so why would you do anything that goes this far in the opposite direction?
I hope someone posts a link to a very good article explaining all the fantastic virtues of cryptocurrency and how it will make the world actually better, because I don't know about any of them.
posted by amtho at 6:18 PM on September 29, 2021 [7 favorites]
Once that happens -- and it's a short trip, actually -- they will start looking at ways to spend that account, which leads to using it to buy things like whatever your charity buys: computers, tuition, even maybe eventually salaries. Catering and facility rental for events. Books, tutoring, whatever nice things PTAs buy.
Once that happens, every single vendor experiences increased pressure to accept this largely unregulated currency. Once that pressure causes them to accept it, a) that's a big expense for these vendors if every single transaction goes through some kind of vendor or clearinghouse, and it also adds even more to ALL the problems with the currency, and b) it makes life easier -- a LOT easier -- for the people who are fine with hijacking a hospital's or a water utility's computer systems in order to extract a ransom in order to finance some sort of extremism.
In short, you're basically helping people be really really awful to other people. Your PTA folks are coming together to make the world better, so why would you do anything that goes this far in the opposite direction?
I hope someone posts a link to a very good article explaining all the fantastic virtues of cryptocurrency and how it will make the world actually better, because I don't know about any of them.
posted by amtho at 6:18 PM on September 29, 2021 [7 favorites]
What's the policy of your school district? I'd start there. In fact, you can say "Thank you for your generous offer! This is new for us so please check with [Central Office, PTA head of district, etc.]"
As a teacher and PTA leader, my advice is the same as many have said above: I would be to turn it down out of respect for your limited time and, quite frankly, potential liability to you personally and the PTA too. If someone else wants to deal with it, then fine, but this sounds like less of a potential gain and more of a Pandora's box. Good luck!
posted by smorgasbord at 8:22 PM on September 29, 2021
As a teacher and PTA leader, my advice is the same as many have said above: I would be to turn it down out of respect for your limited time and, quite frankly, potential liability to you personally and the PTA too. If someone else wants to deal with it, then fine, but this sounds like less of a potential gain and more of a Pandora's box. Good luck!
posted by smorgasbord at 8:22 PM on September 29, 2021
I think there's something to the crime angle as well. Bitcoin is used to fund a lot of crime, and your organization would prefer not to be associated with that.
posted by xammerboy at 9:19 PM on September 29, 2021
posted by xammerboy at 9:19 PM on September 29, 2021
Cash is used to fund lots of (probably most) crime. The largest dollar amount crimes happen within the banking system. These are not reasons to turn down the donation. Although average CO2 / bitcoin transaction is high (500+ kg), the CO2 used by the bitcoin network is primarily decided by its price (the mining rewards) not the number of transactions to process. The price of bitcoin itself is largely untethered from transactional use; it is mostly purchased as a speculative store of value. Holding bitcoin has a much greater effect on emissions than accepting bitcoin as payment. It is also entirely possible that your bitcoin-denominated transaction occurs off-blockchain and has direct emissions cost similar to a credit card; many people keep accounts with an institution which can just move around the numbers rather than true bitcoin wallets and blockchain transactions. Whatever the fees charged are, I bet they are less than the capital gains tax which would otherwise come out of the donation.
If the intermediary setup is too complex, I agree that's a fine reason to turn a one time offer down, and other posters are correct that this is unlikely to be a recurring issue. But, I really, really doubt that there are any actual human beings whose opinion of bitcoin will be changed by the behavior of your PTA allowing GivingBlock or equivalent donations. It is reasonable and simple to have a policy of immediately cashing in any crypto rather than holding it.
posted by a robot made out of meat at 6:26 AM on September 30, 2021
If the intermediary setup is too complex, I agree that's a fine reason to turn a one time offer down, and other posters are correct that this is unlikely to be a recurring issue. But, I really, really doubt that there are any actual human beings whose opinion of bitcoin will be changed by the behavior of your PTA allowing GivingBlock or equivalent donations. It is reasonable and simple to have a policy of immediately cashing in any crypto rather than holding it.
posted by a robot made out of meat at 6:26 AM on September 30, 2021
Not just crime; terrorism, fundamentalist coups, etc. It's a great way for people all over the world to manifest their hate -- of you, of your children, of your daughters, of your ability to just dance in public whenever you want. I'm serious about not *helping* them in any way.
posted by amtho at 12:15 PM on September 30, 2021
posted by amtho at 12:15 PM on September 30, 2021
Maybe you could reach out to some of the other charities that use Giving Block and get their experiences with the service and accepting crypto in general?
You could do the same for every.org, there's a search tool, for example here are small education non-profits that use the service. Here's their self-comparison to Giving Block.
I haven't used either service, but I would liken it to a service that handles the complexities of vehicle donations. Unless you like cars a lot, and want to handle the donation process -- or hate cars so much you don't want to accept them at all -- I'd not overthink and just choose one or the other, as long as you get good referrals from other non-profits.
posted by RobotVoodooPower at 6:54 PM on September 30, 2021
You could do the same for every.org, there's a search tool, for example here are small education non-profits that use the service. Here's their self-comparison to Giving Block.
I haven't used either service, but I would liken it to a service that handles the complexities of vehicle donations. Unless you like cars a lot, and want to handle the donation process -- or hate cars so much you don't want to accept them at all -- I'd not overthink and just choose one or the other, as long as you get good referrals from other non-profits.
posted by RobotVoodooPower at 6:54 PM on September 30, 2021
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Pros: I've never really come across any...
posted by johngoren at 2:30 AM on September 29, 2021 [29 favorites]