The Church’s Crypto Future, As Told by Engiven’s CEO
May 15, 2023 |
The Church has always thrived at the forefront of innovation. Perhaps now more than ever, progressive leaders are recognizing and embracing the value added to their churches through cutting-edge digital solutions, and they’re passionate about adopting the latest tech trends for elevating their ministries.
Cryptocurrencies—decentralized monetary assets that can circumvent traditional intermediaries, and are increasingly popular with younger generations—are part of that progression. This new-age financial solution will inevitably be a driver for church generosity moving forward.
This unique opportunity to facilitate a fresh channel of faith-based giving was the driving force behind Pushpay’s new partnership with Engiven. Their donation platform allows nonprofits, churches, and ministries to accept and exchange crypto and stock donations securely.
Engiven CEO James Lawrence is, as you’d expect, hugely enthusiastic about crypto’s potential for churches. Read on to discover why he’s so confident about crypto’s ability to fuel ministry, how he describes these benefits to church leaders, and his recommendations for facilitating crypto donation in any church.
Q: When you think about the future of donations and generosity for the Church, or nonprofit organizations, what do you envision and how does Engiven help support that vision?
JL: We live in a culture that is now dominated by all things digital. While many aspects of generosity are still very relational, the process of giving and the transfer of assets is rapidly changing to an electronic methodology. Nonprofits need to prioritize and embrace digital giving at every level. It’s not enough to have a credit card/ACH giving solution any longer. A large percentage of givers are now very tech savvy and have become accustomed to using online money tools such as their favorite banking app, Venmo, Paypal, Cash App, and of course online giving platforms such as Pushpay.
With the emergence of cryptocurrency, the giving process is not only 100% digital, but it also has what I would call “wonderful complexities.” Engiven was founded to come alongside churches and nonprofits to educate and enable them to reduce these giving complexities so that they can harness a new asset class to the benefit of their mission. Our giving software makes the giving experience excellent for the giver and provides a high level of security and transparency for the nonprofit.
Q: What are some of the misconceptions (or fears) about cryptocurrency today and what does the Church need to know as they consider offering crypto as a donation option?
JL: A few years back, many nonprofits were resistant to accepting crypto, namely Bitcoin, because there were some negative media pieces about the Dark Web and how Bitcoin had been used to fund nefarious transactions outside the purview of the US government. While some of these stories were true, most of the information about crypto at that time was one-sided and opaque. In reality, there is a lot of clarity about crypto as an asset in the US.
First, the IRS has classified crypto as property. This classification means that individuals who have owned crypto for more than 12 months can donate the asset and receive favorable capital gains treatment on their tax returns, in the same way they might receive a tax deduction for an appreciated stock gift. Second, while there is an ongoing dialog within the SEC about crypto, the most popular cryptos are not considered to be securities, and therefore can be transferred or donated without any compliance related issues.
From my perspective, the local church has been one of the main beneficiaries of crypto giving in the past two years. Engiven has a heart for the local church and we’ve focused our efforts to equip the church to accept crypto donations and to be a leader in the space. Churches need to know that accepting crypto has nothing but upside. The process is now very well honed, extremely safe, and highly automated. Engiven has spent years fine-tuning our security and staying ahead of crypto compliance and regulatory issues. The result is that churches can safely benefit from crypto gifts with the same level of confidence they expect from credit card donations.
Q: Are there any risks for Churches to offer cryptocurrency as an option for their community?
JL: The risks are relatively minimal. With Engiven, we exchange the crypto for US dollars at the time of donation. As a result, the ministry does not have any material market or custody risk. Engiven’s automated solution provides an end-to-end methodology that ensures a rapid blockchain verification and exchange process for every donation.
In terms of community, every ministry has crypto owners. Those who own crypto will appreciate the fact that the ministry they care about meets them where they’re at in terms of generosity and giving options.
Q: What are the main benefits for churches?
JL: New asset classes are rare, and crypto has shown to become an important new way for churches to generate income. The benefits are quite similar to accepting stocks or major gifts of other asset types. In the past five years our average crypto donation has been $15,000 and we’ve even processed a $10 million crypto gift for a ministry. So the main benefit of crypto is that it provides an additional area of funding to grow God’s Kingdom. Ministries won’t know who has crypto assets for them until they’re ready to accept them.
Q: From a donor standpoint, what are the benefits of donating/gifting cryptocurrency to your Church?
JL: Donors who own crypto for at least 12 months can donate their appreciated crypto to a nonprofit and receive a tax deduction for the full amount donated. This tax benefit enables the donor to donate a greater amount and receive a greater tax deduction. It’s a win-win for the donor and for the ministry who receives the gift. Also, by accepting crypto, a church enables the giver to give in the way they feel called. Some crypto owners are passionate about using crypto for good.
Q: What are the major tax implications to consider?
JL: Other than the previously mentioned tax benefits to the giver, the IRS requires all crypto donations over $5,000 to obtain a qualified appraisal. The Engiven Foundation will provide a free appraisal to all donors who make these contributions (to a Pushpay customer). We always encourage individuals to consult their tax professional about their donations, but the IRS has made the rules pertaining to crypto donations very clear.
Q: How would churches go about receiving, or cashing in, cryptocurrency donations?
JL: While there are several ways a church could accept crypto donations, I recommend using a third party service that specializes in crypto. While crypto is generally safe, there are import processes that need to be followed when sending, accepting or custodying crypto. Using a platform like Engiven/Pushpay enables the ministry to focus on their mission and not to get distracted with the giving process. I also recommend always exchanging their crypto donations for cash immediately, which is the Engiven/Pushpay process. My recommendation is to give it a try, communicate the opportunity to their congregations and see what God does!
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