First Virtual Currency Charity Receives Tax-Exempt Status
Bitcoin
Bitcoin, www.bitcoin.com, was created on January 3, 2009, and is a software-based online payment system used to send payments between individuals. However, recently, some businesses have just begun to accept Bitcoin. Bitcoin is a decentralized currency via the internet which means the transaction does not take place through banks or clearing houses. By not needing to use a bank, transaction costs are much lower. In addition, no matter where an individual or business is located, they will be able to use Bitcoin. Another incentive for Bitcoin users is that there is no minimum amount of Bitcoin currency that must be purchased; users can have as few or as many Bitcoins as they want. The Bitcoins that are purchased by a user from companies like ANX, Expresscoin, and Safello are stored in their virtual wallet so they can use them to buy, sell, or send Bitcoin.
Where does the currency get its worth from?
When Bitcoin was originally created it was announced that the amount of Bitcoins in circulation would be capped at 21 million. Currently, the total amount of Bitcoin in circulation is 13.4 million. Although bitcoin has resistance levels, the value can fluctuate as it is traded like a currency on the markets. Chris Dixon, an investor and an ardent supporter of Bitcoin, believes that Bitcoin will receive its value “long term, if [it] gains widespread adoption, [he’d] expect the Bitcoin price to correlate to how useful people think sending payments, property, and contracts anywhere in the world instantly and reliably is.”
Trading chart of 1 Bitcoin to the United States Dollar since March 2014
With ever increasing technological advances, charitable organizations will continue to find new and creative ways in which to receive funds from donors. It is expected that the number of charities to accept virtual currency donations will increase significantly in the upcoming year.
The BitGive Foundation
“We’re basically establishing ourselves as a foundation that gives back to charitable causes on behalf of the Bitcoin community,” Connie Gallippi, BitGive founder and Executive Director, told Bloomberg BNA on August 25th. “We are doing that in Bitcoin as much as we can. The majority of our holdings are in Bitcoin, we operate mostly in Bitcoin; we generate donations from donors in Bitcoin and run our campaigns in Bitcoin.” The BitGive Foundation was founded in 2013, according to their annual report for the fiscal year ending June 30, 2014.
According to BitGive’s website, its mission is to leverage the power of the Bitcoin community to improve public health and the environment worldwide. Its goals are to establish a multi-million dollar investment fund to provide sustainable support to the BitGive organization and its mission as well as to make financial contributions to sound and effective organizations that are working to improve public health and the environment. To be selected as a grant recipient from BitGive, the organization must meet standards in the following categories: organizational effectiveness, financial stability, track record of success, legal compliance and cost-effective outcomes.
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The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.
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