Fidelity Charitable became the latest major US charity to accept bitcoin this November when it added the digital currency as an eligible asset for its donor-advised accounts.
With the move, Fidelity Charitable joins an expanding list of nonprofits that have opted to accept bitcoin donations, including American Red Cross, Greenpeace USA, Save the Children and United Way, among others. Like these organizations, Fidelity reports that customer acceptance and interest in the idea were the motivating factors behind the move.
In interview, Fidelity Charitable senior vice president Matt Nash affirmed that the organization has a vested interest in listening to its customers and making its offerings as “broad” as possible.
Nash told CoinDesk:
“What we’re finding is that for more Americans, as more people use and invest in digital currencies, they’ll tap those resources to do good. We had had some inquiries from some advisors and we looked into it.”
Nash was unable to provide statistics on how many users had so far taken advantage of the offering, but did state that last year’s decision by the US Internal Revenue Service (IRS) to classify bitcoin as property proved pivotal to the move.
“We take in a lot of appreciated assets from securities in private companies to things like real estate, and we felt like, with the IRS evaluating it as property, it is now similar to other assets taking in,” he continued.
Fidelity Investments helped consult on the decision, according to Nash, providing compliance and legal services so that its charity arm could move forward with the offering.
However, Nash was unable to comment on the larger strategy of the financial giant, which has to date only moved to sponsor digital currency conferences and industry events.
Initiating giving
To donate bitcoin, Nash said investors must call to set up an account. Bitcoin funds are then sent to Fidelity Charitable via bitcoin services firm Coinbase, where they are converted into fiat currency and deposited into the customer’s account.
When asked how the process was different from simply donating cash, Nash responded that the organization users a similar donation process for stock, in which the asset is sold and proceeds are deposited in accounts.
“From a donor’s perspective, they’re donating bitcoin,” Nash said. “The charity won’t hold bitcoin. Many charities don’t have the capability to handle assets other than cash.”
Donors must also go through checks, at which point assets are vetted to ensure they haven’t been used for money laundering, according to Nash. However, he said, despite the propensity for cybercriminals to use bitcoins, he said no additional checks are provided for these assets.
As for how the offering could evolve as bitcoin becomes even more widely used, Nash said the offering could be “scaled up” to include automation, concluding:
“Our mission is all about making giving simple.”
Giving image via Shutterstock