Bitcoin charity Sean’s Outpost is appealing for funds after running into financial problems following the recent decrease in the price of bitcoin.
In a Facebook post, the Florida-based charity, which relies on bitcoin donations to provide meals and shelter to the homeless, said: “The recent price drop in BTC has played havoc with our finances and we are down to the bone right now.”
The charity reached out to the community on Thursday, following several weeks of weak bitcoin prices.
Over the past month, the price of bitcoin has gone down from $485 to $362 at press time. Last week, the CoinDesk Bitcoin Price Index briefly dipped to $295, the lowest point since early November 2013.
Restricted budget
In its Facebook announcement, Sean’s Outpost said it has used its funding to distribute over 120,000 meals to the needy so far. The organisation currently provides 2,000 meals per week and caters to more than 400 homeless in the city of Pensacola.
“We are the largest provider of meals to the homeless in Escambia County, Florida, by a wide margin. And we feed rain or shine,” the charity said.
Jason King, founder of Sean’s Outpost, told CoinDesk that the bulk of the money is spent on food and running its Satoshi Forest facility:
“It costs around $11,000 a month to run Sean’s Outpost. That’s the cost of 8,000+ meals a month plus mortgage and utilities on Satoshi Forest.”
King added that the non-profit operates on a very tight budget, substantially smaller than similar charities operating in the area.
Victim to volatility
According to King, Sean’s Outpost was never able to meet its expenses purely through donations, meaning the founders often had to pitch in to make ends meet. With the bitcoin price so low, this gap has widened.
Operating under such a tight budget leaves the charity at the mercy of the rises and falls of the bitcoin price, leaving it unable to hold bitcoin until a better return can be achieved.
King said:
“Price effects us because we have to sell no matter what. We have an obligation to feed all the people we feed every day, regardless of the price. So when the price of bitcoin falls sharply, in the short term, it effects our runway in terms of ‘weeks-worth of meals’ we have liquidity to provide.”
Furthermore, the charity had hoped to establish an endowment this year in an effort to minimize cash flow issues. However, recent downward price pressure has derailed those plans, forcing the organisation take a “hand to mouth” approach for the time being.
Relying on bitcoin
Since its inception, Sean’s Outpost has raised over 470 BTC from 1,925 donations, which equates to more than $171,000 at current bitcoin prices.
However, the actual dollar value of bitcoin donations made to the charity is somewhat lower. Some donations were made when the price was significantly above today’s (with a historical peak at around $1,100 per coin in December 2013), but King says the majority were made when bitcoin was trading south of $100. The charity’s current bitcoin balance is 1.56 BTC.
Last May, Sean’s Outpost’s nine-acre Satoshi Forest facility was severely flooded and the bitcoin community quickly rallied to help repair the damage.
Despite the current appeal for additional funding, King said Sean’s Outpost is committed to feeding the homeless no matter what happens to the bitcoin price.
Charity image via Shutterstock