Universities have received some of the largest cryptocurrency donations in the nonprofit sector; however, not many universities accept Bitcoin or other cryptocurrency donations yet. According to a Coinbase study, 56% of the top 50 universities now have at least one course on blockchain or cryptocurrency.
Many of these schools even have two or three courses on the topic, so you’d think that would mean most universities would put their money where their mouth is by accepting cryptocurrency donations or even accepting cryptocurrency to pay tuition.
We all know that cryptocurrency is most commonly used by millennials and Gen Z’ers. That means the universities have a unique opportunity to stay in touch with their recent graduates by talking about and accepting cryptocurrency donations.
Traditional nonprofits like Save the Children, No Kid Hungry, International Medical Corps, The Water Project and many more have benefited from being early movers in the world of crypto donations. We’ve seen hundreds of millions of dollars worth of crypto donated to nonprofits over the last few years with a large portion going towards universities.
What schools have gotten major crypto gifts?
- San Francisco State University: In April 2019, cryptocurrency company Ripple co-founder Brad Garlinghouse made a $25 million donation.
- Princeton University: There are two notable donations. They include the donation by class of ‘87 Alumni Mike Novogratz who donated an undisclosed “transformative amount” to the Bridge Year Program, while Princeton was also one of the 17 institutions to receive a share of $50 million from Ripple.
- Carnegie Mellon University: Late in 2019, CMU Class of 2014 Alumni Nikolai Mushiegian pledged to donate 3,200 MKR tokens valued at approximately $1.3 million, and committed to donate an additional 6,800 tokens currently valued at approximately $4.3 million.
- MIT: Has received an undisclosed donation by cryptocurrency exchange Bitmex. They also received a major donation by Ripple.
- Virginia Tech: $3 million in EOS donated to Virginia Tech donated by Alumni and co-founder of EOS Dan Larnimer in 2018.
- The following are also among the 17+ Universities who received a $50 million donation from Ripple: University of Pennsylvania (Wharton School), Indian Institute of Technology Bombay, Australian National University College of the Law, Delft University of Technology (Netherlands), Fundação Getulio Vargas (Brazil), International Institute of Information Technology, Hyderabad (IIIT-H), Korea University, University of Texas at Austin (McCombs School of Business), University of North Carolina at Chapel Hill, University College London, University of Luxembourg, University of Nicosia (Cyprus), University of Oregon & University of Waterloo (Canada).
So why would someone want to donate cryptocurrency instead of cash? The reason might surprise you: taxes. You’ll notice that many of these gifts above are millions of dollars. With cryptocurrency gifts, they are treated like property by the Internal Revenue Service.
That means the donor does not have to pay capital gains tax and can deduct the fair market value on their tax returns. For anyone who has made money on cryptocurrency, donating crypto directly to a 501c3 nonprofit is likely the most tax efficient way for them to donate. If they sold that crypto first, they’re often hit with 20% to 30% in taxes meaning their donation and deduction would be significantly smaller.
The other reason to donate cryptocurrency to a university would be to encourage them to take a closer look at the cryptocurrency industry. Although many may already have student run clubs or courses, not many are widely adopting cryptocurrency outside of those areas. More crypto donations means more institutions accepting and investing in cryptocurrency.
What about universities actually using cryptocurrency?
Although you won’t realize the tax benefits like you would for a donation, paying for tuition or using crypto on campus could be an innovative way for universities to cut down on costs and provide a more open financial system on campus.
Perhaps student ID cards could be loaded with stablecoins and accepted at the bookstore or cafeteria. Maybe the university could even use stablecoins for more efficient internal transfers and paying vendors. Realistically we’re far away from these types of use cases but we’re at a point where many schools are starting to think through how they incorporate crypto into their operations over the next five years.
Some schools are even taking things a step further and their endowments are starting to invest in crypto; however, those universities are keeping that information private. For now, most schools are just dipping their toes into the world of crypto by accepting crypto donations.
2020 will be the year you start to hear about a lot more schools accepting crypto going into the end of year fundraising season. In the next couple of years, most major universities will accept cryptocurrency donations. Some of this adoption may be sped up if we see a major bull market in 2021. Do your part to speed up institutional adoption and make a donation to a nonprofit.
Do you support an organization you’d like to see accepting cryptocurrency? Send them an email.
The views expressed here are those of the author’s and do not necessarily represent or reflect the views of BeInCrypto.
Written by Alex Wilson, a co-founder of The Giving Block, a charity-related startup that created a specific solution for accepting Bitcoin and other cryptocurrency donations. Alex’s background is in management consulting where he worked with Fortune 500 companies to develop strategies around emerging technologies like AI, IoT, blockchain and cryptocurrency.