Everything you need to know to make crypto a part of your congregation
Make crypto apart a leader, it’s sometimes — okay, maybe more times than we care to count — scary to try reinventing the wheel. congregation tithes in cash or check and sometimes by credit or debit card — and sometimes not at all, especially if your flock is experiencing giving fatigue. [COULD POTENTIALLY LINK TO MOST RECENT POST ON GIVING FATIGUE] So, how in the world can you not only integrate cryptocurrency as a giving method but also convince your congregation to get on board? Well, the days of passing the offering plate might be coming to a proverbial end.
Here’s everything you need to know about cryptocurrency and how you can make it a part of your church.
Make crypto a part is Cryptocurrency?
Many decentralized networks use cryptocurrency as a tool for transactions. Also known as crypto, this payment method circulates without a central authority. Instead, these coins use other techniques for security. Cryptocurrency allows people to purchase a product or service, or simply hold the “coins” in a digital wallet (more on these below). It allows them to grow profit, in essence, becoming an investment.
The downside and upside to crypto is its volatility. Arguably crypto’s most popular coin, Bitcoin, has one of the most volatile price points. At the close of business on December 31, 2011, Bitcoin was a mere $4.25 per coin. Just ten years later, it blew past analyst expectations to an all-time high of more than $68,000. On January 18, 2021, the coin had fallen to just over $42,000. That’s quite the spread in such a short amount of time, but it’s also why this coin is so popular.
Make crypto a part is a Cryptocurrency Wallet?
Your everyday wallet holds your cash and credit cards — a crypto “wallet” is a digital version of this that houses your stored cryptocurrencies. This digital wallet is a must, as it’s the only place you can store, send, and receive your virtual currency. This wallet helps keep track of and prove that you own your respective coins, and it also generates public addresses that you’ll need to complete transactions. Rather than physically holding your crypto, your digital wallet acts as an intermediary granting you access to your coins.
Your physical wallet — the one you carry in your pocket — also holds your driver’s license and possibly other documents that, if lost, can give away your identity and financials, among other things. On the other hand, while anyone can freely view your digital crypto wallet (because the blockchain is transparent and decentralized), it isn’t connected to your identity. Each coin is identified by a private key, a long sequence of numbers and letters unique to you and your wallet. These act as both your wallet’s password and your digital signature for transaction verification.
A crypto wallet
Now, while no one else can access your private keys, ensuring the privacy of your keys is your responsibility. It’s like the pin number for your debit card; if someone has your pin number and they’re able to get your card, they’ve got access to your funds.
It’s a little different with a crypto wallet.
If someone gains access to your private keys, they can access your cryptocurrency. But, unlike your physical wallet, without those keys, no one has access — not even you. This is why keeping your private keys safe yet accessible is so important. Without them, you lose access to your digital wallet and all the cryptocurrency that’s in it.
There are a variety of digital wallets available that can help you keep track of your digital holdings. So, what types of wallets are there, and how do they work?
What Types of Digital Cryptocurrency Wallets Exist?
Digital cryptocurrency wallets are as varied as the currencies they can hold, and each type has its own pros and cons and unique attributes. Additionally, each kind of crypto wallet falls into one of three specific categories — hot, cold, or warm — referring to the wallet’s degree of connection with the internet. Whether a crypto wallet is connected to the web can affect how it functions and its level of security.
Make crypto a part of a hot wallet?
Digital wallets that live on the internet and can only be accessed via a connected device are considered hot. The most significant advantage of having a hot crypto wallet is the ease of use. Since they’re already online, it’s super easy and convenient to buy, sell, or transfer cryptocurrency, allowing you to handle transactions with an internet connection no matter where you are.
The main disadvantage of a hot wallet is its security. There is always a new virus, malware, or other threat facing the online world. Hence, most cryptocurrency holders prefer having smaller amounts in a hot wallet for fast transactions but maintaining the bulk of their coins in a cold wallet. Because cryptocurrency purchases and sales above a certain amount must be reported to the Internal Revenue Service (IRS), cryptocurrency platforms hosting hot wallets require that users provide identification.
The most typical hot wallet types include:
Make crypto a part a cold wallet?
It’s just the opposite of a hot wallet; cold wallets aren’t connected to the internet at all. In fact, a cold wallet is a physical piece of hardware that can look like a hard drive or a USB stick. A cold wallet comes with its own software download that helps users set up the wallet and view their portfolio with no internet connection.
A cold wallet is like a safe in a bank; it’s not necessarily the most straightforward wallet to access, but that also means it’s secure. Any transactions to or from a cold wallet have additional steps, such as plugging the USB into your laptop when you need to transfer coins.
While it’s not necessarily the most convenient transaction method, a cold wallet is much more secure against cyber threats. Since your private keys aren’t online, they’re not as vulnerable to theft.
Some cryptocurrency holders even make a “cold wallet” out of a piece of paper. While you first have to generate your private key(s) online, you can make a piece of paper a cold wallet by simply printing off your keys or writing them down and then storing the paper somewhere safe. A paper wallet such as this isn’t apt to cybersecurity issues of any kind, but you must be wary of other potential threats, such as theft, or losing or misplacing the piece of paper.
Warm wallets are in the middle
A “warm” wallet is a mix of both hot and cold. A warm wallet can be a software download or something like a USB stick, but it typically has a PIN or passcode that must be entered upon access. Warm wallets require no personal ID and can function just like a hot wallet in the sense that you use it online, but after you connect, you can also disconnect, thereby safeguarding your digital assets. These hold promise, but because they’re still a relatively new item in the crypto world, it may take some time to see if they’ll play the role of a “happy medium”.
However, of all these wallet types, the warm wallet might be best for a church setting, as transactions can occur onsite or offsite, and you can store the wallet in any safe location you choose.
What Makes Cryptocurrency Popular?
People in your congregation may invest in a cryptocurrency for several reasons, such as:
- Some people view crypto coins, like Bitcoin, as the future of currency. As people witness its skyrocket to fame, they may purchase more now before the coin sees another spike in profits.
- Some people no longer like the idea of banks holding all the power over money. Banks have a hand in reducing money’s value over time through inflation.
- In the same vein, crypto users like the blockchain system. The blockchain offers more security than traditional payments, and it’s decentralized.
- Other users simply like that this currency can increase in value. Other than that, this set of users has no interest in whether the currency will ever reach or exceed cash acceptance.
Before adding cryptocurrency to your church’s methods of giving, consider posting a poll on your website or social media accounts to gauge interest in the ability to tithe with crypto coins.
Cryptocurrency and the Church
Over the past few years, churches have increasingly turned to innovative outreach methods for member attraction and retention. In doing so, these congregations create online communities for people to worship and connect. And with these innovations comes the need for new donation solutions. Cryptocurrency is one way your church can move into today’s more sophisticated contribution options.
Before you get too excited, alternative currencies are still pretty volatile. But it’s this very nature that’s caused many of the earliest coin buyers to make millions. The Securities and Exchange Commission (SEC) and Internal Revenue Service (IRS) are busy crafting regulations and taxation legislation for crypto, but this could point toward the potential for cryptocurrency contributions to be granted tax-deductible status. This is great news for churches with a crypto wallet ready to accept donations.
Being able to accept cryptocurrency donations is obviously a benefit, but it might even offer your church the ability to boost giving from members you might not have reached otherwise. For instance, crypto still has a bit of a liquidity issue. Overall, most crypto holders are just that — holders. And for most people, that’s about as much as they care to do with their crypto — simply hold it awaiting one of two things:
- For their investment to see enough of a return that they sell the coins back at a profit, or
- For cryptocurrency to become more widely accepted so that it can be used to purchase products or services at places they currently shop.
Some items with crypto
As it stands, you can already purchase some items with crypto, but it isn’t widespread enough for a majority of people to consider replacing their cash.
But this is where it gets interesting; as more churches and other organizations start accepting crypto, this offers another outlet for current coin holders to show their generosity. One of the IRS’s regulations stipulates that the capital gains tax applies to cryptoearnings, but contributions to charitable organizations — and yes, churches — offset the liability while helping out a cause the coin holder holds dear to their heart.
Some of your congregation might not like giving because they don’t feel comfortable having their name in the spotlight. While those who may donate using crypto could potentially find the tax benefits most attractive, it’s also likely that others will find this the perfect option to donate anonymously.
Many churches see a rise in contributions if they offer multiple ways for people to donate. The more options available, the more donations you’ll see. Adding cryptocurrency to your list of options is just one more way you can do this. DonorWERX makes it easy, offering another way your flock can give and simplifying the entire process for your church. Many major nonprofits are doing so, and now you can provide this giving option to your congregation.
Crypto and Your Congregation: Another Perspective
It’s almost hard to believe that cryptocurrency has only been around for a little over a decade. What began as just a fad for edgy “nerds” has become one of the biggest forces in the financial world. This is due to the blockchain, which could prove to be one of the world’s greatest inventions. In fact, blockchain tech helps address today’s concerns with financial policies:
- It seeks to protect the world’s most vulnerable, offering property rights that cannot be taken away or stolen, and
- It seeks to minimize the impact of inflation on individuals and communities and offer access to a financial system that most individuals wouldn’t receive in the traditional banking system.
Does that mean everything with crypto is perfect? That bad actor won’t try to find a way to manipulate the system in their favor? No, but this can’t be promised in the world of business or on the internet in general.
Godly missions and good investments occur every day, even though bad people may be lurking in the shadows. So, if you’re worried that God may not smile on your congregation if you utilize cryptocurrency for giving, think again.
Think of it like this: you’re on a public bus heading to a Hillsong United concert. The concert is fun, and you even meet new people. Later that night, you learn two things:
- Another passenger on that bus you were on was a wanted fugitive, now captured.
- Someone you met at the concert was called to Jesus because of your words of encouragement.
Fugitive used the same technology
Now, both you and that fugitive used the same technology — the bus — to get where you were going. Does that mean that you should never ride a bus again?
Sinful natures are expressed with tools, such as the internet, but the source of the sin is deep within the person committing the act. Tools can facilitate evil as well as create holiness. As a Christian, do not fear technology; be hopeful and thankful that it exists as a tool to do God’s work.
Historically, we’ve seen this very type of technological advance used for good. Remember the printing press? If not for that innovation (spurred by the networks created by a financial world), a public forum that allowed free debate of Martin Luther’s theologies might never have come to pass. People may have thought his beliefs were nothing more than wrong opinions coming from a pseudo-academic.
It was Martin Luther himself who recognized an opportunity and obtained the necessary access to the new “technology”. Many said offering information to the general public at such a scale would cause irreparable issues. Still, Martin Luther knew that this technology could be used for good to spread the Gospels. We know the story.
Of course, problems and chaos did occur, but so did the incredible movement that purified and advanced God’s works.
The Future of Church: How Crypto Can Also Amplify God’s Work
Right now, the church is on the precipice of what could be a very similar history-making moment; the evolution of the world of blockchain. As cryptocurrency matures, it could offer strong financial systems that require no permissions, meaning Christians in oppressive countries could use it with no risk of repercussion.
Some opponents of cryptocurrencies consider them a hotbed of speculation, but what about the church member who owns the stock? What about the power of the dollar heading south while inflation only rises?
Like anything new, there will be growing pains.
Crypto is but a baby in the world of finance, which means it’s only natural for there to be greater volatility and acute speculation, both of which bring more significant potential opportunities.
This doesn’t mean you should throw caution to the wind by any means. But if it’s acceptable to put money into stocks (at a proposed risk of losing said funds) in an attempt to grow that money over time, then it’s necessary to reevaluate why other opportunities are so often dismissed because the risk is new.
Blockchain offers additional means of wise, careful investments that reward a little bit of patience. And to be a part of this new financial system, it’s not necessary to become greedy. Christians should apply the same wisdom in this endeavor as they do in any other part of life.
The Coming of Crypto Was Inevitable
However, possibly the most crucial reason you and your congregation shouldn’t be afraid of crypto has become evident over the past decade; cryptocurrencies are here to stay. Take a look at any news story about current financial markets, and it becomes clear. Crypto isn’t just not going away; it will most likely play increasing roles in the future.
Christians have been faced with to sin or not to sin debates since the beginning of time. And that choice remains today; to be able to partake of new technology while not getting caught up in its dangers. Blockchain as a means of transferring currency is just the beginning.
We’ve already started to see entirely decentralized associations that have tokenized resources. For instance, the emergence of non-fungible tokens (NFTs) could open the door for Christian artists. Churches can see the benefits of proper stewardship, which means that eventually, they’ll need to have crypto as a part of their plan financially.
Blockchain also cuts down on costly money transfer rates and bank and other processing fees, which always take a cut of nearly every financial transaction. Crypto will allow resources to move more efficiently where they’re needed, even in countries where ministry resources are currently suppressed. Think about it: have you ever heard a story of a missionary who doesn’t need funds? Of course not. What if that missionary was in a country that didn’t support Christianity, and to get financial assistance them could mean risking their very life?
Though it’s over a decade old, cryptocurrency is still in its infancy, meaning now’s the time to act — carefully — and explore the myriad possibilities that cryptocurrency could mean for your congregation.
Everything you need Should You Know Before You Dive into Crypto
Here are a few questions shepherds ask when contemplating cryptocurrency:
Everything you need happens if a church member donates crypto to our congregation.
When you accept crypto donations, they are considered non-cash donations, like a gift of property rather than cash. If you were ever to receive a crypto donation, it’s wise to appoint someone beforehand who knows something about the space and how these transactions work. Should you not have a church member skilled in this currency, check with your local bank, accounting organization, or lawyer’s office. Of course, acknowledge and thank the donor, but understand that documenting the value of the crypto donation is the donor’s responsibility.
Our church needs to give a receipt to the donor.
For tax purposes (for the donor), your church must sign their Form 8323. This acknowledges to the IRS that the donor has provided you with a non-cash donation and the amount. This form only needs to be filled out and signed if the value of the donation exceeds $500. Your signature on this form doesn’t necessarily admit agreement to the value, but instead stands as proof that the donor did, in fact, make a non-cash donation to your church.
A congregant has donated bitcoin to our church. Can we sell the bitcoin so we can have the cash for our church?
Absolutely. In fact, this is probably the smartest thing you could do if your church doesn’t have an experienced financial person on staff. If you do exchange the coin for cash, you’ll need to complete Form 8282, noting that you’ve sold cryptocurrency in exchange for traditional currency if you make the exchange less than three years from the date it was originally gifted to your church. You must file this form with the IRS within 125 days from the date you exchange the crypto for dollars. A person with crypto experience can help you discern the best time to turn the bitcoin into cash.
I’m going to exchange our church’s crypto donations for dollars. Where do I do this?
Cryptocurrency exchanges or transfers occur online, and there are several sites or platforms on which you can perform the exchange. Depending on where you’re located, there may even be a Bitcoin ATM in your area, and you can also look into a Bitcoin debit card. Be wary of the fees associated with the option you choose. Again, it is beneficial if someone in your church is experienced with cryptocurrencies.
Can I, or my church members, buy crypto using a credit card?
It’s always helpful to have some materials available for your members who may not be as tech-savvy as others. Once you announce that you’re accepting cryptocurrencies as donations, you’ll likely have several questions, one of which may be whether buying crypto is possible with a credit or debit card.
Can you? Yes. But it does depend on the card issuer and exchange platform you choose. Some platforms won’t allow transactions made with a credit card at all, while others will honor certain card issuers or card purchases from certain countries.
The main issue with purchasing crypto with a credit card isn’t whether it’s doable but rather how quickly the fees can add up. There are typically fees associated with purchasing crypto by itself, such as transaction fees and commission fees. Then you add on a credit card fee. For instance, you could end up paying over $1,100 for a $1,000 investment.
And that’s if the card issuer allows cryptocurrency purchases.
If your issuer allows it, prepare for hefty cash advance fees. That’s right; certain issuers treat a crypto purchase the same as cash, which labels the crypto purchase a cash advance and tacks on larger interest rates and cash advance fees.
Post Donation Policies on Your Website
The best time to decide what you might do in a given situation is before that situation happens. And one of the best ways to show members what types of donations are acceptable is by brainstorming some fundraising ideas. But, the last thing you want is to poorly receive a donation. If a member of your church donates in crypto before you have a plan for accepting crypto donations — well, it could be a bit awkward.
For instance, crypto aside, say one of your members wants to donate a timeshare. It’s a genuinely lovely offer, but there isn’t much the church could probably do with a timeshare. With a donation acceptance policy written beforehand, your flock will know what the church can and cannot accept for donations.
Fundraising Ideas for Your Church
You’re probably thinking, “We have fundraisers set up throughout the year — why do we need another?” Well, these ideas have a couple of things in common; They’re fun, and they can all incorporate cryptocurrency. Take a look.
A text fundraiser
Using text messaging as a fundraising method or everyday tool is increasingly compelling. Over 100 million people have a cellphone in the United States, and many of those people tend to do their day-to-day tasks right from their phones, including donations. In fact, it’s becoming one of the most fundamental tools a church can have in its belt. It takes just a few seconds to help support your church, and it’s simple for the giver.
You could even do away with your church’s offering plate and instead open up text tithing at the end of your sermon each week. In this pandemic age, it helps your church stay healthy, physically and financially.
To do this, you just need a donation software platform that supports text donations.
A silent auction
Silent auctions are a powerful fundraising tool. In fact, it’s one of the most effective fundraisers for churches.
You’ll need a bit tech-savvy, but you can run a silent auction entirely online and even accept crypto bids. While some members might not feel comfortable waging a bidding war with their fellow church members, you can have regular giving available through the auctioning platform as well. Those who can’t donate monetarily can offer items for the auction. If hosting the auction in-person at your church, print folding cards to put on every table with your text donation number and the word the attendees need to text to it.
What your website
While you likely have an online donation portal, over time it becomes just part of the site, and it doesn’t stand out anymore. Play with your fonts and color schemes a bit to make your online donation portal a bit more apparent. And you can have fun with it! Have children in your congregation create logos or pictures that you can alternate with the church’s online donation information.
Set up different times of the year for online donation sprints and have prizes for things such as “first to donate”, “last to donate”, or whatever you think would get a giggle or lift some spirits.
Online donations let your congregation fundraise conveniently. Plus, you can include the link in all other marketing materials, even in the trifold handouts before service.
With robust online donation software, you can elevate your church’s giving.
This is an especially fun one! As a church family, there’s nothing more exciting than – bailing each other out of “jail”? Well, you can play with the idea and use the wording most appropriate for your church, such as:
- Jail & Bail: traditional bail-out, where the donations raised for a member “bail” them out of “jail”
- Lost at Sea: set up an area where members are shipwrecked or “lost at sea” and must reach a certain “knot-speed” (knots, in this case, would be the donations) before they find land again.
- Little Lost Sheep: you’re the shepherd, and your “sheep” are lost, so as they get “bales of hay” (one per donation) tossed into their “field”, they find their way home (perfect for a summertime fundraiser held outside).
It’s helpful to have some type of running score for all the participants so everyone can watch as their meter fills up, meaning their fundraising goal was met.
Cryptocurrency and DonorWERX
DonorWERX makes adding cryptocurrency to your list of acceptable donations easy. You won’t pay a signup fee or a monthly access fee — just a small transaction fee for every donation, just like other payment platforms. But DonorWERX is different; we offer your congregation a method for accepting cryptocurrency donations and provide the processing for each transaction, too.
Plus, our platform gives you access to reports that show how your crypto donations perform over time so you can keep track. There’s no limit to the number of donations you can receive each month; all you have to do is sign up.
DonorWERX establishes your digital crypto wallet, accepts your donations for you, and converts them to cash that’s sent to your church by the method of your choosing.
Trust DonorWERX with Your Church Crypto Account
Organizations, companies, churches, and individuals; we all thrive when we respond quickly to new and upcoming trends. While crypto may once have seemed like just a novelty, the adoption of digital wallets is on the rise. If you haven’t decided to make cryptocurrency a part of your church’s donation options yet, the time is now.
Crypto with DonorWERX is the easiest, most streamlined way to offer cryptocurrency giving in your church. You’ll never pay a setup fee, and we believe in transparency.
Be the first church in your area to offer crypto giving — partner with DonorWERX for all your church donation management needs.