CAN MY CHURCH ACCEPT BITCOIN DONATIONS?

Yes! But… 

It is totally fine for the church to receive bitcoin and other cryptocurrency from an accounting perspective. From an admin perspective, however, it is much more complicated. It is simpler if the church receives and liquidates the cryptocurrency on the spot. Some organizations use a third-party intermediary to receive crypto donations for them and convert to cash on the spot for a fee. That is probably the simplest way to handle it for the church.  

Expecting Donations in the Future?

What should you do if your church is expecting a future donation or if it already has bitcoin donations coming in? Well, we recently experienced an example where the donor wanted to gift bitcoin to a church without liquidating to avoid having to pay capital gains tax.  

In this case, was there a way for the church to set up an account to receive the crypto donation and then liquidate it, similar to stock donations?  

Absolutely! 

What Next?

So, the church can either set up an account on a bitcoin exchange, set up a wallet and receive the bitcoin directly (the more complex approach), or the church can choose a third-party service to receive the bitcoin so the donor does not pay any capital gains. That third party service will then convert it to cash, charge a fee of 2-3%, and pass the cash on to the church just like any other standard donation.   

Because of the nature of crypto, unless the church has someone technically sophisticated and knowledgeable, we would suggest going with the second approach of using an intermediary.

Though we do not necessarily recommend a particular third-party intermediary, anyone can find several options when searching the internet. It should be pretty easy to do a little homework and pick one that works for you.