OCF can now receive cryptocurrency
Published on February 9, 2022 by Alanna Irving

Support amazing initiatives with crypto, and get tax benefits too

At Open Collective Foundation, we support many payment methods, because our goal is to lower barriers between our initiatives and the resources they need to do their amazing work in communities. In addition to direct fundraising by credit card, PayPal, bank transfer, and check, we support institutional grants, anonymous donations, stock donations, in-kind donations, donations through DAFs, donation matching, and third party fundraising tools like Benevity—and we're always exploring new payment options.

Now we can receive cryptocurrency donations, too. 

How to pay with crypto

Right now this is a manual process. 
  1. Donor emails us saying to which initiative and in which cryptocurrency they want to donate. 
  2. We check with the initiative to see if they approve (see below for more about why). 
  3. If so, we provide a wallet address to the donor.
  4. Donor makes the transfer.
  5. OCF receives the crypto and immediately sells it for dollars.
  6. The dollars are credited to the initiative’s budget (less OCF’s standard fees).
  7. We provide the donor with a tax deductible receipt.
It’s manual, so the above steps can take some time to complete. If there’s sufficient interest and uptake, we’ll prioritize building a technical integration so that people can pay instantly in crypto directly from initiative pages using an automated process, like our sister nonprofit OSC already has.


Crypto benefits

For contributors, donating crypto to a 501(c)(3) nonprofit like OCF has serious tax benefits. You receive a tax deduction for the value of the crypto, and avoid the capital gains tax you would otherwise have to pay when selling. OCF sells the crypto tax-free and gives the proceeds to the initiative. This means a bigger tax deduction for you and more money for the initiative.

For initiatives, crypto opens up another donation channel and resource pool. Over a trillion dollars worth of crypto is out there in the world, and many people holding it want to do good. This option makes giving more convenient and enticing. We take care of the often messy and confusing aspects of managing crypto transactions, so you don't have to necessarily understand all the details about how blockchains work.

Contributing crypto directly to OCF also cuts out payment processor middlemen, meaning all the money can go to the initiatives instead of some being siphoned off to credit card processors or other fees. 

Crypto concerns

When OSC switched on opt-in crypto contributions, some people expressed concerns about the environmental impact of proof of work cryptocurrencies, like bitcoin, which uses obscene amounts of electricity. We assume some in the OCF community will feel the same, alongside other concerns about ethical problems in the crypto world like scams and inclusion.

We absolutely agree that these concerns are valid. But it’s not that simple. 

The problems with crypto are dwarfed in scale and severity by those of the mainstream capitalist economy running on dollars. The vast majority of climate damage is being done using fiat currency, and we have all sorts of payment methods for dollars already. Just as eco-friendly crypto coins could have been previously exchanged from bitcoin, donated dollars may also have problematic origins. Some initiatives would accept a government grant, corporate sponsorship, money from an investment bank DAF, money from a billionaire’s foundation, stock donations—and some wouldn’t. Where exactly should we draw the line? 

Like it or not, crypto exists and is out there, about a trillion dollars worth by some estimates. Do we just leave it sitting there? Or worse, leave it to fund even more negative social and environmental impact? Or, do we create a way to do something good with it? The real solution to climate change is to dismantle the economic and power structures that underpin the deeply broken aspects of our society. We don’t do that by ceding financial power; we do that by claiming it.

OCF has to be very picky about which initiatives we accept and how their money is spent, both to meet regulatory requirements as a 501(c)(3) and to hold true to our positive impact mission. But standards about where money is donated from can be a lot more murky, nuanced, and context-dependent. We believe that moving money from problematic sources and institutions into good hands is overall a positive, and that it should be up to our initiatives to make those hard calls for themselves.

OCF creates all kinds of channels for money to flow out of the legacy economy and into the solidarity economy. We put money in the hands of activists and community builders who are creating an alternative positive future, and we support their vision and their autonomy. Some sources of that money might border moral gray areas. In a complex world, that’s the line we walk.

So, it’s up to initiatives to accept or reject cryptocurrency overall, or particular coins. If someone wants to donate crypto, we’ll check with the admins first and then proceed accordingly. 

As always, we’re open to your feedback and questions.
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Tristan Miller

Posted on February 9, 2022

This is a terrible idea, and the arguments you present in favour of it are completely spurious.

You write that the vast majority of climate damage is done using fiat currency.  But if everyone suddenly stopped using fiat currency, that criticism would be just as true for whatever form of money replaced it.  At least fiat money has the advantage of not inciting a free-for-all race amongst get-rich-quick schemers to incinerate the planet with excessive power consumption.  I'm all for "dismantling the economic and power structures that underpin the deeply broken aspects of our society", but replacing the money system with one that is orders of magnitude more environmentally damaging, and offers significantly less privacy for anonymous or pseudonymous users, is not the way of doing so!

Where exactly should we draw the line, you ask?  How about at enabling the grifters, speculators, and useful idiots of the biggest and most wasteful pyramid scheme in history?

It was only a few weeks ago that the Mozilla Foundation started accepting cryptocurrency donations, and then suddenly had to put this program on hold after a massive public outcry.  They're now reviewing their policy to determine "its impact on [their] climate change commitments".  I call upon OCF to do the same.  If you insist on continuing to process cryptocurrency, let's see you spell out the benefits and costs with some actual numbers rather than fallacious arguments.  And when you provide that report, please disclose the identities of any authors/consultants who helped prepare it and their connections or potential conflicts of interest with the cryptocurrency world.

Alanna Irving

Posted on February 9, 2022

Thanks for your thoughts, Tristan, but as your Collective isn't hosted by OCF and you're not really a stakeholder in OCF's policymaking, I'd also like to hear from voices in the OCF community. As explained in the post, OCF initiatives can opt out of receiving cryptocurrency if they agree with your line of critique. 

As for my personal thoughts.... crypto is evolving. The story of web3 and decentralization in our common future is bigger than any one specific type of blockchain, and bigger than cryptocurrency itself. I think proof of work will die off, but we need to engage with this emerging economic paradigm now, because if everyone who thinks about wider impacts stays away, it will continue to be defined by wrong-headed thinking. I'd rather lean in, reclaim some of its power, and help it go in a better direction. 

And if someone wants to give us a bunch of money to do that, I'm open to taking it, even if it's coming in a problematic form. Yes, it's an imperfect compromise. That's why I don't presume to make this choice for all our initiatives, only to give them options.
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Angel York

Posted on February 10, 2022

"At least fiat money has the advantage of not inciting a free-for-all race amongst get-rich-quick schemers to incinerate the planet with excessive power consumption."  I'd like to introduce you to Gold Rushes.  Fiat money is the same, but gold rushes are easier to point to.

Cryptocurrency is a grey area.  Thanks for leaving it up to individual projects rather than making it an automatic option.  And thanks for the post.
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Carl Oscar Aaro

Posted on February 17, 2022

This is a step in the right direction in my opinion, and great to see that OCF is on track to adopt rising technologies. Looking forward to having crypto donations available natively, without the manual steps mentioned, when the legal / compliance concerns has been sorted out. 👌
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Konstantin Dmitriev

Posted on March 17, 2022

The problems with crypto are dwarfed in scale and severity by those of the mainstream capitalist economy running on dollars. The vast majority of climate damage is being done using fiat currency ...
The real solution to climate change is to dismantle the economic and power structures that underpin the deeply broken aspects of our society.

Hi Alanna! I absolutely agree with that.
It also worth to note that most of protests against crypto are based on "C-O-2 problem", while many scientists are already pointing that current climate change process is not related with C-O-2, but is a result of cyclic processes instead. And this is a real problem today. On that matter I really recommend to examine facts provided by scientists on this international online conference (start watching from 2:52:00) - https://youtu.be/NJQ0ntduJjE?t=10320.

In that aspect, I (personally) got an impression that ecological protests against crypto are artificially boosted by mainstream capitalist economy with a purpose to "shoot down" an emerging alternative.