supported philanthropy, he points to the BitGive Foundation (whose bitcoins help to fund people-to-people environmental efforts and health causes in developing counties) and to nonprofits like Fr33 Aid that provide medical supplies and aid to third-world areas (using bitcoins to bypass high money transfer fees and unstable banks).4
Based on this admittedly rough profile, chances are slim that members of the bitcoin community will follow traditional steps up the philanthropic pyramid. Few bitcoins are likely to find their way into a campaign to build a new hospital annex, much less to pay for gala tickets or a golf tourney. Current users of the currency are not prone to respond to such appeals.
Community service programs sponsored or co-sponsored by hospitals and health care systems would seem more likely to attract bitcoin donors, especially initiatives undertaken in partnership with local nonprofit groups to benefit disadvantaged individuals and families. Such programs may range from neighborhood clinics, to outreach education aimed at combating obesity or teen pregnancy, to free diagnostic programs such as audiology and mammogram screenings.
Social media are the most likely channels through which the bitcoin community may embrace these philanthropic opportunities. But first, development offices must be sufficiently tech-savvy to accept virtual currency donations and to put them to good use. In addition, gauging ROI can be problematic.
As digital philanthropy continues to grow in the health care arena, we will have to wait and see whether bitcoin finds a significant niche.
1 Richard Satran, “How did bitcoin become a real currency?,” US News, May 15, 2013, accessed May 28, 2014. In its March 2014 Notice 2014-21, the IRS stated, “For tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.”
2 Brent Randall, “Virtual currencies: Implications for charities,” Drache Aptowitzer, April 20, 2014, accessed May 28, 2014.
3 Garrick Hileman, “Why bitcoin’s price has leapt 65% since April,” CoinDesk, May 28, 2014, accessed May 28, 2014.
4 Steven Melendez, “How nonprofits are cashing in on the cryptocurrency boom,” Motherboard, May 9, 2014, accessed May 28, 2014.