Cryptocurrency Donations pose problems

It's hard enough figuring out how to manage donations of art or other nonfinancial assets — now some not-for-profits must navigate the challenges that come with cryptocurrency donations. According to Bloomberg, several colleges and universities have recently received crypto donations. These can raise accounting questions, complicate tax filings and require special storage or security.

For example, because the IRS considers cryptocurrency to be property, not-for-profits must take more steps than when they process cash or securities donations. Moreover, cryptocurrency has proven subject to dramatic swings in value that make it difficult to determine the optimal time to cash in and may lead to significant fluctuations in your bottom line.

As Bloomberg reports, the University of Puget Sound immediately sold an alumnus' donation of 14.5 Bitcoin for about $10,000 in 2014. Subsequently, the value climbed to more than $200,000. Of course, the value also could have dropped.

Foundations out of touch with not-for-profits' needs, study says

Foundations are not as tuned into not-for-profits' needs as they think they are, a Center for Effective Philanthropy survey reveals. The survey report, Strengthening Grantees: Foundation and Not-for-Profit Perspectives, examines the support that foundations provide grantees to strengthen their organizations.

Based on responses from 170 not-for-profit CEOs and 187 foundation leaders, the researchers concluded that not-for-profits most desire help in fundraising, staffing and communications. However, the CEOs see grants for general operating support as having the greatest effect on strengthening their organizations.

The findings suggest that both foundations and not-for-profits have a role to play in closing the perception gap: Not-for-profits are advised to ask for what they really need, rather than what they think funders want to provide. And foundations should work to reduce the dynamics that discourage not-for-profits from doing so, by building strong relationships rooted in understanding and transparency.

AI bolsters fundraising potential

Not-for-profits are beginning to recognize the potential of artificial intelligence (AI) to make data-based predictions about current and potential donors — and even to draft personalized outreach messages. AI generally refers to the use of computer systems to perform tasks commonly thought to require human intelligence, such as problem-solving and decision-making. It includes "machine learning," an iterative process in which machines improve their performance over time.

For example, Cure Alzheimer's Fund improved its major donor retention via machine learning. AI helped the charity develop outreach plans by suggesting which donors to contact each week throughout the year. The result has been a 49% increase in dollars received through fundraising, the Fund reported.

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