University of Pennsylvania Receives $5 Million in Bitcoin

Non-profit organizations receiving cryptocurrency donations

The value of Bitcoin can easily go up or down.

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The University of Pennsylvania announced that it has received a gift in the form of a donation, worth five million dollars, to the Wharton School of Business.

As for the gift, it is from an anonymous Bitcoin donor, so the announcement was a trial balloon, indicating that cryptocurrencies are now accepted for donations, such as stocks, bonds, real estate, and other investments.

“A few years ago there was a lot of discussion among nonprofits about cryptocurrency and whether we should accept it,” said John Zeller, senior vice president of development and alumni relations at the University of Pennsylvania. And we can accept it.”

Cryptocurrency, as an asset to donate to charity, is as complex as the asset itself and the reasons for owning it, and currencies such as “Bitcoin”, “Ether” and other cryptocurrencies have many characteristics of publicly traded securities.

As for the recipient, the value is easy to see, and for the giver, any gains that would have been taxed are erased when the "origin" goes to charity.

But cryptocurrencies have been more volatile than almost any single stock, and this increases the risk to the recipient, and may make it more difficult for the donor to commit to a fixed amount.

(Cryptocurrencies, which are currently worth $5 million, could be worth $3 million or $7 million just next week.)

It is also true that donating cryptocurrency can be more convenient for international aid, as it simplifies the task of sending money to a specific country, and blockchain technology can enable the organization to track exactly how cryptocurrency is used.

John Zeller told the New York Times that the university contracted with a platform that manages cryptocurrency transactions, at the beginning of 2021, and soon after, it received a donation of $25,000 of Ether from a young graduate, who wanted the gift to go to the scholarship fund. the public.

However, the $5 million gift of Bitcoin, in May, was more complicated, as the donor wanted the donation to be large enough to attract attention, which would help the university obtain similar donations, and at the same time the donor wanted to fund research and programs At the Stevens Center for Innovation at the Wharton School, he also wanted the university to keep at least some donations of bitcoin, but the problem of what would happen if its value went down had to be resolved.

Of course, Bitcoin or any other cryptocurrency can rise in value just as easily, which is why some cryptocurrency owners prefer not to donate it to a charity.

There are at least two reasons why crypto gifts are smart for both sides. Cryptocurrencies are like any “asset,” including securities and real estate, in terms of taxation. There are no capital gains due on assets given to charities, so the nonprofit receives more of funds effectively, and the second reason is that the “Blockchain” technology has proven its effectiveness in transferring, tracking and calculating the money sent internationally.

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