The University of Pennsylvania confirmed today that it still had a portion of a $5 million Bitcoin donation from earlier this year.
According to John Zeller, senior vice president of alumni relations at the university, the unnamed donor’s preferences were a factor in this decision.
“The donor’s intention was to make a promotable contribution of that size, to say, ‘If you’re interested, we’re in the crypto realm, and we can accept it.'”
The institution publicized the bitcoin contribution with the kind of fanfare usually reserved for larger donations of fiat assets like stocks, bonds, and real estate, but it’s worth noting that it didn’t go through all of the regular channels.
“Our approach had been to generally sell everything promptly, even if it had been $5 million in stock,” Zeller explained.
“We liquidated some; we’re holding some,” Zeller said about Bitcoin.
The development follows years of a broader discussion among NGOs over how to manage cryptocurrency payments.
Benefits for contributors, such as the potential to avoid capital gains taxes when bitcoin is donated to a charity, have received less attention in recent years.
International bitcoin donations, on the other hand, may offer the largest benefit, as final settlement can take as little as 10 minutes for extremely low costs.
All international fiat transfers, on the other hand, are subject to exorbitant costs, and ultimate settlement between central banks can take days (at best) or weeks, or even months. Some believe that in the fiat world, ultimate settlement never really happens because of the constant danger of confiscation.
As a result, it’s becoming more widely accepted that bitcoin could be a better donation option for international charity organizations.
“You can have the local office in the region convert the crypto into the local currency, and now you don’t have to pay the wire fees on the transfers,” Tom Pageler, CEO of Prime Trust, a firm that custodies bitcoin on behalf of businesses and donors like UNICEF, said in an interview with the publication.
“You can obtain money there right away,” Pageler continued.
Bitcoin donations are accepted and have increased at large donor-advised funds like Fidelity Charitable (over $35 billion in assets) and Schwab Charitable ($17 billion).
Fidelity received $13 million in cryptocurrency donations in 2019, $28 million in 2020, and $150 million so far this year, according to a representative Stephen Austin. What percentage of these donations were made in bitcoin is unknown.
According to John Zeller, who assisted in the bitcoin donation to Penn, “When a donor says, ‘I have some Bitcoin,’ it’s great to know you can do it.’
“We can accept it now without the university coming to a standstill.”