One of the most exciting developments in the world of digital currency is the growing importance of customized currencies. The most famous commercial result of the burgeoning popularity of creating new digital coin types is the “initial coin offering” which essentially allows a company to issue digital currency to investors in place of stock.

Because of the nature of cryptocurrency, and its dual purpose as an exchange medium and a store of value, the concept of a general-purpose or “at-large” equity share has been established, which grants the purchaser both a quantity of currency equal to the value of their investment and also a pseudo-equity in the coin type itself. It was only a matter of time before other organizations started to make use of this innovation. At the front of the line were non-profits, who may have finally discovered a way to weightlessly raise money for their various causes.

Contribution in-kind

What if a charity could reward a contributor with something of equal or greater value in exchange for their donation? How might that affect the veracity of any non-profit or charitable cause? What if it were possible for a non-profit organization to issue some kind of equity in the charity itself in exchange for certain levels of donation activity?

With a digital currency it is not only possible, but likely. Once a cryptocurrency is in the wild, the potential for its value to increase is ever-present. The higher its value, the greater the financial security of the charitable foundation. It is the ultimate win-win made possible by an extraordinarily powerful technology.

Board of directors

Likely the most important feature of a cryptocurrency is its distributed and accurate ledger. Having exacting records of who contributed to what project, how much and when can make the difference between a successful campaign and an impossible-to-manage mess. In a market where hyper-focusing on a narrow niche group of customers and fans is becoming the lingua franca of marketing, having detailed information on a charity’s top donors is positively priceless.

Since the digital currency ledger is an electronic record, it makes communicating with donors much easier than if two separate records have to be synchronized. The capacity for an accounting system to automate the process of coordinating contributions and then directing them to the right places can improve results by dramatically lowering costs.

It remains to be seen what touches the nonprofit world puts on cryptocurrency to make it as valuable to charity as it already is to business and individuals. There can be no doubt the rise of the blockchain is likely to improve prospects for most, if not all organizations.