FAQ’s

Is the process of giving cryptocurrency safe and secure?

• Our third-party platform, Engiven, provides the highest level of safety by using blockchain security. Relying on the networks of thousands of computers to verify transactions, Engiven drastically minimizes the risk of cyber-attacks or fraud.

What is cryptocurrency?

• Cryptocurrency is also known as virtual currency or crypto. It is virtual or digital money in the form of tokens or coins. Designed as an alternative to sovereign fiat currency, cryptocurrencies can also be traded, bought and sold on exchanges with U.S. dollars and other traditional currencies.
• Records of cryptocurrency transactions are kept in public, digital ledgers called blockchains. In essence, a blockchain is a group of people, called miners, who lend their computing power to verify other users’ transactions so that the same token or coin isn’t spent twice.
• Most people think of Bitcoin when they hear the word Crypto, but thousands of other cryptocurrencies, such as Ethereum (ETH), Litecoin (LTC) and Dogecoin (DOGE) exist.

What is the difference between the various cryptocurrencies?

• Bitcoin, launched in 2009, is the original cryptocurrency and the most widely used. It was designed with a finite supply of tokens/coins. Bitcoin Cash (BCH) is a new version of Bitcoin that features a faster verification process.
• Several thousand digital currencies other than Bitcoin now exist. Collectively, they are called altcoin (alternatives to Bitcoin), and most have been developed to improve upon Bitcoin in some way.
• Some altcoins use a different process to produce and validate transactions. Others might offer new features or an advantage like lower price volatility. Gemini Dollar (GUSD) is an example of a stablecoin, a class of cryptocurrency that attempts to offer price stability by pegging its value to the US dollar.
• Many altcoins have little to no following or trading volume, but some, like Dogecoin (DOGE) and Ethereum (ETH), are immensely popular.

What is the Engiven platform?

• The Engiven platform is the software First Baptist Church uses to process cryptocurrency donations. Engiven enables nonprofits like FBC to securely receive cryptocurrency donations. Then those donations are exchanged for usable currency, such as US dollars.
• Learn more about Engiven. 

Do churches that accept cryptocurrency gifts prefer Bitcoin over other cryptocurrencies?

• While Bitcoin is the largest and most widely accepted cryptocurrency, most charities who accept cryptocurrency donations work with a vendor to process them and can consequently accept dozens of different crypto donations.
• First Baptist works with Engiven to accept 39 of the most prevalent cryptocurrencies.
• Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), Zcash (ZEC), ChainLink (LINK), Orchid (OXT), Dai (DAI), Basic Attention Token (BAT), Amp (AMP), Compound (COMP), PAX Gold (PAXG), Ox (ZRX), Balancer (BAL), Curve (CRV), Decentraland (MANA), Kyber Network (KNC), Maker (MKR), Ren (REN), Storj (STORJ), Synthetix (SNX), UMA (UMA), Uniswap (UNI), Yearn.Finance (YFI), Aave (AAVE), Filecoin (FIL), Enjin Coin (ENJ), Bancor Network Token (BNT), 1inch (1INCH), Skale (SKL), The Graph (GRT), Loopring (LRC), Sandbox (SAND), Somnium Space (CUBE), BarnBridge (BOND), Sushi Swap (SUSHI), Injective Protocol (INJ), Livepeer (LPT), Dogecoin (DOGE)

What will FBC do with my cryptocurrency donation?

• Engiven will immediately exchange your donated cryptocurrency for US Dollars at the current exchange rate. Then the proceeds will be deposited into FBC’s bank account. Because First Baptist does not directly trade in cryptocurrency, the organization will not hold any donated cryptocurrency for a potential rise in value.

How will my cryptocurrency gift to FBC be receipted?

• Givers who provide an e-mail address will receive a PDF receipt from the Engiven platform. The receipt will include the type and number of coins donated, the date and time of the donation, the FBC fund given to and other details.
• A formal year-end tax receipt will also be available from FBC to givers who provide their name and e-mail address. It will detail crypto donations along with donations of any other type made to FBC during that calendar year. Givers will be notified by e-mail when the year-end tax receipt is available, typically by mid-February.
• A formal year-end tax receipt cannot be made available to givers who choose to give anonymously because the IRS requires each receipt to be made out to a named individual or company with a tax ID number.

Is a Bitcoin gift to a nonprofit organization tax deductible?

• Yes. Your tax deduction will be equal to the fair market value of the donated cryptocurrency as determined by a qualified appraisal (see next FAQ).
• Since nonprofits are exempt from paying capital gains tax on the sale of assets, the full value of your cryptocurrency donation, along with your tax deduction, stays intact.
• For example, suppose you purchase cryptocurrency for $3,000. Then, by the time you make a donation, your crypto valuation is $11,000. Since your direct donation is a non-taxable event, the church receives the full value of your donation — $11,000.
• On the other hand, if you sold that cryptocurrency now valued at $11,000, you would pay $2,384 in capital gains tax (assuming a federal tax rate of 23.8% and a state tax rate of 6%. This does not include any local taxes that may be due). Your donation of the after-tax proceeds would then be only $8,616.

How should a giver value their cryptocurrency gift for federal tax purposes?

• For U.S. tax purposes, virtual currency transactions must be reported by the taxpayer, in U.S. dollars, at the fair market value on the date of the donation. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars at the exchange rate in a reasonable manner that is consistently applied.

Is it more expensive for the church to accept cryptocurrency gifts compared to credit card gifts?

• As with credit card vendors, cryptocurrency processing vendors (in FBC’s case, Engiven), differ in their fees. However, in most cases the fees associated with accepting and converting cryptocurrency are similar to those associated with processing credit card donations.