Crypto fundraising guidance: what charities should consider

The Fundraising Regulator issued new guidance in October explaining how charities should approach accepting cryptocurrency and other crypto asset donations. Whilst it is recommended that all charities consider the guidance, it applies to charities that do not already have a policy of refusing crypto donations.

'Crypto' in the guidance covers any digital asset including cryptocurrency and non-fungible tokens (NFTs) received as a donation. Donations may be direct into the charity's own custodial or non-custodial wallet or indirect and received through an intermediary.

The guidance outlines the key risks associated with crypto which include difficulty verifying donor identity, heightened exposure to financial crime and links to proscribed organisations potentially being difficult to detect. The environmental and social impacts of crypto could also conflict with charitable values.

Charities accepting crypto should ensure that they do the following:

• Implement a written acceptance policy covering accepting, refusing and returning donations, regardless of expected value;
• Check whether fundraising platforms process crypto by default, and close or empty any wallets if they stop accepting crypto;
• Be transparent with donors about the acceptance policy for crypto donations; and
• Carry out a strategic risk assessment and assess whether an individual donation in a given scenario aligns with the charity's purposes and values. A formal trustee decision should be taken which is properly documented and is subject to regular review. 

If a crypto payment has been planned, due diligence should be undertaken in respect of infrastructure providers and individual donations to manage money-laundering and other risks. Crypto is not recognised as UK currency and is not eligible for Gift Aid. Any serious incidents arising in relation to crypto should be reported to the relevant charity regulator and self-reported to the Fundraising Regulator.