The Code of Fundraising Practice is principles-based, so it can apply to new and emerging forms of fundraising even when they are not specifically mentioned. This includes fundraising using crypto assets.
To help charitable fundraising organisations navigate this developing area, we’ve published a new guide explaining how the code applies if they decide to accept crypto donations.
Crypto is a relatively new and potentially complex source of charity income, although some charities already have experience of accepting it. There are different ways to handle a crypto donation. A charity might convert it into a recognised currency, such as pounds sterling, straight away or later. It might use an intermediary service to receive, hold and convert donations, or manage crypto itself using its own ‘wallet’.
Whichever approach you take, you must follow every part of the code that applies to you.
Even if you do not plan to accept crypto, you should still become familiar with the guide. A crypto donation may be offered unexpectedly, so you need to be ready to decide whether to accept, refuse or return it in line with your policies and the code.
Start with a clear decision
A good place to start is with a proactive decision by trustees about whether to accept crypto donations, rather than waiting until one is offered. Our guide strongly recommends taking this approach.
The Fundraising Regulator does not take a position on whether charities should accept crypto. That decision is for each charitable fundraising organisation, taking account of its own purposes, values and circumstances.
If you decide to accept crypto, reflect this in your donations acceptance policy. You should also carry out an appropriate risk assessment and due diligence, and make sure relevant staff, trustees and volunteers have the knowledge and training they need to manage crypto donations confidently.
Doing this work in advance can help you identify and manage potential risks, instead of having to make important decisions when a donation is offered.
Know the risks
Crypto comes with risks that may need consideration. For example, it may not always be straightforward to identify the person behind a donation, and there may be risks relating to financial crime, sanctions or links to proscribed organisations.
You may also need to consider whether the environmental or social impacts associated with particular crypto assets are consistent with your charitable purposes and values.
This does not mean charities should not accept crypto. It means understanding the risks and putting appropriate measures in place to manage them before accepting donations.
Don't overlook third-party services
It is also important to understand the role of third parties. For example, an online fundraising platform or another service provider may switch on functionality that enables crypto donations by default as part of its service.
Check which services you use and whether they process crypto donations on your behalf. You can then decide whether that arrangement is compatible with your donations acceptance policy.
You remain responsible for making sure adequate due diligence is carried out, including when you use third-party service providers. You should also check that the services meet applicable legal and regulatory requirements.
Help donors understand your approach
If you decide to accept crypto, be open with donors about your approach. For example, you could explain which types of crypto you accept, whether you accept anonymous donations and any other important features of your acceptance policy.
Our message is simple: Be proactive in deciding whether crypto is right for your organisation, understand and manage the risks, and put the right policies, due diligence, systems and training in place.
Whether you decide to accept crypto or not, a clear position will help you respond appropriately if an unexpected donation comes your way and meet your responsibilities under the code.