Cryptocurrency Donation Policy
Action on Poverty (AOP) is an independent, secular, not for profit, non-governmental organisation (NGO). Founded in Australia in 1968, AOP was incorporated in the state of New South Wales in 1983. AOP works with partners and communities in Africa, Asia and the Pacific. AOP is committed to development sector good practice and holds full accreditation with the Australian Government through the Department of Foreign Affairs and Trade (DFAT). AOP is a signatory to the Australian Council for International Development (ACFID) Code of Conduct, which requires high standards of corporate governance, public accountability, and financial management to be in place.
AOP’s Vision: For all people to transcend the injustice, indignity, and inequality of entrenched poverty.
AOP’s Mission: To empower changemakers to break the cycle of poverty.
The purpose of the cryptocurrency donation policy is to establish appropriate safeguards and policies to enable AOP to diversify income streams to accept and receive donations of cryptocurrency. The policy will also outline the reporting and receipting obligations of AOP for cryptocurrency donations.
Cryptocurrency is any form of currency that exists virtually and uses cryptography to secure transactions. It is a digital payment system that doesn’t rely on banks to verify transactions. It’s a peer-to peer system that can enable anyone anywhere to send and receive payments. When cryptocurrency is transferred, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets. It operates on open blockchain networks and is facilitated over wallets and exchanges.
The value of cryptocurrency is driven primarily by supply and demand. This can create volatility and produce significant gains or losses for investors. Currently, Australian law does not equate digital currency with fiat currency and does not treat cryptocurrency as “money”, rather it is property. Cryptocurrency donations are exempt from capital gains tax, which may enable donors to maximise the value of their contributions.
Popular cryptocurrencies include Bitcoin, Ethereum, Tether, Litecoin
This policy applies to all donations received through cryptocurrencies.
Related Policies, Manuals and/or Guidelines
- Control of funds policy
- Fraud control and corruption prevention policy
- Transparency policy
- Fundraising policy
- Donations Manual
- Finance Manual
AOP will accept donations in cryptocurrencies.
To manage the risk of volatility in the value of cryptocurrencies, AOP will convert cryptocurrency donations into fiat currency as soon as possible. Funds will be deposited via an exchange into AOP’s bank account.
The exchange platform used will be Gemini. https://www.gemini.com/institutions/corporations
Gemini is a credible, regulated cryptocurrency exchange wallet and custodian. Large Australian companies such as Commbank also use Gemini as their exchange platform of choice providing crypto trading services for Commbank users.
AOP security requirements for setting up and operating an account on Gemini’s platform will follow the same rigour required to set up and operate an AOP bank account.
Donor receipts will remain in compliance with Australian tax law and include:
- Organisation name
- Australian Business Number
- Note that the receipt is for a gift
- Date the gift was given
- Description of the gift (for example 1 bitcoin). The receipt issued is for the cryptocurrency given rather than the value of the cryptocurrency at the gift date
Accounting for cryptocurrency
The value of each donation will be recorded as income at the value of Australian Dollar received on liquidation of the cryptocurrency.
Blockchain – is a digitally distributed, decentralised, public ledger that exists across a network.
Cryptocurrency – is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
Bitcoin – a type of digital currency which operates independently of a central bank or government. It is the most popular type of cryptocurrency
Ethereum – a decentralised, open-source blockchain with smart contract functionality
Smart Contract – programs stored on a blockchain that run when predetermined conditions are met.
Fiat – traditional currency
Cryptocurrency digital wallet – a wallet is an app that allows cryptocurrency to store and retrieve their digital assets.
Policy Approved date: 17 February 2022
Next revision: One year from approval date