You can pay for a scooter, a pizza, and clothing in Philadelphia with cryptocurrency.
“We’ve always been at the forefront of technology,” said Larry Dubinski, president and CEO of the Franklin Institute.
The Franklin Institute donor, tech entrepreneur Dev Chanchani, 46, bought several Bitcoins about two years ago to explore the cryptocurrency phenomenon.
By donating an appreciated asset, Chanchani does not have to pay capital gains tax on the increase in price, and he gets to claim a charitable contribution for the full value.
“I think the Franklin Institute is a wonderful organization,” said Chanchani.
Still, the transaction was cumbersome, requiring several days to transfer the charitable contribution as the Bitcoin brokers processed the sale.
But it has also become a favorite investment for legal speculators.
He donated it to the Franklin a few months ago when it was priced at more than $62,000, near its all-time peak.
Because of the volatile pricing of cryptocurrency, experts in charitable giving recommend that institutions sell the assets as soon as they accept them, the standard practice with most charities that receive gifts of assets like stocks.
“It’s in the best interest of the entity to liquidate the asset as quickly as they can,” said David J.
Toll said that cryptocurrency brokers typically take about a 4% fee to cover the costs of exchanging Bitcoin into cash, which is similar to what an institution might pay a conventional broker to sell donated stocks, and not dissimilar to the bank fees to process a donation made through a credit card.
Though Toll said he has discussed cryptocurrency donations with potential donors, Drexel has not yet received a gift of bitcoin.
Dubinksi, the president of the Franklin Institute, said he needed to create the mechanism from the ground up for accepting Chanchani’s Bitcoin offer.
“One of the topics of discussion was new revenue streams and you could see the eyes light up of my peers when we started talking about cryptocurrency as a way to bring new revenue,” Dubinksi said.