Despite the volatility of cryptocurrency in recent weeks, an anonymous donor gave $5 million worth of Bitcoin to the University of Pennsylvania, the school announced Thursday. This marks the largest cryptocurrency gift the university has ever received.
The donation is fittingly going to the Stevens Center for Innovation in Finance, the Wharton School of Business‘ home for educating students in the fintech field. The center was established by 1991 Wharton undergraduate alumnus Ross Stevens as a place to learn about digital currency at the top-ranked business school.
“I think given the nature of fintech, this donor wanted to use Bitcoin as an example to give it some visibility that we’re willing to [accept cryptocurrency donations],” says John Zeller, UPenn’s senior vice president for development and alumni relations.
The gift will provide funding for faculty, research, events, and student activities at the Stevens Center, which launched only two years ago. Directed by David Musto, the center offers programming, events, and research opportunities about fintech — a growing interest of undergraduate and graduate Wharton students.
UPenn just started accepting cryptocurrency donations in January 2021 through a partnership with NYDIG, a company which provides Bitcoin technology and financial services to banks, corporations, and other institutions.
“We had been looking at cryptocurrency as a vehicle because we had a number of inquiries from potential donors and alumni who had an interest in being able to support the university using cryptocurrency,” Zeller says. Since the launch earlier this year, the school has received only a few crypto donations, he adds.
New trend in philanthropy
While the identity of the donor remains anonymous, the Bitcoin donation follows a new trend in philanthropic giving. Nonprofit organizations and universities alike have been adapting to accept digital currency to attract and accept donations from Millennials and Gen Z-ers.
“The universities are seeing this as a way to hopefully start building those longer-term relationships with their younger donors,” explains Alex Wilson, co-founder of The Giving Block, a company that facilitates cryptocurrency donations to approximately 300 nonprofits and universities.
Bitcoin donations can be a win-win. Because cryptocurrency is treated as property by the IRS, donors get a capital gains tax break and fair market value deductions on their returns.
Not all universities are up to speed, though.
“A lot of schools and nonprofits in general rely mostly on older donors who are still mailing in checks,” Wilson says.
For UPenn, it remains uncertain whether this gift will encourage more Bitcoin donations to the school in the future. While Zeller explains he doesn’t think cryptocurrency donations will ever supplant the use of securities, he says “We’ll have to wait and see.”
