Earlier this year, a US House candidate in the 1st Congressional District of Missouri, Dan Elder, announced that his campaign would be funded entirely on bitcoin donations. The move to accept only bitcoin donations came about as a result of Elder's desire to draw attention to bitcoin during his campaign as well as his time in office, if elected.
The ability of Elder to accept bitcoin donations was preceded by a decision issued by the Federal Election Commission in May that allows in-kind donations in bitcoin. There is a limit of $100, however. Prompted by inquiries from political action committees, the decision by the FEC has made it possible for campaigns to accept donations in bitcoin from supporters and constituents.
A decision by the FEC regarding the acceptance of bitcoin donations had previously been delayed following a request from Make Your Laws for further clarification on the matter. Make Your Laws is an organization that works to facilitate political contributions. MYL had issued the request in an effort to gain guidance regarding the acceptance and use of bitcoin donations.
As part of the decision-making process, the FEC determined that political campaigns are responsible for adhering to all existing guidelines required for reporting the sale or receipt of bitcoins. Such regulations include the collection of personal information from donors.
Make Your Laws had also requested guidance on the disbursement and sale of digital currency. FEC found that under current US federal election laws, PACs or campaigns are allowed to purchase bitcoins for investment, but bitcoins may not be disbursed from the organization. Disbursement is only allowed occur if the digital currency is sold and the proceeds from that sale are specifically placed in a campaign depository.
The amount of bitcoin donations will be based on the value of bitcoins at the time that the donation is made. A committee may opt to decide whether it wishes to cash out immediately or hold the bitcoin donations as an investment. Even so, the organization is required to convert bitcoin into US dollars prior to spending the donation or depositing into a campaign account.
Concerns regarding issues related to anonymity were handled by the FEC with a ruling that detailed information regarding donors is required to be reported. Prior to the ruling issued by the FEC allowing bitcoin donations, no laws existed that would prohibit the use of the digital currency as a political donation. The use of the currency had remained somewhat up in the air after a split decision by the FEC in November regarding whether campaigns would be able to accept bitcoin donations. Despite the initial deadlock vote, the FEC later transitioned to a unanimous vote.
Elder's campaign was the first such to accept only digital currency in the United States. The candidate has stated that he first became aware of bitcoin several years ago. He has been involved in technology as well as the Liberty Movement, which has provided significant support for digital currency. While Elder's campaign may have been the first to accept only digital currency, it has certainly not been the last. US Congressman Jared Polis has also expressed interest in the fundraising potential associated with bitcoin. Earlier this year, Representative Steve Stockman of Texas also began accepting donations in bitcoin. Representative Stockman later filed a digital currency bill in Congress.
Since the decision by the FEC to allow bitcoin political donations, an increasing number of candidates have announced that their campaigns will be accepting the digital currency. In a bold move, the Republican Party of Louisiana has also accepted that it will also accept bitcoin contributions. The only other state to make such a move is New York.
Political campaigns are not the only organization to announce that bitcoin donations will be welcome. The United Way Worldwide has also since announced that contributors may take advantage of the option to donate via bitcoins. Traditionally, the United Way has established a precedent for allowing supporters to donate via a variety of options, including planned giving, workplace campaigns, and the donation of stock. With the move to accept bitcoin donations, United Way becomes the largest charity in the world to accept a digital currency. The CEO of United Way Worldwide has stated the decision to accept bitcoin offers the opportunity to make it easier for donors to support causes that that are important to them. In order to accept the donations, United Way partnered with Coinbase. United Way Worldwide is the largest privately funded nonprofit in the world with almost 10 million donors. The charity raises more than $5 billion annually.
The move by both the FEC and United Way to accept bitcoin donations has proven to be an important boon to supporters of cryptocurrencies.