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Research Consultancy

Legal Framework for Charitable

Donations of Virtual Currency
The International Center for Not-for-Profit Law (ICNL) seeks an individual or
organizational Research Consultant to produce a comparative report on the legal
framework for donations of virtual currency to charitable organizations. For purposes
of this research, “charitable organizations” are not-for-profit organizations eligible to
receive tax-benefited donations. “Virtual currency” is generally defined as a digital
representation of value that functions as a medium of exchange, a unit of account,
and/or a store of value (including Bitcoin, and other similar currencies).

Background

As blockchain technology spreads in reach and popularity, donors have become

increasingly interested in contributing virtual currency to charitable organizations.
This development raises the possibility of increasing philanthropic giving, decreasing
transaction costs, enhancing transparency, and promoting philanthropic innovation.
At the same time, complex legal issues arise relating to the donations of virtual currency.
Some countries have developed laws, regulations, and policies to address these issues,
while in other countries there is a legislative gap. The purpose of this consultancy is to
undertake research on countries that have developed the legal framework for charitable
donations of virtual currency and to develop “good practices” and recommendations for
this emerging area of law.

Scope of Research

The research report should cover 7-10 countries that have developed a legal framework
enabling charitable organizations to receive donations of virtual currency. The
following is an illustrative Scope of Research for each country covered in the research;
applicants are welcome to propose revisions to this Scope of Research in their
application.

1. Use Cases
- Please provide a few examples of charitable organizations that accept
donations of virtual currency.

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- If known, please provide data relating to donations of virtual currency (e.g.

estimated number and aggregate value of such contributions, etc.).
2. Acceptance of donations of virtual currency
- Please provide a few examples from different jurisdictions of the actual
processes by which charitable organizations accept virtual currency (e.g., do
they need a “wallet” to receive virtual currency donations, etc.).
- Recognizing that there are over 1,000 virtual currencies and more are being
created, does the law allow charitable organizations to accept donations of
all virtual currencies, or are certain virtual currencies prohibited or favored?
- Does the law permit charitable organizations to accept donations of virtual
currency if the donor’s identity is unknown? Does the law otherwise allow
anonymous contributions for regular donations?
- Does the charitable organization have to register with, or report to, a
regulatory entity in order to accept a donation of virtual currency, or in
order for the donor to obtain a tax benefit?
3. Asset Class, Valuation, and Tax Issues
- How does the law classify virtual currency (e.g., property, currency, security,
cash equivalent, etc.)? Do classifications differ among government agencies
and/or regulatory bodies?
- What are the rules and requirements regarding the determination of the
valuation of donated virtual currency? Who is responsible for determining
this valuation? Are there appraisal or other requirements for donations of
virtual currency? To what extent do the foregoing rules and requirements
depend on the amount of the donation or the identity of the donor or donee?
- What are the tax incentives for donations of virtual currency? Are they the
same as for other types of contributions?
- What must the donor and/or donee do to receive these tax incentives?
4. Anti-money laundering (AML) and combating the financing of terrorism (CFT)
measures
- What AML and/or CFT laws or guidelines apply to donations of virtual
currency? Is this different from other donations?
- Do AML/CFT laws require charitable organizations to know and/or disclose
the identity of donors of virtual currency?
- What other AML/CFT requirements (compliance programs, record-keeping,
reporting, etc.) would apply to charitable organizations accepting donations
of virtual currency?

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5. Holding/liquidation
- Does the law restrict the ability of charitable organizations to hold virtual
currencies received as donations? Are there any requirements that a charity
must liquidate a virtual currency donation within a certain timeframe? If so,
is this true for other donations?
- What are the rules governing the ability of a charitable organization to hold
virtual currency as an investment or as working capital?
- Are periodic appraisals/re-valuations required if a charitable organization
holds virtual currency over time?
- Are there reporting or disclosure requirements upon the receipt, holding, or
liquidation/transfer/sale of virtual currency?
- Are there limitations on a charitable organization’s liquidation or
distribution of virtual currency related to private benefit, buyback, or
recapture concerns?
6. Risks
- Is there a “clawback” law or other legislation that would require a charitable
organization to return a donation of virtual currency if it is revealed that the
virtual currency originated from criminal activity? Do laws like this exist for
other contributions of currency or property?
- What legal remedies exist (if any) if a charity’s holding of virtual currency is
hacked or stolen?
7. Please describe any other key legal issues, questions, or regulatory measures
relevant to charitable donations of virtual currency.

In addition to this descriptive overview, the report should include an analysis section
that distills key findings and challenges. The analysis should identify existing good
practices and recommendations for this emerging area of law.

Proposal
Interested applicants should submit a proposal addressing the following topics:

• The depth of your experience dealing with the laws, policies, and regulations
affecting: (1) virtual currencies, and (2) philanthropy.

• Your experience undertaking legal research and writing reports.

• If more than one person will be involved in this project, a description of who will
undertake different aspects of the project. ICNL reserves the right to approve or
reject the use of any personnel.

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• Any revisions to the Scope of Research presented above, the methodology for
conducting the research, countries you propose to study and why, and the
timeline, including interim benchmarks and drafts of the report.

• The proposed timeline and cost proposal for this consultancy. The pricing for the
cost proposal must be in USD and fully itemized. For personnel costs, please list
each person to be involved in this project, the proposed day rate(s) and number
of days. All other costs, if any, should be listed and explained. The proposed
price should be inclusive of all taxes. ICNL expects to issue one Firm Fixed Price
contract.

Application Instructions
To apply for this consultancy, applicants must submit the following items by August 15,
2019:
• Application coversheet;
• Proposal; and
• Resume or curriculum vitae (cv) for individuals undertaking the research and
writing the report.
Applications should be sent to jobs@icnl.org, with reference made to “Research
Consultancy: Virtual Currency” in the subject line. Applications will be considered on a
rolling basis through August 15, 2019. All application materials should be submitted in
English. Questions related to this consultancy can be emailed to jobs@icnl.org, and
should be received by July 25, 2019. Responses to questions will be posted
at http://www.icnl.org/jobs/index.html.

Selection Criteria
Applications will be evaluated based on the following factors:

● Compliance with the application procedures;

● Depth of experience with the subject matter of this research consultancy;
● Experience researching and writing similar reports;
● Quality of the proposal;
● Commitment to producing high quality reports in a timely manner; and
● Proposed Fee/Firm Fixed Price and value for money.
Issuance of this solicitation does not constitute an award commitment on the part of
ICNL nor does it commit ICNL to pay for cost incurred in the preparation and
submission of an application.

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