With the apparent volatility that Bitcoin has, how will they decide when to cash that out? Any amount is obviously good for the FSF but maximizing the donation may be a bit tricky with the current markets.
I would expect them to do so imminently to normalize it into the budget. If someone gave them $1M worth of gold I would not expect them to sit on it (what possible use would FSF have with gold as a material?), but rather convert it into resources which then can be used to fund projects.
I wonder how easy it would be to liquidate these bitcoins? I would imagine that Joe Blow tries to liquidate the same amount, alarm bells would ring very loudly.
It is not easy, especially if you don't already have an account at a Bitcoin exchange. See my other comment at https://news.ycombinator.com/item?id=16277833 for more details (tl;dr: we've been looking/signing up for exchanges for over 3 weeks and none have responded to our signup request yet).
To clarify, by "we" I don't mean FSF. I work for a different 501(c)(3) non-profit.