How to Donate Cryptocurrency

Donating Cryptocurrency

As the cryptocurrency market increases in value and popularity, charities and nonprofit organizations are beginning to accept crypto donations. If you’re a current crypto holder who is passionate about nonprofit causes, donating it offers significant tax deductions for you and even more benefits for your favorite organizations. Here are two ways to give crypto to the participating nonprofit or charity of your choice. 

Simone’s Kids in Nakaseke, Uganda provides education and meets basic needs for children in order to help them break the cycle of poverty. We have big goals for 2022 and donating Cryptocurrency is one of the easiest tax-efficient ways to support the future of Simone’s Kids! To learn more about who we are and what we specifically do, check out our About Us page.

Give Through a Donor-Advised Fund

A donor-advised fund (DAF) is a public charity that works as a philanthropy management service. DAFs allow donors to make contributions, receive tax deductions, and recommend gifts to the organizations or causes of their choice. DAFs generally have the knowledge and capabilities needed for evaluating, receiving, processing, and liquidating crypto.

To donate crypto to a DAF, follow its instructions for doing so. First, select a crypto type and amount that you’ve owned and allowed to appreciate for over one year to avoid paying capital gains tax on it. Transfer it to your DAF and make recommendations as you normally would. 

Give Directly to Charities Through Their Cryptocurrency Donation Platform 

You can also donate crypto directly to a nonprofit or charity; for reference, consult this list of nonprofits and charities that accept cryptocurrency donations. 

If your organization participates, check their website for a donation page, where you’ll find their crypto donation platform of choice. These platforms provide automated donation processing for charities. Currently, the most popular is The Giving Block, but similar ones include BitPay, Giveth, BitGive, Giftcoin, and others.

Using the platform, follow these general steps:

  1. Select the currency type and amount to donate.
  2. Fill out a form with basic information about yourself, including the email address you’d like your tax receipt sent to.
  3. Follow the instructions to transfer your crypto to the generated dynamic wallet address and confirm with the cryptocurrency donate button.
  4. Check your email for a tax receipt. 

You can find additional ways to donate crypto here.

Simone’s Kids has partnered with the platform The Giving Block. You can check out more information & donate directly through our site at: cryptocurrency – Simone’s Kids.

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Why You Should Donate Cryptocurrency to Charities

New Ways to Give: Many Charities Now Accept Cryptocurrency Donations

Cryptocurrency, whose invention in 2009 first brought the world Bitcoin, has largely been on the rise in value and popularity for over a decade. Since then, other forms of the blockchain-based digital currency known as crypto have emerged. The total value of all cryptocurrencies, now used by over 100 million users globally, currently exceeds $1 trillion. Resourceful and tech-savvy charities and nonprofits have taken notice, and some are beginning to accept crypto donations. 

Cryptocurrency May Strengthen Economies In Developing Countries

Many may not know that from its inception, crypto has been envisioned by some as a means for decentralizing global wealth and strengthening economies in low-income or developing countries. Almost nowhere is this more valuable than in Sub-Saharan Africa.

Simone’s Kids in Nakaseke, Uganda provides education and meets basic needs for children in order to help them break the cycle of poverty. We strive to give each student a successful future through education, healthcare, adequate nutrition and ministry. Donating Cryptocurrency is one of the most tax-efficient ways to support the mission of Simone’s Kids! You can check out more information at: cryptocurrency – Simone’s Kids. Your donations help purchase school supplies, textbooks, food, and other necessities for Ugandan students.

 

Cryptocurrency Donations Benefit Both Charities and Donors

Charitable crypto donations offer significant benefits. The Giving Block, which is designed specifically to help nonprofit and charitable organizations accept the currency, is currently the most popular platform. Such platforms help charities benefit from crypto donations in a number of ways:

    • Bypasses the capital gains tax for donors 
    • and charities. Because crypto donations aren’t subject to the capital gains tax for either the donor or the recipient, charities receive the full value of donations.
    • Offsets other tax obligations, encouraging more giving. Crypto holders must pay taxes on the currency they bought, sold, received, or exchanged during the year as part of their capital gains. However, these can be offset by charitable donations, a major incentive to donate cryptocurrency to avoid tax each year.
  • Diverse funding options. Crypto donations diversify income for charities and nonprofits. Because the majority of crypto owners are under the age of forty, organizations that accept this currency can tap into a new donor pool. In doing so, they make younger generations feel valued, which encourages donor support.
  • Requires minimal effort and resources. Crypto platforms automate the process of receiving donations and generating tax receipts, so nonprofit staff can spend valuable time on other efforts.
  • Is becoming increasingly secure. As the crypto market grows in value, the infrastructure for secure storage and policies for dispute resolution increase and solidify as well.

For more questions: FAQ – The Giving Block

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