How to Donate Crypto and Why Everyone Should Do It

If you want to learn how to donate crypto and how to accept crypto donations, you’ve come to the right place. First, you’ll learn how to make a donation to a charity using cryptocurrencies and what are the tax advantages of donating crypto. Secondly, you’ll learn how to receive donations in cryptocurrencies. And finally, you’ll find out whether cryptocurrency donations are better than fiat donations for organizations. We’ll also list and review the most notable crypto donation platforms.

How to Donate Crypto to Charity

Bitcoin donations have become a popular choice among individuals and organizations. Statistics show us that more than $2 billion has been donated to charities in the form of cryptocurrencies since 2018.

That said, here’s how to donate crypto to a charity in a few easy steps:

Pick a charity you wish to support and make sure that it accepts cryptocurrencies.
Next, you need to choose which cryptocurrency to use to make a donation. Most charities accept the most popular cryptocurrencies, such as BTC, ETH, and SOL, stablecoins, like USDT and DAI, and meme coins, like DOGE and SHIB.
Enter your personal information or make an anonymous donation.
Connect your wallet and tap the –Crypto Donate- button.
Once the QR code appears, complete your donation.
Make sure to save your receipt for tax relief.

How to Accept Donations in Crypto

If you want to receive free Bitcoin donations for your nonprofit organization, you’ll need to do the following:

Add cryptocurrencies as a donation option on your website. You can add this option on your main page, in the “Ways to Give” section, or on the crypto-specific landing page.
Request donor information so you can thank your donors for their crypto gifts. (optional)
Create a crypto donation liquidation policy that notes that crypto donations are non-refundable. You can also use tools that will automatically convert crypto into cash.
Comply with IRS regulations. If you receive a crypto donation worth over $5,000, you must sign Form 8283 and send it to the donor.

Are Crypto Donations Better Than Fiat for Organizations?

Now that you know how to donate crypto to a charity, let’s discuss why organizations prefer crypto over fiat donations. First of all, cryptocurrency donations foster trust between charities and donors. Why? Because donors will be able to track their contributions to make sure they’re being used properly.

Secondly, crypto transactions don’t involve third parties like banks. This enables philanthropic organizations to reach a wider audience. Moreover, statistics show us that crypto donors tend to contribute more than fiat donors.

And finally, crypto transactions are faster than fiat transactions. This is especially important for organizations that require immediate funding. Other cryptocurrency benefits include:

lower counterparty risks
lower inflation risks
lower fees
safer transactions

Can You Donate Cryptocurrency Anonymously?

Yes, you can donate cryptocurrencies anonymously. Namely, all crypto transactions are anonymous, even though they are recorded on a public blockchain. This means that everyone will be able to view them, however, in the form of wallet addresses, not sender names. In fact, most charities and nonprofit organizations allow anonymous donations. The only thing you’ll have to do is leave your email address to receive a tax receipt.

To make an anonymous donation, you must check the Donate Anonymously box when filling out the donation form. Once you do that, select the crypto you wish to donate and enter the preferred amount. You’ll then receive a dynamic wallet address that you’ll use to send your donation.

Tax Advantages of Donating Crypto

The IRS classifies digital assets as property. This means that cryptocurrency donations will be treated as a non-taxable event. In other words, you won’t owe crypto capital gains tax on appreciated assets. However, this only applies if you hold your coins for at least one year and then donate them to a charity with a 501(c)(3) status.

You can also donate digital assets that are currently trading at a loss since they qualify for tax-loss harvesting. Keep in mind that the donation deduction will be limited to 30% of your AGI (adjusted gross income).

To report your cryptocurrency donations, you’ll have to fill out Form 1040 Schedule A. Make sure to note which digital assets you used as a donation and their fair market value at the time of the donation. If you don’t want to do it yourself, some of the top crypto tax software is a handy alternative.

Where Can You Donate Cryptocurrency?

You can donate your digital assets via philanthropic DAOs and crypto donation platforms, such as The Giving Block, Crypto for Charity, and Endaoment.

The Giving Block is a crypto donation platform for nonprofit organizations and individuals who want to make a crypto donation. The platform accepts 200+ cryptocurrencies and can be integrated with 5,000+ CRMs and tools. The Giving Block raised $200 million in cryptocurrency donations, and its user base is 580 million members.

Crypto for Charity supports over 55,000 501(c)(3) nonprofit organizations. All donations go to the FreeWill Impact Fund, after which they are converted to USD. This enables nonprofits to receive donations without using a wallet or exchange account. FreeWill is partnered with more than 1,150 nonprofits, and it raised over $7.5 billion since 2017. Crypto for Charity uses a no-fee model. Donations can be made in 100+ cryptocurrencies, NFTs, and NFT drops.

Endaoment is a public charity that offers direct donations and DAFs (Donor-Advised Funds) to nonprofit organizations. This platform accepts 1,000+ cryptocurrencies and supports 1.8 million qualified 501(c)(3) US nonprofits. The minimum donation requirement for DAFs is $500. Endaoment DAFs also use Uniswap to liquidate donations. When it comes to fees, the platform charges 1.0% for outbound and 0.5% for inbound donations.

Conclusion

How to donate crypto? Choose a charity you wish to support, select the crypto you wish to use as a donation and connect your wallet to complete the donation. You can make a public or anonymous donation. Whichever option you choose, you’ll have to leave your email address to receive a tax receipt.

The IRS classifies cryptocurrency donations as property, which means they are not subject to capital gains taxes. The most popular crypto donation platforms include The Giving Block, Crypto for Charity, and Endaoment.