Cryptocurrency donations for charity are on the rise, with gifts still rolling in as the calendar winds down. Digital asset donation witnessed a 583% increase in 2021 compared to 2020. For instance, On ‘Crypto Giving Tuesday’ 2021, Washington D.C.-based, The Giving Block processed $2.4 million in gifts, with an average donation of $12,600. Over the course of the day, donors gave more than $2.4M in crypto to nonprofits.
Why so generous?
Cryptocurrency is property in the eyes of the IRS (Internal Revenue Service). This implies that it’s subjected to capital gains taxes if sold or exchanged at a profit. The length of ownership may affect rates. For instance, if you hold digital currency for over a year, it may qualify for long-term capital gains rates of 0%, 15% or 20%, depending on profit from the sale.
However, one may bypass taxes on profits by donating cryptocurrency to charity. Those who itemize deductions may qualify for a write-off. As mentioned on the Give2Asia website,
“For US donors, donating cryptocurrency offers a way to support your favorite overseas charity while having the full amount of your gift qualify as a charitable contribution for federal tax purposes.”
Donors would be subject to that tax if they convert the virtual currency into cash before giving it away. This means less money could go to their selected charity. Another bonus is an income tax deduction. Nonetheless, investors reported difficulty finding organizations that accepted the virtual currencies, which could be volatile for charities to hold.
Here’s a list
🚨 Breaking news🚨
Through a partnership w/ @TheGivingBlock, Susan G. Komen now accepts #cryptocurrency as a form of donation. You can donate #Bitcoin, #Ethereum and more. This will give us more ways to fight #breastcancer and save lives.
Donate today 👉 https://t.co/gvWgHlmzDd pic.twitter.com/bxhZOy23ec
— Susan G. Komen (@SusanGKomen) December 26, 2021
This donation pool has quite a diverse variety of options to choose from for donations, including Bitcoin, Ethereum, Dai, Dogecoin, Aave, Axie Infinity, 1inch, Chainlink, Decentraland, Gala, Fantom, Enjin Coin and so many more.
The organization aims to provide health awareness, education, and fund research into breast cancer. Its investment in research has topped $1.1 billion since 1982.
Many large charities and international aid agencies, such as The Red Cross Foundation and Save the Children, and many more have set up mechanisms to accept cryptocurrencies as well. This might just mark the beginning of a change in the way people donate to charitable trusts.