Donating with cryptocurrency

Donating crypto directly to charity can save you money on two types of taxes:

1. Avoid paying any capital gains tax on your crypto gains.  
2. Receive a federal income tax deduction for the full value of your crypto (state and local income tax deductions may also be available).

An alternative is to sell your crypto and donate the cash proceeds, but you would first owe capital gains tax on the appreciation, resulting in higher taxes for you and less dollars going to furthering the mission of the charity.

See our guide on Tax Deductions for Crypto Donations.

Your donation goes to our 501(c)(3) tax-exempt charity, FreeWill Impact Fund — that's where your tax receipt will come from. Then, your crypto gift will be liquidated and the net proceeds will be sent in USD to the charity of your choice.

The value of your donation will be indicated in the tax receipt, and will correspond to the exchange rate at the moment we converted your gift to USD (usually within 10 minutes after receiving your gift).

You can recommend that a grant be made to more than 55,000 501(c)(3) nonprofit organizations based in the United States using our tool. All crypto donations made through the platform initially go to our 501(c)(3) charity, FreeWill Impact Fund, which will make a grant to the charity you designate (subject to our grantmaking policies). If your nonprofit is not on the list, let us know!

Absolutely. You just need to do it one at a time.

Most charities don't have the technical capacity to accept crypto (yet). You could convert your crypto to USD and make a donation, but you would have to pay capital gains tax first.

You will have to cover blockchain transaction fees.

Crypto for Charity typically sends gift proceeds to nonprofit organizations within two weeks of the gift's initial receipt. Sometimes, however, this may not be possible. For example, the organization's mailing address may have changed, or the organization does not claim the check we've sent them. Other times, a nonprofit organization may have lost its tax-exempt status, which prevents Crypto for Charity from distributing funds to it. In these cases, we will work to resolve these complications for up to 12 months from the date of the original donation. If our efforts are ultimately unsuccessful, Crypto for Charity will redirect the gift proceeds to a nonprofit organization that our team finds impactful (currently it's GiveWell's Maximum Impact Fund).

A cause fund is a collection of nonprofits with a shared mission or area of focus. Recommending the distribution of your crypto gift's proceeds to a cause fund is an excellent option for those who want to donate more broadly to a cause. Grants directed to a cause fund will be distributed equally among the included organizations.

The total amount collected for each fund will be evenly distributed across the nonprofits within that fund once a month. Occasionally, Crypto for Charity may add or remove nonprofits from a fund. Only organizations listed at the time of donation will receive a distribution from the proceeds of that donation - regardless of changes to the fund made afterward.

The Crypto for Charity team selects which 501(c)(3) nonprofits are in each cause fund by examining their values and mission to ensure alignment with the area of focus. We limit the number of nonprofits in each cause fund in order to maximize the impact of every donation.

Crypto for Charity values your privacy and will never share your personal information without your permission. If you choose to share your information, you may be contacted by the nonprofits, as they often like to thank donors personally.

Cryptocurrencies, or crypto, are digital forms of money that can be used to buy goods and services, or held onto as a long-term investment (like a stock). They are typically intended to eliminate the need for banks and middlemen because they're "decentralized." This means that no single entity controls the supply of the cryptocurrency. Instead, decentralized cryptocurrencies commonly use a distributed ledger (a "blockchain") managed by a peer-to-peer network that works together to record and validate transactions. You can learn more about crypto and what it means for philanthropy here.

Many cryptocurrencies are highly volatile assets, and can appreciate quickly. When they are sold and converted back into dollars or other fiat currency, income taxes may be owed on any gains. Such taxes, however, can be avoided, if appreciated crypto is donated to charity, rather than converted back into regular currency. For owners who have seen their crypto grow dramatically in value, the tax benefits of donating part of their windfall to charity are substantial, helping them avoid capital gains taxes and maximize the impact of their charitable giving. Such donors may also be able to receive federal income tax deductions, up to the full value of the gift, if they have held their crypto for more than a year.

Owners of cryptocurrency tend to be younger and more urban, and represent an opportunity to court active donors in their 20s and 30s who may not have been on your major giving radar in the past. Research suggests that they are more charitable than other types of investors.

If your organization isn't set up to accept crypto donations and doesn't know how to get started, you're not alone. More than 90% of nonprofits don't currently have a crypto solution. While they know there is growing interest in crypto giving, nonprofits lack the technical expertise and exchange accounts they need to accept most (or any) crypto donations, and their staff may need training to feel confident in even discussing the topic with donors. And many of the nonprofits who are positioned to encourage and accept cryptocurrency donations nevertheless lack the knowledge to manage their holdings of these relatively volatile assets.  

Crypto for Charity's solution overcomes these common hurdles, allowing nonprofits to benefit from crypto donations without having to establish an exchange account, or provide educational resources and training for their personnel. Crypto for Charity also mitigates market and volatility risk by liquidating donated crypto assets immediately. Nonprofits instead simply receive the proceeds of crypto donations in cash, while their donors automatically receive an emailed tax receipt from our public nonprofit, FreeWill Impact Fund.

You may have heard that crypto mining uses a lot of energy, as miners set up large server farms dedicated to validating transactions posted to the blockchain in order to potentially mine new cryptocurrency tokens as a reward. We understand that this is a concern for many nonprofits, while we also recognize the value and innovation in this new industry, as well as its potential to generate substantial new sources of donations to charity. We're closely following research and the efforts being made to shut down outdated farms and focus on renewable energy sources. Additionally, many cryptocurrencies, like Cardano, Solana, Algorand and Tezos use a substantially more energy-efficient method of verifying their transactions, called proof of stake.

Ethereum, the second-largest crypto after Bitcoin, is also in the process of switching to a proof-of-stake consensus mechanism, which is likely to happen in late 2022.

Cryptocurrency assets donated through the Crypto for Charity platform are initially received by our nonprofit, FreeWill Impact Fund, which maintains a cryptocurrency exchange account and wallet.

FreeWill Impact Fund provides donors with a tax receipt for their donation, liquidates the donated cryptocurrency, and passes the net cash proceeds on to the ultimate nonprofit beneficiary organization (subject to our grantmaking policies and procedures)

That's up to you! If donors reach out to you asking if they can make a crypto donation, send them to cryptoforcharity.io and ask them to select your nonprofit. You can also feel free to incorporate the link into your website, wherever you list giving options. We're working on bringing you more ways to integrate crypto into your major giving strategy.

Of course!

Suggested email or website copy:

Thanks so much for your interest in donating cryptocurrency to {our organization}. You can direct your gift through cryptoforcharity.io, which will allow you to make a tax-deductible gift of crypto that is converted to USD and sent to us so we can put your gift to work toward our mission.

Suggested language for Twitter:

We now accept donations of Bitcoin and other cryptocurrencies!

Donations of appreciated crypto don't trigger capital gains taxes, and may be tax-deductible for the full value.

1. Go to cryptoforcharity.io

2. Pick {organization} from the list

3. Donate crypto and get a tax receipt

We currently accept donations on behalf of the largest 55,000 US nonprofits listed in Guidestar. If your nonprofit is not listed, but you would like to be included in our database, please reach out to us here.

Likewise, if for any reason, your nonprofit does not want to receive cash liquidated from crypto donations, please just let us know. We'll remove your name from our database. You can reach out to us here.

No. To ensure that gift receipts provided by FreeWill Impact Fund accurately reflect the deductible value of their charitable contributions, Crypto for Charity partners may not provide donors with thank you gifts of valuable goods or service.

Crypto for Charity is brought to you by the same team that developed FreeWill. In the same way FreeWill allows anyone to leave a bequest to their favorite charity while creating a will, we wanted to create a public site that would allow donors to easily donate their crypto to the nonprofit of their choice.

Our 501(c)(3) tax-exempt public charity, FreeWill Impact Fund, receives crypto donations and grants the net proceeds to nonprofit organizations.

You can contact us here.