With how popular crypto has become, some of the world’s biggest nonprofit charitable organizations have begun accepting donations in cryptocurrency, from the Red Cross to the Rainforest Foundation. Ahead, we’ll go into detail about some of the biggest advantages of donating crypto, which charities accept it and some important tax benefits to be aware of.
Why donate crypto?
One of the crypto industry’s grandest ambitions is to create a more equitable financial world through the low-cost transfer of value across borders, helping lift the unbanked out of poverty and bring more people into the global economy. It’s in that same spirit of giving that has been seen charitable groups around the world helping those in need receive millions in crypto donations over the years.
Sure you can always donate with a credit or debit card, but there’s a compelling case to be made that donating crypto is a better choice on both sides of the transaction. According to Charity Navigator, nonprofits get hit with credit card processing fees anywhere from 2.2% to 7.5% of any donation received in that method. On a $500 donation, that means $37.50 eaten up in credit card fees alone. If made in Bitcoin instead, the very same donation would only carry a transaction fee of around $5 (based on an 1% transaction fee typical of BitPay transactions).. The less money an organization pays in fees, the more it has to support its mission.
Donating crypto is also an excellent way to keep your donation anonymous. A recent Give.org survey found that most Americans across age groups are concerned about their data privacy. Crypto’s private nature makes it an ideal method for donating to a charitable cause while keeping your identity private and secure.
Crypto donations are also tax-deductible to the fullest extent allowed by law, which means you can benefit from a tax break while supporting your favorite charity. (More on this later.)
How to donate crypto
You’ll typically have three main ways to donate your cryptocurrency to a nonprofit or charitable organization:
- Donate to organizations that use a crypto payment processor like BitPay
- Donate crypto directly to an organization’s wallet using a P2P transaction
- Donate through a donor-advised fund
Donate through a payment processor like BitPay to donate crypto
Many organizations find it easier to enlist the help of a crypto payment processor to accept donations. A crypto payment processor like BitPay creates a wallet for the organization and oversees the transactions of the wallet. Once a donation is made in crypto, BitPay gives the nonprofit organization the donation in a cash equivalent payment. This is beneficial to nonprofits that want to accept crypto, but not deal with the process of setting up a wallet, cashing out crypto and price volatility. If you’d like to donate crypto, and your preferred organization uses a crypto payment processor like BitPay, the process will typically look like this:
- Choose your preferred cryptocurrency and the amount you wish to donate.
- Fill out your Donor information.
- Tap the “Donate with BitPay” button.
- A QR code invoice will be generated. Scan the QR code or input the wallet address into your crypto wallet to complete the transaction.
Make a P2P crypto donation to the organization’s wallet
If you know that your preferred nonprofit uses a “hands-on” approach to crypto donations, meaning they have their own crypto wallet, then you can send crypto like you would for any other wallet payment.
- Open the BitPay Wallet app (or your preferred crypto wallet).
- Choose the wallet/cryptocurrency you would like to use to fund your donation.
- Click “Send”.
- Enter the wallet address of the nonprofit organization (or scan the receiver’s QR code in-person).
- Enter the amount of cryptocurrency you want to donate.
- Confirm payment details and slide to send.
Donate crypto via donor-advised funds
For those who prefer a more institutional approach to crypto donations, legacy financial services providers like Vanguard and Fidelity offer what are known as donor-advised funds. Through these funds, which are themselves registered as 501(c)(3) public charities, donors contribute an amount of cryptocurrency they’ve held for at least a year. The fund liquidates the contributed crypto and deposits the proceeds into the donor-advised fund as cash. The donor can then recommend how the funds are to be invested and ultimately granted to a charitable organization.
Nonprofits that accept crypto donations
BitPay has more than a dozen partnerships with charities and nonprofits that accept direct crypto payments through the BitPay app. Consult the nonprofits section of our Merchant Directory for a complete list, but some of the charities that support direct crypto payments through BitPay include:
These options are just a few of the hundreds of global charities that accept crypto donations.
Is my crypto donation tax-deductible?
And it is! The IRS classifies crypto donations as property, which makes them fully tax deductible and exempt from capital gains tax. Selling your crypto before donating it usually means a capital gains tax hit of around 15-20%. Donating directly is considered a nontaxable event, allowing both you and the receiving charity to avoid this costly levy.
Which coins can I donate/accept?
Charities aren’t usually in the business of turning down donations, so virtually any coin you can name is probably accepted by one charitable group or another. BitPay supports charity giving with the following cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Dogecoin (DOGE), Shiba Inu (SHIB), Litecoin (LTC), XRP (XRP), ApeCoin (APE) , Dai (DAI), Binance USD (BUSD), USD Coin (USDC), Wrapped Bitcoin (WBTC), Pax Dollar (USDP), Gemini Dollar (GUSD) and Euro Coin (EUROC). The coins supported by each individual organization may vary.
I run a nonprofit/charity organization, how can we accept crypto donations?
Are you part of a nonprofit that wants to accept crypto? BitPay makes it easy to set up your organization to start taking crypto donations. You can begin by creating a business account on our website, or contact our sales team to get the process started.