Another Option for End-of-Year Giving: Cryptocurrency
Bitcoin, Ethereum and many other cryptocurrencies have risen substantially over the past one to two years - and many investors have made large gains. With needs greater than ever this year, charities worldwide are hopeful that end-of-year giving will enable them to serve the world’s most vulnerable people. Donors can help charitable organizations reach those goals while saving money by donating Bitcoin and other Cryptocurrencies.
Bitcoin is a digital currency and was the first cryptocurrency to hit the public market in 2009. Like all cryptocurrencies, it’s a decentralized currency, not controlled by any authority, government, or financial institution. It can be transferred (or sent) from person to person, no matter where they are located in the world. As of June 2020, there are 2,677 cryptocurrencies in the market.
The S & P Dow Jones will launch a cryptocurrency index in 2021 measuring the performance of over 550 top traded crypto by market cap, including bitcoin, and they will use data from the New York-based company Lukka.
Thirty-five percent of millennials (those born 1981 and 1996, also known as Generation Y) purchased cryptocurrencies in 2019.
Powerful Tax Benefits
The United States’ Internal Revenue Service (IRS) has classified bitcoin as property, which means the tax advantages are similar to donating stock. There are advantages to both the donor and the nonprofit organizations.
Donating a cryptocurrency asset you have held for more than one year will make you eligible for a deduction equal to the asset’s fair market value at the date of the donation. If you have held the asset for one year or less, you will still be eligible for a deduction. However, it will be the lesser of the asset’s fair market value at the time of the donation and the asset’s cost basis.
Cryptocurrency donations enable the donor to take a tax deduction for the cryptocurrency value, avoiding the capital gains tax that would have paid if the cryptocurrency was sold before donating. Because Bitcoin donations are not taxable events for the donor or the nonprofit, it allows people to contribute 20-30 percent more, depending on their tax bracket.
That’s one of the reasons hundreds of millions of dollars worth of bitcoin donations have been donated to nonprofits over the past few years, particularly during bull markets. Contributing cryptocurrency in other countries, such as the United Kingdom, Canada, Australia, and New Zealand, also helps donors reduce their tax obligations while supporting organizations whose missions they care deeply about.
Donating Cryptocurrency is Quick, Easy, and Convenient
Sending cryptocurrency is simpler than punching in a credit card. TrustBridge Global donors can contribute cryptocurrency to a donor-advised fund (DAF) or directly to a Charity Fund.
TrustBridge Global Foundation is structured as a charity that sponsors a DAF program, and it shares the cost of operating the foundation among the DAFs equitably by assessing them based upon their proportionate balance or activity. All donations of major cryptocurrencies are charged a 1% assessment (subject to a CHF 1,000, or other currency equivalent minimum per transaction). Costs for donating more obscure coins or those less traded may be decided upon at the time of transaction.
Elevate Your End-of-Year Giving with Cryptocurrency
Your cryptocurrency gift can have a tremendous impact on the causes important to you.
As part of a global network of DAF providers, TrustBridge Global can ensure that funds are mobilised to where they are needed most. Find out how to maximize your philanthropic efforts to build a better future for all.