Interest in donating cryptocurrency to charity is on the rise, with digital currency investors keen to maximize both their tax benefits and the impact of their contributions.
“A growing number of people are beginning to see the significant advantages of crypto donations,” commented Kyle Casserino, vice president and charitable planning consultant at Fidelity Charitable. This public charity facilitates donations of cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.
The recent surge in Bitcoin donations comes in the wake of its latest rally, as more investors become aware of the associated tax advantages, according to Casserino.
For insight into Fidelity Charitable’s operations in 2024, they have reported receiving $688 million in crypto donations by November 19. This figure far surpasses the $49 million from the entirety of 2023 and the $38 million in 2022, based on their 2024 giving report.
To put things in perspective, since it began accepting these assets in 2015, Fidelity Charitable had accumulated over $565 million in donations by December 31, 2023. “Bitcoin accounts for the majority of our donation volume in both quantity and dollar value,” Casserino explained.
While DAFgiving360, previously known as Schwab Charitable, does not disclose exact figures for crypto donations, the organization noted that 63% of contributions in fiscal year 2024 were non-cash assets, such as cryptocurrencies and stocks.
Moreover, about 56% of the top 100 charities in the U.S. were accepting crypto donations by January 2024, according to The Giving Block, a platform dedicated to digital currency gifts and fundraising.
### Donating Profitable Crypto: A Wise Approach
Despite most taxpayers opting for the standard deduction, which precludes itemizing charitable gifts, some might still benefit from these donations. For those who can itemize and claim the charitable deduction, donating appreciated assets like cryptocurrency or stocks proves more advantageous than cash, explains Andrew Gordon. Gordon, a tax attorney and certified public accountant, also serves as president of the Gordon Law Group.
Gifting appreciated investments helps donors avoid capital gains taxes, providing savings to both the donor and the charity. Typically, you can deduct the fair market value of an asset if it’s been owned for over a year. Public charities allow these deductions up to 30% of your adjusted gross income.
Gordon emphasized, “This is a smart strategy, especially with the current highs in crypto and Bitcoin. It’s an approach we’re recommending more frequently.”
At the start of December, Bitcoin’s price roughly hit $95,000, showing a nearly 120% increase since the start of the year, according to Coin Metrics. The market witnessed a post-election surge following President-elect Donald Trump’s promises of crypto-friendly policies during his campaign.
