What do you need to know about donating to Cryptocurrency-friendly Charities? There are many charities where you are allowed to donate cryptocurrency, and nonprofits, too. They include:
- The Water Project
- Internet Archive
- Humanity Road
- Tor Project
- The Electronic Frontier Foundation
- Code to Inspire
- United Way
- Red Cross
Again, not all the entities in the list above are considered charities–some like the Electronic Frontier Foundation are nonprofits operating in service of a specific cause or concern.
On Donating To Cryptocurrency-Friendly Charities
The rules for donating cryptocurrency will vary depending on the country you are taxed in; Americans should know that since cryptocurrency is taxed as property and not as currency. That means you have a tax liability whether you sell or exchange Bitcoin, Ethereum, etc. Donating the currency can help offset certain tax liabilities but you will need to consult a tax professional about the current year’s tax laws as they change frequently.
If you find that you bought cryptocurrency earlier and its value has dramatically shot up in a short period of time, your tax liabilities will be different–and likely steeper–than for cryptocurrency you have held for more than one year. This is the reason some choose to donate to concerns like those listed above. Again, always consult a tax professional about the current year’s tax laws as they apply to digital currency or crypto assets.
PayPal’s entry into the cryptocurrency arena has big implications for the ability to donate cryptocurrency to charity. While not all Cryptocurrency-Friendly Charities may rush to PayPal to use it as a way to accept Bitcoin and other currencies, the accessibility and user-friendliness of PayPay is likely to be an incentive for many. Add to that PayPal’s customer protections and you have a scenario where the conferred trust of PayPal makes using that platform more attractive to those in the cryptocurrency business.
If you want to donate cryptocurrency to charity, consider taking the advice of Certified Financial Planner Darla Mercado, who wrote in a CNBC article about donating crypto that a donor-advised fund may be the best way to go. She writes, “Volatility and data security are chief concerns for charities, and not all of them are equipped to take direct donations of crypto assets. A donor-advised fund can receive the gift, convert it and allow you to make grants to your favorite charities.”
Joe Wallace is a writer and editor from Illinois. He was an editor and producer for Air Force Television News for 13 years, and has served as Managing Editor for publications including Gearwire.com, and Associate Editor for FHANewsBlog.com. He is also an experienced book and script editor specializing in non-fiction and documentary filmmaking