One of the most exciting and impactful ways to use cryptocurrency is to donate it to charity.

By donating from your crypto investment, you can support causes that matter to you while also enjoying tax benefits, avoiding capital gains taxes, and increasing the value of your donation.

In this article, we will explain how to donate crypto to charity, what are the benefits of doing so, and which charities accept crypto donations.

How to Donate Crypto to Charity?

There are different ways to donate crypto to charity, depending on the type of crypto you have, the charity you want to support, and the method you prefer. Here are some of the most common ways to donate crypto:

Donate through a payment processor like BitPay

Some charities use a payment processor like BitPay to accept crypto donations. BitPay is a service that converts crypto into fiat currency (such as US dollars) at the time of donation and then transfers the funds to the charity’s bank account.

This way, the charity does not have to deal with the volatility or complexity of crypto and can receive donations in their preferred currency.

To donate through BitPay, you need to visit the charity’s website and look for the option to donate with crypto. You will then be redirected to a BitPay invoice page, where you can choose the type of crypto you want to donate (such as Bitcoin or Ethereum), enter the amount you want to give, and scan a QR code or copy a wallet address to complete the transaction from your own crypto wallet.

You will also receive a receipt for your donation from BitPay.

Some examples of charities that use BitPay are:

• The Electronic Frontier Foundation (EFF): An international digital rights non-profit that promotes online privacy and civil liberties.
• The Royal National Lifeboat Institution (RNLI): A UK-based charity that provides lifesaving services along the UK’s coastline.
• The Tor Project: A non-profit that develops and maintains the Tor network, a software that enables anonymous and censorship-resistant communication online.

Donate directly to an organization’s wallet using a P2P transaction

Another way to donate crypto is to send it directly from your own wallet to the charity’s wallet using a peer-to-peer (P2P) transaction.

This way, you avoid any intermediaries or fees, and ensure that 100% of your donation goes to the charity. However, this method requires that the charity has its own crypto wallet and is willing to accept and manage crypto donations.

To donate directly to an organization’s wallet, you need to find out their wallet address and the type of crypto they accept.

You can usually find this information on their website or social media accounts. You then need to enter their wallet address and the amount you want to donate in your own wallet app or software and confirm the transaction. You may also need to pay a small network fee depending on the type of crypto you use.

Some examples of charities that accept direct donations to their wallets are:

• UNICEF CryptoFund: A fund that receives, holds, and distributes cryptocurrency (Bitcoin and Ethereum) to support UNICEF’s work for children around the world.
• Rainforest Foundation: A foundation that works with indigenous communities to protect rainforests from deforestation and climate change.
• Save the Children: An organization that provides humanitarian aid and advocacy for children in need.

Donate through a donor-advised fund

A third way to donate crypto is to use a donor-advised fund (DAF).

A DAF is a charitable account that allows you to make donations of various assets (including crypto) and receive an immediate tax deduction. You can then advise how you want your funds distributed to different charities over time.

To donate through a DAF, you need to open an account with a DAF provider that accepts crypto donations. You then need to transfer your crypto assets to your DAF account and claim your tax deduction. You can then recommend grants from your DAF account to any eligible charity of your choice.

Some examples of DAF providers that accept crypto donations are:

• Fidelity Charitable: A DAF sponsor that accepts donations of Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
• The Giving Block: A service that helps donors and nonprofits with crypto giving and receiving. The Giving Block partners with several DAF sponsors, such as DonorTrust and Endaoment, to enable crypto donations through DAFs.
• CoinDesk Giving: A DAF platform that allows donors to donate crypto and other assets to support various causes and charities.

What Are the Benefits of Donating to Charity From Your Crypto Investment?

Donating crypto to charity has several benefits, both for you and for the charity. Here are some of the main benefits:

Tax benefits

One of the biggest benefits of donating crypto to charity is that you can reduce your tax liability.

In the US, crypto donations are treated as property donations, which means that you can deduct the fair market value of your donation from your income tax, up to 30% of your adjusted gross income.

You also avoid paying capital gains taxes on any appreciation of your crypto assets, which can be significant if you have held them for a long time or if they have increased in value rapidly.

For example, if you bought 1 Bitcoin for $10,000 in 2020 and donated it to charity in 2021 when it was worth $50,000, you could deduct $50,000 from your income tax and save $15,000 in taxes (assuming a 30% tax rate). You would also avoid paying $6,000 in capital gains taxes (assuming a 20% tax rate). In total, you would save $21,000 in taxes by donating your Bitcoin instead of selling it and donating cash.

However, to claim these tax benefits, you need to meet certain requirements.

For instance, you need to donate your crypto directly to a qualified charity (not through an exchange or a payment processor), you need to have held your crypto for more than a year (otherwise, you can only deduct your cost basis), and you need to obtain a written acknowledgment from the charity for donations over $250.

You should also consult a tax professional before making any crypto donations to ensure compliance with the tax laws.

Remember: Crypto tax laws vary from region to region.

Social impact

Another benefit of donating crypto to charity is that you can make a positive social impact with your donation. By supporting causes that align with your values and interests, you can help make a difference in the world and improve the lives of others. You can also inspire others to donate crypto and raise awareness about the potential of cryptocurrency for social good.

Moreover, by donating crypto, you can empower charities to leverage the advantages of cryptocurrency for their own operations and programs. For example, some charities use crypto to:

• Reduce transaction costs and increase efficiency when transferring funds across borders or to remote areas.
• Enhance transparency and accountability by using blockchain technology to track and verify the use of funds.
• Increase financial inclusion and access by reaching underserved populations that lack bank accounts or identification documents.
• Innovate and experiment with new solutions and models that leverage the features of crypto, such as smart contracts, decentralized applications, or tokenization.

Personal satisfaction

A final benefit of donating crypto to charity is that you can experience personal satisfaction and fulfillment from your donation.

Giving to charity can boost your happiness, well-being, and sense of purpose. It can also help you express your gratitude, generosity, and compassion.

By donating crypto, you can also enjoy the thrill of being part of cutting-edge technology that is transforming the world of finance and philanthropy.

Which Charities Accept Crypto Donations?

There are many charities that accept crypto donations, covering a wide range of causes and sectors. Some of them are well-known global organizations, while others are smaller or local initiatives. Here are some examples of charities that accept crypto donations:

• The Water Project: A charity that provides access to clean water and sanitation in sub-Saharan Africa.
• Code.org: A non-profit that promotes computer science education for students and teachers.
• Heifer International: An organization that fights hunger and poverty by providing livestock and training to farmers.
• Wikimedia Foundation: Anon-profit that operates Wikipedia and other free knowledge projects.
• Doctors Without Borders: An international medical humanitarian organization that provides emergency aid in conflict zones and disasters.
• Greenpeace: An environmental organization that campaigns for a green and peaceful future.
• American Red Cross: A humanitarian organization that provides disaster relief and emergency assistance.
• The Internet Archive: A digital library that preserves and provides access to historical and cultural content.
• GiveDirectly: A charity that transfers cash directly to people living in extreme poverty.
• Binance Charity: A foundation that supports various causes, such as education, health, and environmental protection, using blockchain and crypto.

These are just some of the many charities that accept crypto donations.

You can find more by searching online, visiting websites like The Giving Block or CoinDesk Giving, or asking your favorite charity if they accept crypto.

Conclusion

Donating crypto to charity is a great way to use your digital assets for good. You can enjoy tax benefits, make a social impact, and experience personal satisfaction by giving crypto to charity. You can also choose from different methods and charities to donate your crypto, depending on your preferences and goals.

If you are interested in donating crypto to charity, you should do some research, consult a tax professional, and find a reputable charity that accepts crypto. You should also keep records of your donations and transactions for tax purposes.

By following these steps, you can make the most of your crypto donations and support the causes you care about.

So that’s a wrap for today. If you liked this article then you should definitely check out the following resources:

• [A to Z]: The Ultimate Crypto Glossary
• Top 7 Crypto Wallets Ranked
• 5 Golden Rules of Investing in Crypto

Adios!