As cryptocurrency wealth rises, charities accept more Bitcoin donations
As the biggest cryptocurrencies flirt with record high values, they're increasingly becoming bigger sources of revenue for charities. However, the number of charities accepting the virtual currencies, known for their volatility, remains limited.
So far this year, Fidelity Charitable, the nation’s largest grantmaker, has received more than $274 million in cryptocurrency contributions — nearly quadruple its prior record of $69 million in 2019, according to a company spokesperson. And the cryptocurrency donation platform Engiven said last month it accepted what it called the largest single Bitcoin donation known to date: a $10 million Bitcoin gift to an undisclosed faith-based organization.
The global humanitarian organization Action Against Hunger started accepting cryptocurrency donations last year after a group of donors approached them about taking the assets, said Aron Flasher, who manages corporate partnerships for the organization. Since then, he says they’ve raised more than $1 million from virtual currencies.
Cryptocurrencies are an attractive asset to donate because they allow donors to bypass the capital gains tax. Donors would be subject to that tax if they convert the virtual currency into cash before giving it away, which means less money could go to their selected charity. Another bonus is an income tax deduction.
The volatility in the crypto world is the reason why some giving platforms and donor-advised fund sponsors, like Fidelity Charitable, convert them into cash right away. Pat Duffy, the co-founder of the popular cryptocurrency donation platform The Giving Block, said though it's rare, some nonprofits who use the platform choose to hold the assets.
“By most estimates, there’s less than a few thousand that accept crypto,” he said. “There’s a lot of room for growth.”
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