Here’s how to make virtual currency part of your charitable giving plan.
You’ve probably heard of cryptocurrency, but might not have been aware that you could use this virtual currency to make a charitable gift to the causes you care about.
As cryptocurrency, also known as crypto, gains popularity, more and more businesses are beginning to accept it as a method of payment. There are many forms of crypto, and among the most widely used are Bitcoin, Ethereum and Tether. Over the past few years, many people have fully embraced it as an investment and have even made it a part of their asset base and charitable contributions.
Unfortunately, many nonprofits are not equipped to accept gifts of cryptocurrency. While many platforms exist to help with these transactions, smaller organizations often struggle exchanging crypto for cash and tackling the transactional burden.
How to Donate Cryptocurrency
The Saint Paul & Minnesota Foundation regularly accepts cryptocurrency donations and liquidates them tax-free. The proceeds can then be placed into a donor advised fund created by the donor, allowing you to recommend grants to any nonprofit.
Cindy is a successful software developer, and acquired a considerable amount of cryptocurrency through mining and as compensation for developing software for start-up tech companies.
After doing some research on how to donate cryptocurrency to nonprofits and causes she cares about, she contacted one of our gift planners to talk about how a gift of virtual currency could work for her. With their help, she was able to open a donor advised fund using her crypto. This efficient process made it easy for Cindy to support all of her favorite causes, including scholarships at her alma mater.
Gifts of cryptocurrency can provide financial benefits to you as well. You may claim an income tax charitable deduction for the donated cryptocurrency. The value must be determined by a qualified appraisal. There are only a few appraisers who provide this service. At the Foundation, we can work with you and your advisors to refer experienced appraisers of cryptocurrency.
To learn more about how you can donate non-cash assets such as cryptocurrency, contact one of our gift planners to discuss your giving options. Our staff will work with you and your advisors to help determine what assets may be the most beneficial for you to give.
The Saint Paul & Minnesota Foundation does not provide tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors regarding your individual situation before engaging in any transaction.
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