Stuart C. Bear, attorney, is a partner, shareholder and president of Chestnut Cambronne. We recently sat down with Stuart and asked him some questions about end-of-year giving and working with the Foundations to identify and achieve his clients’ charitable goals.
Broadening philanthropic expression through cryptocurrency
When Dave Wahlstedt reached out to our philanthropic advisors about giving in bitcoin, he knew he was going to the right place. His father had been giving through a donor advised fund with the Saint Paul & Minnesota Foundations for nearly two decades, and he had experienced the value and creativity that our staff brought to the table.
“Being able to donate appreciated assets like private company stock is incredibly valuable,” said Wahlstedt. “When you don’t have to pay capital gains tax, you’re able to give all of the value of that asset and not just a fraction of it.”
Because of this, he knew donating his bitcoin through his father’s fund would allow for the greatest impact. For us, it was an exciting opportunity to be accepting a donation in cryptocurrency.
Bitcoin is an online, decentralized peer-to-peer payment network. It is the first-ever implementation of the concept of cryptocurrency – a form of money that uses cryptography to control both its creation and its transactions as opposed to a central authority. There are other forms of cryptocurrency as well, including Litecoin, Ethereum, and Zcash. Bitcoin specifically has seen a fair amount of success and has greatly appreciated in value since the network was first created in 2009.
“Being responsive to donor interests and creating more avenues for donors to give back has always been our focus,” said Jeremy Wells, vice president of Philanthropic Services at the Foundations. “Dave’s request was one we were eager to fulfill, both for him and for future donors.”
To see Dave’s donation through, we began educating ourselves on the underlying technology and various types of cryptocurrencies, evaluating any risk, characteristics and platforms needed to accept and liquidate the gifts. We spoke with individual investors, peers, and an expert at the Minnesota Federal Reserve.
“We initially did a test transaction to make sure we felt secure in protecting the donor as well as the Foundations as we began to accept these gifts,” said Christine Searson, vice president of Finance at the Foundations. “Our goal was to make sure we could accept donor gifts safely and efficiently at a low cost as we converted their gift to cash and transferred it to their donor advised funds for grantmaking.”
After testing, setting up the account, and sorting out any necessary details, Dave was able to officially donate in bitcoin – in turn, creating the ability for all donors working with us at the Foundations to do the same.
“I certainly recommend others to consider giving in the same way,” said Wahlstedt. “It’s a great way to do charitable giving, and the Foundations were friendly, helpful and open minded.”