What are the advantages of making donations in cryptocurrency?
Amongst the many reasons for donors to make cryptocurrency donations, three main advantages stand out: Cryptocurrency and NFT donations are tax-efficient for both the donor and the charity. Donors pay no capital gains tax, and nonprofits receive 100% of the donation tax-free. Nonprofit charities are exempt from paying capital gains tax when they sell assets, so the full value of the gift stays intact. Crypto donations to international nonprofits can be transmitted and tracked more easily. Nonprofits have flexibility in how to realize the gift value - they can convert to a currency-based asset type immediately to avoid potential volatility, or they could hold the funds ("HODL") as an investment in the form of an endowment to fully realize its value and impact over time, e.g., the Charity Water Trust. Tax-efficiency To illustrate the tax-efficiency of crypto donations, consider this example from Fidelity Charitable that shows a calculation of how much more of a donation is received from donated crypto versus if the donor had converted it to cash first.