How to accept crypto donations (updated for 2022) (2024)

FAQs

How do I accept cryptocurrency donations? ›

To do this, you can sign up for a payment processor that will automatically convert crypto into cash for you. However, a more efficient option is to send your donors to Crypto for Charity, which will allow them to direct a gift to your organization and receive a tax receipt while you receive the funds in cash.

If you donated cryptocurrency worth $5,000 or less, you can report it on Schedule A of your Form 1040 tax return. If you donated cryptocurrency worth more than $5,000, you will need to complete and file Form 8283, Noncash Charitable Contributions, in addition to Schedule A.

What Is Proof-of-Donation? Proof-of-donation refers to the integration of charitable donations into the functionality of a blockchain. Typically, this describes a redirection of funds, set by a smart contract and triggered upon each transaction, toward a charitable destination.

Transferring digital assets through an exchange is the simplest method. If you don't already have crypto to give, you can purchase it through a crypto exchange. Your recipient will also need to have an account to receive the funds.

Yes, there are several benefits. Crypto donations are treated as non-cash gifts, similar to stock gifts. This means donors avoid the taxes of a liquidation event (for example, selling an asset for cash to donate), and nonprofits can accept the donation in its non-cash form.

The number of nonprofits accepting crypto donations on The Giving Block grew from about 100 to more than 1,000 organizations in the past year. December also is typically the biggest month for most any nonprofit fundraising and The Giving Block aimed to raise $50 million via #CryptoGivingTuesday.

Where to ask for crypto donations? ›

The Giving Block is the #1 crypto donation solution, which provides an ecosystem for nonprofits and charities to fundraise Bitcoin and other cryptocurrencies, be found by crypto donors, receive funds instantly, and become part of a network of crypto media partners to support their missions.

Charities should stipulate in their policy on donations whether they accept donations of cryptoassets and how these are dealt with. It warned charities of the risks associated with cryptoassets such as the volatility of their value and the lack of protection compared with traditional currencies or financial products.

Not reporting your cryptocurrency on your taxes can lead to fines, audits, and other penalties. If you haven't reported your cryptocurrency in the past, you can file an amended tax return.

If you're receiving crypto as payment for goods or services or through an airdrop, the amount you received will be taxed at ordinary income tax rates. If you're disposing of your crypto, the net gain or loss amount will be taxed as capital gains.

Is a crypto donation a taxable event? No, a crypto donation to a 501(c)(3) nonprofit is generally not considered a taxable event. This means that when you make a donation in cryptocurrency, you typically do not have to pay capital gains tax on the amount donated.

How Do Cryptocurrency Donors Benefit? Cryptocurrency donations to 501(c)3 nonprofits are considered tax-deductible and do not trigger a taxable event, meaning you do not usually have to pay capital gains tax. For US donors, you should report your donation to the IRS to realize these tax benefits.

Anyone can create websites and social media posts requesting that you donate with cryptocurrency. If someone got in touch out of the blue to ask for money, even a donation, it might be a scam.