The charitable giving landscape is transforming rapidly, and digital assets like cryptocurrencies and non-fungible tokens (NFTs) are at the forefront of the evolution. Here are key takeaways from GlobalGiving and our partner Endaoment.
As cryptocurrency and NFT use continues to grow, so does the trend of digital asset donations. According to The Giving Block’s 2023 Annual Report, a variety of donors, ranging from digitally native millennials to established entrepreneurs, came together to donate more than $100 million in digital assets to nonprofit organizations in 2022. Donation platforms like Endaoment and The Giving Block made these gifts possible. If trends continue, total donations are expected to surpass $1 billion in the next decade.
Here are three benefits of digital assets that make them promising for people who want to give to causes they care about:
Digital assets have risen in popularity partially due to the possibility of a borderless and more equitable future. While there is certainly debate about how close we are to such a future, the prospect has been enough to entice an extremely global set of users.
According to DataReportal’s 2022 Global Overview of the digital landscape, more than 10% of all internet users hold some form of cryptocurrency in countries as diverse as Thailand (20.1% of its internet-using population holds cryptocurrency), Nigeria (19.4%), and Turkey (18.5%).
These users are finding new paths to wealth and are trailblazing methods to share that wealth. And as donations of digital assets grow, it will be critical to ensure community-led nonprofits around the world don’t get left out simply because they don’t have the resources to research and navigate this new space.
See how you can make cryptocurrency donations to nonprofits.
Crypto-derived donations also offer substantial tax benefits, reducing taxable income and potentially eliminating capital gains. As Coindesk notes in their Crypto Philanthropy 101, “Similar to cash, donations made via cryptocurrencies are tax-deductible. In addition, donating a portion of digital assets as charitable gifts can help profitable crypto investors avoid the capital gains taxes they would otherwise incur if they were to convert the crypto to US dollars (USD) and donate the equivalent amount in cash.”
One of the most accessible ways for donors with digital assets to leverage them in support of nonprofits is to work with donor-advised funds (DAFs) that can facilitate instant conversion of digital assets to cash. Through platforms like Endaoment, modern DAFs prioritize efficiency and transparency. That’s demonstrated by a grant payout rate—or a comparison between what DAF owners granted to charities and the assets they had available to grant—that’s significantly higher than the industry average.
And since each donation transaction is publicly verifiable on the blockchain, donors of digital assets are given total assurance of their contributions. This combination of improved financial efficiency, transparency, and adaptability makes donating on-chain an appealing option for today’s philanthropists, bridging the gap between traditional and digital giving.
See how you can make cryptocurrency donations to nonprofits.
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