Support Your Favorite Charities And Promote Crypto This #BitcoinTuesday
The end of the year is rapidly approaching and we’ve already hit new Bitcoin all-time highs! The appreciation of cryptocurrency prices and seasonal giving traditions raise the likelihood of seeing a spike in cryptocurrency donations to nonprofit and charity organizations.
In an attempt to capture and further amplify this charitable potential energy, Bitcoin Tuesday aims to be an annual day of giving and a counterpart to the famous Giving Tuesday movement.
Today, Bitcoin Tuesday kicks off a month long end of year campaign called #BagSeason which looks to unite the cryptocurrency community in donating to a variety of causes including the American Cancer Society, Save the Children, and International Medical Corps.
Why Donate to Nonprofits in Crypto?
For cryptocurrency holders looking to make a charitable donation, there is reason to make the donation directly in crypto rather than fiat currency. In addition to simply promoting its adoption, making a donation directly in crypto can have tax benefits for the donor.
Jack Dorsey donated $1 billion worth of Square stock instead of cash, and there is a good reason for that. Whenever an individual has a low cost-basis relative to the current market price of a given asset, selling that asset can cause them to incur a massive capital gains tax. With Bitcoin being the best performing asset over the past 5 to 10 years, many investors have an extremely low cost-basis and must seriously consider their taxes before taking profits. At the time of writing, 99% of Bitcoin owners are in profit. That means that 99% of Bitcoin holders have a more tax efficient way to donate to their favorite causes.
The IRS treats virtual currency as property. So, at least in the United States, donations in Bitcoin or other cryptocurrencies can be tax deductible. This means that holders can donate their crypto without having to sell it first and incur capital gains tax, meaning a 20-30% larger donation and deduction. For many donors, the question becomes: “Would I rather donate to the IRS or give more to my favorite cause?”
In late 2017, when Bitcoin was last at these levels, we saw a massive spike in donations from the community. This included the creation of a >5000 BTC charitable fund by a single donor which was announced on reddit and called “The Pineapple Fund.” Nonprofits receiving donations had to learn on the fly about this nascent technology and make decisions about how they would store, exchange, and report the donations.
Following this wave of Bitcoin donations, Alex Wilson and Pat Duffy founded The Giving Block (TGB), an organization dedicated to making it easy to accept bitcoin and other cryptocurrency donations. Through TGB, individuals can easily send donations to the 100+ nonprofits they have integrated and automatically receive a tax receipt after making a donation. Since founding, The Giving Block has helped raise millions of dollars worth of cryptocurrency donations for these organizations.
“It’s a win-win” says Alex – TGB makes it easy for these nonprofits to accept donations from this tech savvy, young, and increasingly wealthy demographic, and simultaneously offers donors a more tax efficient way to support their favorite causes.
There is a symbiotic relationship between philanthropy and cryptocurrencies beyond personal finance. A broad goal within the “crypto community” is to use the new technology to promote economic inclusion and to reduce governmental and corporate corruption. The Giving Block and the nonprofits they work with provide an alternative mechanism for those excluded from the global financial system to participate in causes important to them. By donating cryptocurrency to these nonprofits, you too have a stake in promoting this inclusion.
Giving Tuesday is the global giving movement that raised over $400 million in 24 hours last year. The Giving Block has created the equivalent of Giving Tuesday for the crypto community, #BitcoinTuesday. This will be a campaign run in parallel that brings together crypto-friendly nonprofits with crypto donors and companies to help raise money for worthy causes before year end. Bitcoin Tuesday kicks off a month long push to raise crypto donations as part of #BagSeason (Bitcoin Annual Gift).
“With just four weeks left until year end, many donors will be asking themselves how to offset their capital gains taxes. Many will likely choose their favorite crypto-friendly cause rather than the IRS.” – Alex Wilson of The Giving Block
If you would like to give back, further crypto adoption, and do so in a tax-advantaged way, you can check out the campaign here.
Disclaimer: Nick is the Director of Research and Development at Inca Digital. Inca is a sponsor of the 501(c)(3) blockchain incubator Blockshop, which The Giving Block is a fellow resident of.