Interest in donating cryptocurrency to charity has surged as investors realize the significant tax benefits and potential impact of their gifts. According to Kyle Casserino, a charitable planning consultant at Fidelity Charitable, crypto donations are becoming increasingly popular as people seek to maximize their tax breaks while supporting causes they care about.
Fidelity Charitable has seen a dramatic increase in crypto donations, with $688 million in crypto donations received by November 19, 2024. This is a huge jump from $49 million in 2023 and $38 million in 2022. Most of the donations have been in bitcoin, the most popular digital currency for charitable giving.
Tax experts, such as Andrew Gordon, recommend donating profitable assets like cryptocurrency instead of cash. Donors can avoid capital gains taxes by donating crypto they’ve held for over a year, while still claiming the full fair market value as a deduction. This strategy provides tax savings for both the donor and the charity.
As of January 2024, 56% of the top 100 U.S. charities accept crypto donations, reflecting the growing trend. With the price of bitcoin nearing all-time highs, crypto donations are expected to continue rising, offering a valuable tool for both donors and charities.
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