The Giving Block: The growth of crypto charity

In the 2024 annual report of The Giving Block, there is talk of crypto charity, also known as crypto-philanthropy. In particular, key data on donations in cryptocurrencies and winning strategies to engage donors in the non-profit sector are revealed.

Let’s see all the details below.

Summary

• The phenomenon of crypto charity: a rising trend
• Crypto donations: how and by whom they are made
• Effective strategies to maximize the impact of cryptocurrency donations

The phenomenon of crypto charity: a rising trend

According to the “The 2024 Annual Report on Crypto Philanthropy“, the increase in enthusiasm from non-profit organizations is evident, fueled by the growing user base of cryptocurrencies and the multiple reasons that drive people to become crypto donors.

Currently, it is estimated that there are 580 million cryptocurrency users worldwide, with a 34% increase compared to the beginning of 2023. This number exceeds the customer base of many leading brokerage firms.

According to data from authoritative sources such as Endaoment, Fidelity Charitable, Forbes, and the intelligence company Crystal Blockchain, cryptocurrency donations to charitable causes have exceeded 2 billion dollars.

Non-profit organizations that have prepared to accept cryptocurrency donations in 2024 are in a privileged position for success, supported by several factors.

Among these, there are powerful tax incentives, as the IRS has clarified that taxpayers in the United States are not required to pay taxes on the capital gains of donated cryptocurrencies, equating such donations to those of stocks.

The cryptocurrency market has experienced extraordinary growth in the last year, with a doubling of the amount of money in crypto.

Interest in traditional finance has further increased with the approval by the SEC of Bitcoin ETFs, allowing investors to gain exposure to cryptocurrencies directly through the stock market.

Furthermore, historical trends play a significant role, with the upcoming event Bitcoin halving, an important historical catalyst for the cryptocurrency bull market, scheduled for April 2024.

Crypto donations: how and by whom they are made

Today, an increasing number of charitable organizations are embracing the acceptance of cryptocurrency donations, a practice that is gaining ground year after year.

These entities include hospitals, healthcare organizations, places of worship, religious organizations, community foundations, higher education institutions and schools, along with Donor-Advised Fund platforms like Fidelity Charitable.

During this year, The Giving Block has collaborated with 1,767 non-profit organizations on its platform, registering 240 new entries. This represents the third consecutive year in which it has recorded the highest number of new clients.

The main charitable organizations continue to embrace fundraising in cryptocurrency, recognizing its potential.

From the latest cohort of Forbes’ Top 100 Charities, 56 now accept donations in cryptocurrency, showing a 12% increase compared to the previous year.

Among these, 67.8% (38 organizations) use The Giving Block as a cryptocurrency fundraising solution.

Farsighted fundraisers understand the multiple incentives that drive cryptocurrency investors to become donors, demonstrating resilience even in the face of recent market corrections.

With an increasing number of non-profit organizations not only accepting cryptocurrencies but actively promoting this donation option, an increase in donations is expected.

Especially from younger donors and those who make more substantial donations, occupying both categories.

Therefore, it is essential for non-profit organizations to offer the option of donating in cryptocurrency along with traditional options of donating funds and stocks, as cryptocurrency donors are also likely to use these types of accounts.

Effective strategies to maximize the impact of cryptocurrency donations

Charity presents itself as a powerful tool for the 580 million cryptocurrency investors worldwide, offering the opportunity to maximize generosity while reducing tax burden.

One key to optimizing this process is to consider the entire cryptocurrency portfolio.

Donations in cryptocurrency should not be limited to a single asset, such as BTC. In 2023, USDC was the most donated asset for the second consecutive year, followed by ETH, BTC, USDT, GALA, and SOL.

It is essential therefore to remember that by donating assets held for at least one year, it is possible to fully take advantage of the tax benefits of cryptocurrency donations.

Stock donations represent a well-established method of charity, but some donors may be accustomed to donating only cryptocurrencies or only stocks.

Investors with both types of assets should consider both options, donating what makes more sense in a given year.

Furthermore, asking a non-profit organization to accept cryptocurrencies could be a crucial step, especially for those who are more accustomed to talking about stock donations.

There have been numerous cases where a single donor has catalyzed highly successful cryptocurrency fundraising programs for organizations that initially had not considered this option.

While most traditional donors typically wait until December to make donations, those who use cryptocurrency donations should consider opportunities throughout the year to maximize tax benefits.

The benefits will vary depending on variables such as the activities in the portfolio, the timing, and the cost of acquiring such activities.

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