How to Donate Crypto to Charity Without Losing Tax Benefits

How to Donate Crypto to Charity Without Losing Tax Benefits Cryptocurrency has become a powerful tool for charitable giving. From Bitcoin to Ethereum and beyond, donors are increasingly using digital assets to fund everything from humanitarian relief to scientific research.

When donated directly, cryptocurrency can offer tax advantages that traditional cash gifts can’t. In most cases, donors may bypass capital gains tax entirely and still claim a charitable deduction based on the asset’s fair market value.

As more organizations adopt crypto-friendly infrastructure, it’s easier than ever to give—privately, globally, and efficiently. But the benefits come with specific rules and documentation requirements. Here's what you need to know before donating crypto to charity.

Key Takeaways

• Donating cryptocurrency directly to charity can eliminate capital gains tax and allow you to claim a deduction based on fair market value—if the asset has been held for more than one year.
• Qualified charities and platforms now accept a wide range of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and stablecoins like USDC.
• Gifts over $5,000 in crypto require a certified appraisal and IRS Form 8283 to qualify for a tax deduction. Proper documentation is critical.
• Crypto donations are often faster, cheaper, and more private than traditional methods, with lower processing fees and no reliance on banks.
• Platforms like The Giving Block, Daffy, and Fidelity Charitable simplify the process by helping with compliance, valuation, and disbursement to multiple causes.

Why Donate Cryptocurrency to Charity?

Donating cryptocurrency isn’t just about convenience. It can offer unique financial, operational, and strategic advantages for both donors and nonprofits. This section explores the main reasons why crypto donations are gaining ground.

Potential Tax Benefits

One of the most compelling reasons to donate cryptocurrency is the potential tax efficiency. When you donate long-term appreciated crypto (held for over 12 months) directly to a 501(c)(3) organization, you may avoid paying capital gains tax on the appreciation. At the same time, you can often deduct the fair market value of the asset on your federal income tax return, subject to certain adjusted gross income (AGI) limits.
For example, if you bought $5,000 worth of Bitcoin that’s now worth $25,000, donating it directly can save you from paying tax on the $20,000 gain. That’s a significant difference when compared to selling first, then donating the cash.

Larger Gifts, Lower Cost

Because crypto donations can bypass capital gains taxes, the net cost to the donor may be lower than a comparable cash gift. This means donors can give more without spending more. It also means charities can receive the full value of the asset—an immediate and impactful benefit.
In practice, this translates to real dollars. A direct crypto gift worth $50,000 might only “cost” the donor around $35,000 after tax savings, depending on their tax bracket and the original purchase price of the asset.

Fast and Borderless Giving

Cryptocurrency operates outside traditional banking systems. This allows donations to be made directly, 24/7, from anywhere in the world. For global nonprofits, this can be a lifeline—especially in regions where banking infrastructure is limited or unstable.
Moreover, transfers are recorded on a public blockchain, creating a transparent trail of transactions. This can be particularly valuable for donors who want verifiable records of their charitable contributions.

Greater Privacy and Security

Donating crypto can offer more privacy than credit card or bank transfers. Your name, billing address, or personal financial information isn't required for the transaction itself. For high-net-worth donors or those living in regions with privacy concerns, this can be a meaningful advantage.
However, if you want a tax deduction, you’ll still need to comply with IRS requirements, including identity verification and valuation documentation.

How Crypto Donations Work: Step-by-Step

Donating cryptocurrency isn’t difficult, but it does involve more than sending funds to a wallet address. The steps vary slightly depending on the platform or organization, but the core process remains consistent.

Step 1: Choose a Qualified Charity That Accepts Crypto

Not every nonprofit is equipped to handle cryptocurrency. Start by confirming that the organization is a registered 501(c)(3) and has the infrastructure to receive crypto directly. Many large nonprofits now accept Bitcoin, Ethereum, and stablecoins via platforms like The Giving Block, Engiven, or Coinbase Commerce.
Examples of nonprofits accepting crypto:
• Red Cross (via BitPay)
• Internet Archive
• Khan Academy
• Human Rights Foundation
• The Water Project
You can also use donor-advised funds (DAFs) like Fidelity Charitable or Daffy, which convert crypto into fiat for easier distribution to multiple causes.

Step 2: Verify Your Holding Period and Tax Eligibility

For optimal tax benefits, ensure you've held the asset for more than one year. This qualifies it as a long-term capital asset. If held less than a year, your deduction is typically limited to the asset’s cost basis, not its appreciated value.
Be prepared to provide documentation, including the acquisition date and original purchase price, especially if you plan to claim a deduction.

Step 3: Get a Fair Market Value Appraisal (If Needed)

For donations over $5,000, the IRS requires a qualified, independent appraisal of the cryptocurrency’s fair market value (FMV) at the time of donation. This rule applies even to publicly traded assets like Bitcoin and Ethereum.
You’ll also need to submit IRS Form 8283, signed by both the appraiser and the receiving organization. Without this documentation, you risk losing your tax deduction.

Step 4: Initiate the Transfer

Most organizations provide a secure wallet address or a platform link. Always double-check the address—crypto transactions are irreversible. Some charities may require a Cryptocurrency Letter of Understanding or donor agreement outlining the terms of the gift.
Once confirmed, initiate the transfer using your crypto wallet or exchange. Make sure to capture the transaction hash and timestamp for your records.

Step 5: Obtain a Donation Receipt

After the transaction is completed, the receiving organization should issue a donation acknowledgment letter. This typically includes the date of the donation, a description of the asset (e.g., “1.2 BTC”), and confirmation that no goods or services were provided in return.
For U.S. taxpayers, this receipt is crucial for substantiating your deduction. Keep it with your tax records.

Crypto Donations vs. Traditional Giving

While the end goal—supporting a charitable cause—is the same, the mechanics and implications of crypto donations differ substantially from traditional cash or stock contributions. Understanding these differences can help donors make more strategic decisions.

Tax Efficiency: Crypto Often Wins

When donating cash, you’re typically limited to deducting the amount given—no more, no less. With appreciated assets like cryptocurrency, donors may eliminate capital gains tax and deduct the full fair market value if they’ve held the asset for more than 12 months.
Traditional stock gifts offer similar benefits, but crypto can be easier to transfer without going through a brokerage, particularly for smaller or international organizations with wallet infrastructure in place.

Processing Costs: Lower With Crypto

Donating via credit card or bank transfer typically incurs processing fees, which are deducted from the donation amount. These fees can range from 2% to 7.5%, depending on the payment processor. In contrast, crypto transaction fees—especially with networks like Litecoin or stablecoins like USDC—tend to be significantly lower.
That difference adds up. A $10,000 donation via credit card may only result in $9,300 reaching the nonprofit. Donated in crypto, the nonprofit might receive over $9,950 after blockchain transaction fees.

Speed and Accessibility

Crypto donations can be completed in minutes, anytime, from anywhere in the world. This is particularly valuable for international donors or organizations operating in regions with limited banking access. Unlike wire transfers, crypto doesn't rely on business hours, bank approvals, or third-party intermediaries.
That said, recipients must be equipped to manage and liquidate digital assets securely, or they risk volatility. Stablecoins are one way charities are mitigating this risk.

Privacy and Anonymity

Cash and credit card donations typically require full personal information. While this is useful for tax receipts, it can be a deterrent for donors who value discretion.
With crypto, you can contribute pseudonymously, revealing only what's needed for compliance. This can be especially important in politically sensitive or high-profile giving.

How to Maximize the Tax Benefits of Your Crypto Donation

The tax advantages of donating cryptocurrency can be substantial—but only if handled correctly. From timing the donation to filing the right paperwork, the IRS has clear rules. Missteps can cost you the deduction or trigger penalties, so it pays to plan ahead.

Hold Your Crypto for Over One Year

To qualify for a deduction based on the fair market value of your crypto, you must have held the asset for more than 12 months. If you donate cryptocurrency held for less than a year, your deduction is limited to the original cost basis (what you paid for it), not its current market value.
Long-term holdings unlock two tax benefits:
• You avoid capital gains tax on the appreciation.
• You may deduct the full fair market value of the asset, up to 30% of your adjusted gross income (AGI), assuming you itemize deductions.

Use a Qualified Appraiser for Large Donations

If your donation exceeds $5,000 in value, the IRS requires an independent, qualified appraisal of the cryptocurrency. Even though the asset may be publicly traded, crypto is still considered property—not cash—and falls under non-cash charitable contribution rules.
The appraisal must be conducted no more than 60 days before the donation and attached to IRS Form 8283 when filing your tax return. Failure to submit a proper appraisal can result in your entire deduction being denied.

Choose a Reputable Receiving Organization

Not all nonprofits are equipped to handle crypto compliantly. Choose an organization that understands how to issue the proper tax documentation, including a contemporaneous written acknowledgment letter. This letter should include:
• The date of the donation
• A description of the property (e.g., “2.5 ETH”)
• A statement that no goods or services were provided in exchange
If you’re using a donor-advised fund (like Fidelity Charitable or Daffy), the platform will typically guide you through this process and help with compliance.

Document the Transaction

Keep a full record of:
• The public wallet address you sent from
• The recipient wallet address
• The transaction hash (TXID)
• The date and timestamp of the transfer
• The value of the asset at the time of donation
This record serves as your audit trail, especially important if the IRS requests proof of your deduction claim.

Popular Platforms and Charities That Accept Crypto

Donating cryptocurrency used to be complicated. Today, it’s a streamlined process thanks to platforms designed to bridge the gap between donors and nonprofits. Many well-known charitable organizations now accept crypto directly or through third-party processors.

Platforms That Facilitate Crypto Donations

These services simplify the donation process and help with tax documentation, asset liquidation, and fund disbursement:
• The Giving Block

One of the most widely used platforms for crypto philanthropy. Supports hundreds of verified nonprofits and accepts a wide range of cryptocurrencies. Also offers donor-advised fund (DAF) capabilities.

• Engiven

Provides crypto donation infrastructure for faith-based and traditional charities. Offers automatic tax receipt generation and institutional-level security.

• Daffy

A donor-advised fund that allows you to contribute in crypto, hold your assets tax-free, and distribute them to over 1.5 million eligible nonprofits. Funds are converted to fiat before being sent to the charity.

• Fidelity Charitable

Allows donations of Bitcoin, Ethereum, and Litecoin. Requires appraisal for large gifts, but provides robust guidance for compliance and recordkeeping.

• Coinbase Commerce

Nonprofits can accept donations in Bitcoin, Ethereum, Litecoin, and USDC. The platform integrates easily into websites and provides automatic conversion to fiat if desired.

Major Charities Accepting Cryptocurrency

Many recognizable nonprofits now accept crypto either directly or via the platforms above. Examples include:
• United Way – Accepts Bitcoin via BitPay.
• Red Cross – Also uses BitPay for crypto donations.
• Khan Academy – Accepts Bitcoin, Bitcoin Cash, Litecoin, and Ethereum.
• Internet Archive – Accepts multiple cryptos including Bitcoin, Ethereum, and ZCash.
• Human Rights Foundation – Accepts Bitcoin and Ethereum directly.
• Rainforest Foundation US – Accepts crypto via Coinbase Commerce.
• GiveCrypto.org – Focused on direct cash assistance through crypto in underserved communities.
In addition, many smaller nonprofits are joining the space through partnerships with donation platforms, giving donors a wider range of causes to support—from education and public health to environmental conservation and open-source development.

Important Legal and Regulatory Considerations

Donating cryptocurrency is a legal transaction subject to IRS scrutiny. Before making a gift, it’s essential to understand the tax rules, documentation requirements, and reporting obligations tied to crypto donations. Mistakes can lead to audits, penalties, or disqualified deductions.

Cryptocurrency Is Treated as Property

The IRS classifies cryptocurrency as property, not currency. That means every donation involving crypto is considered a non-cash charitable contribution. This triggers specific requirements under IRS Publication 526 and IRS Form 8283, especially for gifts exceeding $500 or $5,000.
Unlike cash donations, crypto gifts require more documentation to qualify for a tax deduction—particularly if you’re itemizing.

Appraisal Rules for High-Value Donations

For donations valued over $5,000, you must obtain a qualified appraisal. This cannot be done using an exchange screenshot or your own assessment. The appraisal must come from an independent appraiser with experience valuing crypto assets and must be dated within 60 days of the donation.
You’ll also need to:
• Complete Section B of Form 8283
• Submit the appraiser’s signed report
• Get the recipient organization’s acknowledgment signature on the form
Without these, your deduction may be denied in full—even if the donation itself was valid.

Donation Timing and IRS Deadlines

Timing matters. The date of donation is the date the asset is transferred on the blockchain—not the day you initiate the transaction or when the recipient converts it to fiat. This date is what you’ll report to the IRS.
To claim a deduction for a given tax year, the transfer must be completed before 11:59 PM on December 31st, based on the blockchain timestamp. Planning ahead is crucial, particularly during high-traffic holiday periods when networks slow down.

Anti-Money Laundering (AML) and KYC Checks

While donating crypto can be anonymous at the blockchain level, most compliant nonprofits and platforms still require some level of Know Your Customer (KYC) documentation. This is especially true for large donations or gifts processed through financial intermediaries.
Expect to provide:
• A valid government-issued ID
• Proof of address
• Source-of-funds explanation for large donations
This protects both parties and ensures the donation doesn’t violate anti-money laundering regulations.

Frequently Asked Questions About Donating Cryptocurrency

What types of cryptocurrency can I donate?

Most nonprofits that accept crypto are equipped to receive Bitcoin (BTC) and Ethereum (ETH). Some also accept Litecoin (LTC), Bitcoin Cash (BCH), USD Coin (USDC), and other popular assets. If you're donating through a platform like The Giving Block or Coinbase Commerce, you'll have more options—including support for select altcoins and stablecoins.

Do I need to pay taxes when I donate crypto?

If you donate long-term appreciated crypto directly to a qualified 501(c)(3), you typically do not pay capital gains tax. In addition, you may be eligible for a charitable deduction based on the asset’s fair market value—if you itemize your deductions and meet the holding period and documentation requirements.
However, if you sell the crypto first and then donate the proceeds, you’ll trigger a taxable event and owe capital gains on the appreciation.

How is the fair market value determined?

Fair market value (FMV) is based on the price of the cryptocurrency at the time of the transfer, not the average daily price. For donations above $5,000, you’ll need a qualified appraisal from a certified professional, even if the asset is publicly traded.
The IRS does not accept exchange screenshots or self-determined values in place of an official appraisal.

Can I remain anonymous when donating crypto?

On the blockchain, yes—but not necessarily for tax purposes. If you want a tax deduction, you’ll need to disclose your identity to the receiving organization and provide documentation that satisfies IRS rules. If anonymity is a priority, you can still donate through privacy-focused methods, but you’ll forgo the tax write-off.

What forms do I need to file with the IRS?

• Form 8283 – Required for non-cash donations over $500. Section B must be completed for donations over $5,000.
• Appraisal Report – Mandatory for gifts over $5,000 in value.
• Acknowledgment Letter – From the charity, stating the date, asset donated, and confirmation that no goods or services were exchanged.

Be sure to retain these forms with your tax return and consult a tax professional if you're unsure how to proceed.

Final Thoughts: What to Know Before You Donate Crypto

Donating cryptocurrency can be one of the most tax-efficient and impactful ways to give—especially if you’ve seen your digital assets appreciate over time. But to fully benefit, you need to approach it the same way you would any major financial decision: with preparation, documentation, and awareness of the rules.

Before making a donation, confirm that the receiving organization is equipped to handle crypto properly and that your gift qualifies under IRS guidelines. If your donation exceeds $5,000 in value, plan ahead to secure a qualified appraisal. Make sure all your paperwork—including Form 8283 and an acknowledgment letter from the charity—is in order before filing your return.