Cryptocurrency donations are booming. Many donors hold Bitcoin, Ethereum, and other cryptocurrencies that have experienced sharp appreciation. In the U.S., the IRS treats crypto as property, so giving it to charity is generally non-taxable. So, donors pay no capital gains tax on the gift and (if they itemize) can deduct the coin’s full fair market value. This makes donating crypto highly tax-efficient to donors.

By donating crypto directly, a donor avoids capital gains taxes on the appreciated asset while giving more to charity. Cryptocurrency giving has quickly become a significant trend in nonprofit fundraising. In 2024 alone, U.S. charities received more than $1 billion in cryptocurrency donations, and the average crypto gift soared to about $10,978 (a ~386% increase from 2023). Today, roughly 70% of the top 100 U.S. charities accept crypto donations, which shows how mainstream this channel has become.

Benefits of Accepting Cryptocurrency Donations

Accepting cryptocurrency opens a powerful new avenue for charitable giving – one that benefits both donors and the organizations they support. When donors contribute cryptocurrency directly, rather than selling it first, they avoid capital gains taxes while still receiving a charitable deduction for the full fair market value of their gift. This means more funds go directly to the nonprofit, and donors can maximize their impact without incurring unnecessary tax liability.

For example, two individuals each planning to give $1 million may experience very different results. The donor who contributes crypto directly pays no capital gains tax, allowing the full $1 million to reach the cause. The donor who sells the asset first may owe significant taxes – potentially hundreds of thousands of dollars – leaving a much smaller amount to donate. This difference demonstrates how crypto gifts can significantly amplify charitable outcomes without additional cost to the donor.

Beyond the tax advantages, accepting crypto allows nonprofits to reach an entirely new generation of supporters. Many cryptocurrency holders are young, innovative, and deeply engaged in digital culture. They often want to support causes that align with their values but are limited by the small number of nonprofits that currently accept crypto. By enabling these gifts, organizations position themselves as forward-thinking and accessible to a growing, affluent donor base.

Crypto giving also encourages larger and more frequent donations. Non-cash assets, such as cryptocurrency, often represent substantial unrealized gains, allowing donors to contribute more generously than they might in cash. For nonprofits, these gifts can lead to faster growth, stronger balance sheets, and new opportunities for long-term funding.

Finally, embracing crypto demonstrates adaptability and innovation. As digital assets become an increasingly mainstream part of personal and institutional finance, nonprofits that integrate crypto giving stand out as progressive and responsive to modern donor preferences. By doing so, they expand their donor pool, strengthen donor relationships, and future-proof their fundraising strategy in a rapidly evolving financial landscape.

Key Considerations and Risks of Accepting Cryptocurrency Donations

While accepting cryptocurrency can offer exciting opportunities for growth and innovation, nonprofits must also navigate a range of financial, regulatory, and operational challenges. Understanding and preparing for these considerations ensures that crypto giving strengthens – rather than complicates – your organization’s mission.

Market Volatility

Cryptocurrency values can fluctuate dramatically in short periods, sometimes within hours. This volatility poses a significant risk for nonprofits, as the value of a donation may decline before it can be converted or used. For instance, a crypto gift worth $10,000 today could be worth considerably less – or more – by the time it’s sold or applied to a program.

To protect against sudden losses, many organizations adopt an immediate liquidation policy, converting crypto gifts into stable assets upon receipt. Establishing a formal conversion policy helps maintain financial predictability and ensures the charity benefits from the donor’s intended value, regardless of market shifts.

Tax and Accounting Compliance

Cryptocurrency is treated as property for tax purposes, which adds complexity to the accounting process. Each crypto gift must be recorded at its fair market value on the date it is received, and this value must be reflected in financial statements. Nonprofits are also required to maintain detailed documentation for audit and reporting purposes.

For larger gifts, additional tax forms and disclosures may be necessary. As accounting standards evolve, organizations must ensure that their finance teams understand how to classify and report digital assets properly. Preparing early for these requirements minimizes compliance risks and positions the organization to handle future regulatory updates smoothly.

Gift Acceptance Policy

Before accepting crypto, nonprofits should have a clearly defined gift acceptance policy tailored to digital assets. This document should outline which cryptocurrencies are accepted, how they will be processed, and under what circumstances they might be rejected. Some tokens carry higher risk or lower liquidity, so setting boundaries in advance helps avoid complications later.

The policy should also identify who within the organization has the authority to approve and liquidate crypto donations, ensuring accountability and consistency. Because blockchain transactions can be pseudonymous, nonprofits must establish procedures to verify donor identity and collect sufficient information for stewardship, receipting, and compliance purposes.

Regulatory and Security Concerns

The anonymity and global nature of cryptocurrency transactions introduce additional risks related to financial transparency and security. Nonprofits must ensure they are not inadvertently accepting funds from illicit sources. Implementing basic due diligence measures, such as verifying donor information and monitoring transactions for irregularities, is essential.

Additionally, if a nonprofit chooses to hold crypto directly, it must protect its digital wallets with robust security protocols. Loss of access to private keys or credentials can result in irreversible loss of funds. To mitigate exposure to both regulatory and technical risks, many organizations partner with trusted intermediaries or custodial services that specialize in managing crypto assets. Maintaining compliance, transparency, and data security should be top priorities in any crypto donation strategy.

How to Get Started with Cryptocurrency Donations

If your nonprofit decides to accept crypto, follow a structured approach:

Choose an acceptance method. Decide whether to accept crypto directly or via an intermediary. Many organizations use crypto fundraising platforms (e.g., The Giving Block, Zeffy) or payment processors (Coinbase Commerce, BitPay) that handle the technical setup, automatic conversion, and tax receipts.

Some nonprofits use donor-advised funds or platforms like Every.org to receive crypto gifts indirectly – in this case, the nonprofit gets a cash grant and the third party handles the crypto. Direct self-custody is possible but requires technical expertise. Only pursue a direct wallet if you have the staff and processes (e.g. key management policies) to handle it.

1. Set up wallets or providers.

If accepting crypto in-house, create a secure wallet (for example, a hardware wallet or a reputable custodial service) for each accepted coin. Limit access to authorized staff and back up the seed phrase offline. If using a processor, register your organization and link it to your bank account. Decide in advance how gifts will be converted: many nonprofits immediately exchange crypto for USD to avoid volatility.

2. Integrate crypto giving on your website.

Let donors know you accept cryptocurrency by adding it to your donation page and Ways to Give materials. Include a “Donate Crypto” button or option (with icons for Bitcoin, Ethereum, etc.) on your main giving page.

You can also create a dedicated page explaining crypto gifts and their tax benefits. Many platforms offer embeddable widgets or checkout tools that you can add, allowing donors to send coins directly to your wallets.

3. Record donations and convert.

When you receive a cryptocurrency gift, record it immediately at its fair market value (in USD) on the date of the donation. Provide the donor with an acknowledgment for the value (required for any donation of $250 or more).

If you convert the coins to cash, log the sale in your accounting. Be sure to update your IRS Form 990 with the total crypto donations (as you would for any property gift). If you sell the cryptocurrency within three years, file Form 8282 as required, and ensure that donors have signed Form 8283 for gifts exceeding $ 5,000. Work with your accountant to align all crypto accounting with the new standards.

Conclusion

Cryptocurrency donations to nonprofits present both opportunities and responsibilities. On the one hand, accepting crypto can attract a new generation of donors and unlock larger, tax-efficient gifts. On the other hand, nonprofits must address volatility, regulatory compliance, and security risks.

In the U.S., the trend is clear – crypto giving is surging – but each organization should weigh the pros and cons carefully. With a clear gift acceptance policy, sound accounting practices, and the proper infrastructure (or partner), a nonprofit can confidently enable crypto donations. When done thoughtfully, integrating cryptocurrency can be a practical, modern way to diversify fundraising and support your mission.

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