How to donate crypto: What you need to know

Buying crypto isn’t just about building wealth – many investors also use digital assets to help those in need. Between 2019 and 2024, global cryptocurrency donations reached a historic $2 billion, and more nonprofits are opening up to digital giving. In fact, half of Forbes’ top 100 charities are now considered “crypto-friendly.”

But beyond generosity, there are also practical reasons to donate crypto. It can offer tax advantages that make it more efficient than giving traditional currency – especially when it comes to reducing your crypto tax liability.

In this guide, we’ll explain how to donate crypto and why digital asset donations might be more helpful to those in need.

Why donate crypto? The benefits of cryptocurrency donations 

The benefits of giving go beyond just feeling good. Philanthropists donate to make a difference – but doing so with digital assets also offers some unique advantages.

Claiming crypto tax incentives

Donating crypto may be a smart option for investors looking to reduce their tax burden. Giving digital assets directly to a nonprofit allows you to avoid capital gains taxes on appreciated holdings. You may also be able to claim a charitable deduction on your tax return.

Greater transparency and efficiency

All transactions on open-source peer-to-peer (P2P) blockchains are visible on their respective distributed ledgers. Thanks to this level of transparency, all crypto donations are traceable through blockchain explorers like Blockchain.com or Etherscan, helping donors confirm that funds reach their intended destination. Also, because crypto transactions go directly to a charity’s wallet – rather than through a bank or other traditional financial institution – nonprofits can reduce administrative fees and processing delays.

Quick cross-border transactions

Blockchain technology is borderless. Anyone with an internet connection can transfer funds to a nonprofit from anywhere in the world – all you need is the charity's crypto wallet address. This makes it easier to donate to nonprofits operating in regions with financial restrictions, such as sanctions, currency controls, or limited access to reliable banking systems.

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How to donate crypto to charity: A step-by-step guide 

While donating digital assets isn’t as common as using traditional methods like credit cards, bank transfers, or donor platforms, more nonprofits now accept cryptocurrency. Here’s an overview of how to contribute crypto to a cause you care about:

1. Choose a crypto-friendly charity

Start by finding a nonprofit that accepts crypto donations. If it doesn’t have a dedicated wallet address for digital assets or doesn’t accept crypto directly, look into third-party platforms like The Giving Block and Endaoment, which help connect crypto donors with nonprofits.

2. Select the cryptocurrency to donate

Once you’ve confirmed that the organization accepts crypto, check which digital assets it supports. Most nonprofits accept major coins like Bitcoin (BTC) or stablecoins, but each platform will list the specific assets they accept.

3. Verify the donation process

Each nonprofit handles crypto a little differently. Some publish a wallet address and accept direct transfers, while others use a processor that converts crypto to fiat. Either way, always confirm the correct wallet address before sending anything.

4. Check (and double-check) all the details

Choose the cryptocurrency you want to give, and copy the nonprofit’s wallet address for that specific asset. Be careful – wallet addresses are not interchangeable. For example, sending Bitcoin to an Ethereum (ETH) address will result in lost funds. Always double-check that the asset and wallet type match before completing the transaction.

5. Save records for tax purposes

To claim a deduction and reduce your capital gains taxes, you’ll need a clear record of the donation. Save your transaction ID, wallet address, confirmation receipt, and any documentation from the nonprofit. Keep everything in a safe place and share it with your CPA or tax advisor when filing.

What to consider when donating crypto 

The primary purpose behind digital asset donations is the same as sending cash – to help charities. But blockchain’s distinct characteristics bring a few additional considerations. Because of this, it's important to review how crypto’s decentralized nature may affect the donation process.

Tax implications

In many regions, crypto donations to registered nonprofits are tax-deductible, which can help lower a donor’s year-end taxable income. Giving crypto directly to a charity may also allow donors to avoid capital gains tax if the assets have increased in value. However, tax treatment varies by jurisdiction, so it’s important to keep detailed records of all transactions to support your case with tax authorities. For this reason, many investors use crypto tax software like CoinTracker to track their activity and consult crypto-savvy CPAs for personalized guidance.

Cryptocurrency volatility

Unless investors donate stablecoins like Tether (USDT) or USD Coin (USDC), which are pegged to fiat at a 1:1 ratio, the market value of their digital assets will fluctuate. Even established cryptocurrencies like Bitcoin are volatile, and there’s no way to predict how price swings will affect the value a charity ultimately receives. To ensure the nonprofit receives a fixed dollar amount, it’s best to use stablecoins or convert crypto to fiat before making the donation.

Anonymous donations

Sending cryptocurrencies anonymously offers the benefit of online privacy, but it also creates potential pitfalls for philanthropists. Notably, donors may struggle to claim deductions if they don’t provide proper documentation, which tax reporting requires. While some privacy-centric coins like Monero (XMR) offer stronger anonymity, many blockchains –such as Bitcoin – are only pseudonymous, allowing others to trace transactions through the public ledger. In most cases, registered charities choose not to accept fully anonymous contributions to avoid crypto compliance issues.

Gas fees

Sending cryptocurrency to a charity isn’t free – network fees always apply. The amount you send, the blockchain you use, and the timing of your transfer all affect how much the charity actually receives. For example, during periods of high network congestion, the Ethereum blockchain often charges higher-than-average gas fees for sending Ether or ERC-20 tokens. Always review the quoted fees before sending your donation to make sure you’re getting the most cost-effective option.

Maximize crypto tax deductions with CoinTracker 

Whether you’re donating to charity or using other strategies like tax-loss harvesting, there are ways to reduce your crypto tax liability – but you need to know how to report them correctly. CoinTracker’s Portfolio Tracker is one of the easiest ways to determine whether crypto donations are tax-deductible and to report them using IRS-friendly forms. CoinTracker makes it simple to organize your records and explore smart ways to reduce your tax burden.

Get started with a free CoinTracker account today and see how easy it is to file your crypto taxes. 

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.