Cryptocurrency Donations for Fidelity Charitable are Booming
It seems that digital currency enthusiasts have a charitable side, as the folks at Fidelity Charitable has said the fastest growing method of donations they are receiving are through cryptocurrencies.
It was on February 15, 2018, that the worldwide charity announced they got about $69 million donations in the form of digital currencies during 2017, which was by far the fastest growing method of donation they had for the year. This information was listed in their annual report, and the majority of these donations were in the form of bitcoin and ether, with a total of 169 unique donors being involved.
It was towards the latter end of 2015 that the charity initially began accepting bitcoin as a method of donating and the figures for 2017 show a tenfold increase in the popularity of this donation method. This means that it grew 140 percent quicker than other alternative types of donation such as LLC shares, bags of grain and real estate.
Since cryptocurrencies first came to the fore, using it to donate money has been one of the key ways it has been used.
Bitcoin and Philanthropy
It wasn’t long after this that a number of significant charities launched their own trials for accepting this format of donation. In 2014, the foremost cryptocurrency exchange Coinbase implemented changes into their platform which allowed users to send donations to non-profits easily.
There are a number of consultants in the charity sector these days who help charities accept these currencies, as well as advising them on the best course of action when it comes to managing these funds.
Often there are not a lot of people involved in these non-profits that have much experience when it comes to digital currencies, so it is worthwhile getting outside help involved even in the beginning stages to advise on best practices going forward with cryptocurrency donations.
2017 Sees a Large Spike in Bitcoin Donations
Fidelity Charitable was one of the early adopters as they started using the service provided by Coinbase to accept donations in November 2015. It was only in 2017 that they saw significant donations in the form of digital currencies, presumably due to the massive increase in the value of the likes of bitcoin and the move into the mainstream for digital currencies. In 2016 for example, their total crypto donations were just $7 million.
They did run a marketing campaign at the beginning of 2017 to highlight they were eager to accept donations in bitcoin and the likes. One of the big advantages of making these donations using digital currency is that the donator does not have to pay capital gains tax on those assets, which is part of the Fidelity Charitable investor managed fund.
This means that as the tax bracket of the donor increases, the higher the amount the charity receives in donations as a result. This helped the 127,000 different non-profits that are supported by Fidelity Charitable to get extra money than they otherwise would have received.