Tax Incentives for Crypto Donations: Expert Perspective
Crypto donations offer more than just the satisfaction of contributing to a good cause—they also provide substantial tax benefits for donors.
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Daffy CEO Adam Nash highlights the growing role of cryptocurrencies in philanthropy and the unique benefits available to crypto donors.
The Daffy platform (Donor Advised Fund for You) enables users to allocate funds for charitable donations while enjoying tax benefits—especially when contributing assets like cryptocurrencies or shares in crypto ETFs.
Daffy supports hundreds of cryptocurrencies for donations and offers a variety of investment portfolios tailored to user needs.
Right now, we support over 240 different types of tokens – basically everything that Coinbase supports
said Adam Nash, CEO of Daffy. He added that the platform is dedicated to accommodating the diverse preferences of its users.
Adam Nash, CEO of Daffy. Source: YouTube
Key Tax Benefits of Donating Cryptocurrency
Donating cryptocurrency held for over a year offers two major tax advantages:
- Full tax deduction based on the fair market value of the asset.
- Exemption from capital gains tax.
A lot of people are a little freaked out about filling out all the IRS forms when it comes to crypto taxes
noted Adam Nash.
According to the CEO of Daffy, donating cryptocurrency not only simplifies tax filing but also provides an opportunity to support meaningful causes effectively.
Investment Portfolios for Donors
Daffy caters to a wide range of donor preferences by offering conservative portfolios with stocks and ETFs, as well as more aggressive options focused entirely on cryptocurrencies like Bitcoin, Ethereum, and Solana.
Nash highlighted that many users view cryptocurrency both as part of a diversified investment strategy and as a tool to enhance their charitable giving.
Some people say, ‘I think in five years, seven years, I might have a lot of money to give to the organizations I care about,’ and they love having crypto add that benefit to their charitable giving
Nash explained.
Decisions to add new assets are driven by member demand and market analysis. For instance, in December 2024, Daffy introduced a Solana-focused portfolio.
Daffy’s subscription pricing starts at just $3 per month, making it a cost-effective alternative to traditional donor-advised funds, which typically charge fees based on the value of contributed assets.
This pricing model ensures that more funds go directly to charitable causes, aligning with Daffy’s mission to simplify and maximize the impact of philanthropy.
We want to enable people to donate whatever crypto asset they have and see their charitable dollars grow
Nash concluded.
Projected Growth of Crypto Donations in 2025
Looking ahead to 2025, Daffy CEO Adam Nash shared his optimism about the increasing integration of cryptocurrencies into financial systems. He highlighted the growing number of financial advisors and asset managers recommending cryptocurrencies as part of diversified portfolios.
Donations made in cryptocurrency on the Daffy platform have varied widely, ranging from $10 to several million dollars, with an average donation size of approximately $1,000. Nash anticipates a rise in both large-scale and smaller contributions as cryptocurrencies gain broader acceptance.
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