Crypto philanthropy opens door to new donors, more donations
By Josh Dukelow, gift planning officer
When we picture “wealth,” we often imagine stacks of cash, stock portfolios and real estate. In fact, more than half of the liquid assets of high net-worth individuals are held in IRAs (individual retirement accounts). But not everyone has equal access to these types of investments.
People of color are not new to charitable giving. Studies show that non-white donors give a higher portion of their wealth to charity than their white peers. However, financial institutions and the philanthropic sector have not always been inviting to these prospective donors. Crypto philanthropy offers a path to address this inequity.
Cryptocurrency, as an asset, has lower barriers-to-entry and higher rates of participation for traditionally marginalized groups. According to a 2022 survey, an estimated 25% of Black Americans with a household income over $50,000 own cryptocurrency, compared to just 15% of White Americans with a similar income. And 38% of Black people under 40 own cryptocurrency, compared to 29% of White people under 40.
Cryptocurrency is mysterious to those who are not familiar with it. The terminology is foreign, conditions can change rapidly and it’s easy to feel overwhelmed. For people who are not traditionally part of charitable giving conversations, the same can be true. The Community Foundation for Greater Atlanta wants to bring these two groups together to generate more donations for local nonprofits.
We took one important step in that direction last month, when we officially began accepting donations of cryptocurrency. This will allow more donors to support the causes they care about, and enable local nonprofits to accept gifts they otherwise couldn’t. By enabling charitable gifts of cryptocurrency, the Community Foundation hopes these potential donors will see their place in Atlanta’s philanthropic ecosystem.
This new service also helps local nonprofits increase donations. Small and mid-sized nonprofits may not have the time and staff resources to set up the infrastructure to accept crypto donations on their own. The Community Foundation has long helped nonprofits accept complex gifts, and now cryptocurrency is another asset on the list.
The timing for this new service couldn’t be better. Donors of all kinds like to give as the calendar year comes to an end. Despite the ups and downs in cryptocurrency valuations in 2022, many crypto owners still have substantial gains. By using cryptocurrency for charitable giving, donors can avoid capital gains taxes and receive a substantial charitable deduction on their income taxes. These tax savings might even mean more funds are available to give to charity.
The Community Foundation exists to help connect generous donors with local nonprofits, and now cryptocurrency is part of the picture. Turn your gains into good by using crypto for charitable giving, at year-end or any time. Contact me at 404-588-3208 to learn more about the process and advantages to crypto-philanthropy.
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