Blockchain

Alex Wilson of The Giving Block said that we have seen “the number of non-profit organizations accepting encryption has increased by a factor of 10”

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With the market value of digital currencies exceeding 2 trillion U.S. dollars, interest in crypto philanthropy has now reached a record level.From help to Build a school in Uganda For fundraising Frontline medical staff And raise awareness Intellectually Handicapped ArtistWith the generous help of crypto enthusiasts, many non-profit projects are gaining attention.

However, the rewards of providing cryptocurrency to charities are not limited to the feeling of completing a selfless task. The U.S. Internal Revenue Service currently classifies cryptocurrencies as capital assets, such as stocks. This means that investors can deduct the full market value of the cryptocurrency at the time of donation from their ordinary income (i.e. salary) when donating, while avoiding capital gains taxes altogether.

For example, suppose that a cryptocurrency investor Elsa has an annual income of 85,000 USD (single tax declaration) and purchases 10,000 USD worth of Bitcoin (Bitcoin) four years ago. In December, she donated the entire value of the investment (currently worth US$29,650) to the American Cancer Society.

Not only can ACS receive a lump sum of cash to fund its operations, but Elsa can also deduct 30% of the value of its donations each year, and the remaining amount can be carried forward for up to five years. As a result, her first year’s tax income was only $76,105. Thanks to her donation, Elsa saved a total of $7,116 in federal taxes.

The generous tax treatment of crypto donations may be why this practice has become so popular. In an exclusive interview with Cointelegraph, Alex Wilson, CEO of The Giving Block, a non-profit fundraising platform, discussed how the setup can bring a win-win situation for investors and charities.During the crypto donation on Tuesday, the organization proposed USD 2.4 million a day For charity.

Cryptocurrency review on Tuesday. Source: give block

Cointelegraph: How do you ensure that donations reach its intended charity organization safely?

Alex Wilson: Our setup is intentional so that all donations from donors always go directly to the wallet of the charity. Now, we are not pastors or something similar, so it always goes directly to the wallet of the charity. On the backend, they have institutional accounts in Gemini. This way, they don’t have to worry about things like managing their private keys, you know. They use Gemini’s hosting solution through us.

CT: Are there any topics about donations this year?

AW: I mean, as far as the subject is concerned, it has been normalized to everything. We see various different types of charities with different scales. We cooperate with many local charities, as well as domestic and international brands. So, there is really a little bit. I would not say that there is a group or a non-profit organization that has received more donations than other organizations. But I want to say that some of the larger charities tend to do well, such as some well-known brands you may know, such as Save the Children or the American Cancer Society-you know, such names. They tend to do very well in fundraising. Or a group like St. Jude. They are usually good at fundraising, so they are also often better at fundraising cryptocurrencies.

CT: What is the amount of donations you saw this year and how does it compare with previous years?

AW: This year alone, our donation will exceed 100 million U.S. dollars. Usually, this exceeds people’s expectations. Therefore, it is significantly more than last year. Last year, we made 4 million U.S. dollars throughout the year. We are now doing more things every month. In addition, in terms of the number of non-profit organizations, we are achieving tremendous growth. Last year we had about 100 non-profit organizations on the platform, and now we have just exceeded 1,000. Therefore, in terms of the number of non-profit organizations that accept encryption, it has basically increased by 10 times. It has really reached a turning point now, and it has become more and more mainstream. Therefore, basically, non-profit organizations are becoming more and more satisfied with the idea of ​​improving cryptocurrency, especially now that they are seeing these outstanding results. It no longer looks like something on the edge. They see big companies entering the cryptocurrency space, and they are becoming more and more satisfied with this concept of fundraising cryptocurrency.

CT: Do you have any functions that can donate NFT directly to charitable organizations or similar to physical artworks?

AW: Usually, we only recommend donating the proceeds of NFT. The tricky part of sending NFTs directly to non-profit organizations is the valuation and tax relief. As a result, NFT becomes complicated because the IRS and other tax agencies do not have extensive guidance on NFT tax treatment. However, this is obvious when you are just donating proceeds, because it is just like a regular cryptocurrency donation. So, generally speaking, we would say, “Hey, if you are an artist, a creator, please sell NFT, and then donate the proceeds directly to charity as Ether,” or they sell any chain of it. This is very popular. I mean, every month, millions of dollars are raised from this new category we call NFT philanthropy. We will even have a special day next week, called NFT Tuesday. So next week, we will focus on all these charity communities and creators, and work with companies like Nifty Gateway.

CT: In order to follow up on this issue, where do you think the regulation in this area will go?

AW: I think it will continue to become more obvious. Fortunately, for crypto donations-surprisingly-it was already very clear as early as 2014. The U.S. Internal Revenue Service has already provided guidance on how to handle crypto donations from a tax perspective. The IRS decided in 2014 to treat cryptocurrencies as property. In terms of donating property, for crypto, it is very similar to how crypto handles donations of stocks and other properties, because donors do not have to pay capital gains tax on these donations. They will receive a fair market value deducting taxes when they donate. Then for charities, if they are registered charities, they are also tax-exempt. Therefore, charitable organizations do not pay taxes. This is a win-win situation for both donors and charities.

Cryptocurrency review on Tuesday. Source: give block

CT: Do you plan to integrate with DeFi, such as designing a solution that can directly use part of the proceeds from the loan interest rate to charities?

AW: We are doing something similar; it is not online yet. The way we started to cooperate with some DeFi platforms and agreements is, for example, when we cooperate with 1inch, users on the 1inch platform can donate to all the businesses we work with. So, if you enter the 1-inch page, there will be a donation encryption button on their page. If you click on it, you can donate to all the different causes we work with. We don’t have anything for borrowing, collateralizing, and earning income, but this will happen in the future.

CT: Do you want to include any mission statement or any other comments?

AW: I just want to add a few things briefly. You know, December is undoubtedly the busiest period for donations. Yesterday, we just started our year-end event on Tuesday through Crypto Giving. So, we started our own cryptocurrency equivalent and purchased a cryptocurrency donation on Tuesday. We use it as the starting point for our one-month campaign in December. Since we talked about this huge tax benefit, we saw more donations in December than the rest of the month combined.

Therefore, there will be such hype and concern in December, and these people will meet with their accountants or tax lawyers or their consultants to ensure that they receive donations before the end of the year so they can be included in the current tax year. So we, you know, will raise a lot of money this year. It’s amazing to see the crypto community come together for this. This month, we will announce how much our Crypto Giving Pledge members have donated and to whom. And you know, these are very well-known people in the field, such as Ryan Selkis, Meltem Demirors-many truly well-known names will make huge charitable donations in December.