As Community Foundation Tampa Bay’s Director of Donor Relations and Associate Counsel, Nicolette Rea works on fund agreements and IRS compliance and oversees donor stewardship for the regional organization connecting philanthropists and nonprofits. In her nearly five years working at the Foundation, she has witnessed a unique method of charitable giving become increasingly common over time: cryptocurrency.
“We are very open to accepting all kinds of different assets because it helps with our mission of growing philanthropy, opens up the door for all the possibilities of gifts, and maximizes the impact on the community,” Rea says.”If a donor is tax savvy and really wants to be tax advantageous with their giving, cryptocurrency is a great option.”
The rise of cryptocurrency donations
Rea recalls a period when such donations were relatively uncommon. But a May 2024 Securities and Exchange Commission (SEC) decision further opened the door for cryptocurrency donations. Since then, donor interest in crypto contributions has skyrocketed.
“It wasn’t very common and then, in the span of one week, I got many calls asking questions about cryptocurrency,” Rea shares.
Since the SEC decision in May, cryptocurrency has increasingly become a more common asset in donors' portfolios of charitable gifts.
While some may view crypto as volatile, Community Foundation Tampa Bay welcomes it as a viable charitable gift. It is considered a non-cash asset, which the Foundation encourages.
“They are really some of the best gifts that we look for in charitable giving,” says Rea. “Since it’s a non-cash asset, you really are making a bigger gift if you give it directly to the charity.”
She attributes this to the avoidance of the capital gains tax. By gifting cryptocurrency directly to the charity instead of selling it for cash first, donors can potentially avoid paying the capital gains tax.
The impact of non-cash assets & donor advised funds
Cryptocurrency is not only a tax-savvy way to donate. It can make a significant community impact.
Most of the Foundation’s cryptocurrency donations have gone into donor-advised funds, which is essentially a charitable checking account run by the Foundation. Donors can give a gift, whether cash or non-cash, and invest it at the Foundation, where it grows tax-free and can be easily accessed and donated quickly.
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Community Foundation Tampa BayCommunity Foundation Tampa Bay Director of Donor Relations and Associate Counsel Nicolette Rea“It’s really rewarding because those types of gifts really make a huge impact on the community,” Rea says. “It’s rewarding for everyone involved, the philanthropists, the nonprofits, and us too. Donor-advised funds have really shown an impact, especially now, because that money is there and ready for immediate charitable giving. We’ve seen a lot of donors just tap into their pot of charitable money and give it out really quickly since it’s already there and set for charity.”
Throughout her years at the Foundation, Rea has witnessed firsthand the mobilization of donor support and the impact of donor-advised funds. She gives an example of a small, grassroots nonprofit in St. Pete. After Community Foundation Tampa Bay helped connect them with various donors, they’ve garnered much philanthropic support for their mission throughout time.
However, they faced a challenge when the nonprofit approached the Foundation, reporting that they had lost a portion of their food supply. Rea was able to connect the nonprofit with supportive donors and supply them with their needs through donor-advised funds. Thanks to the effectiveness of these funds, they were able to assist the nonprofit in a time of need.
“Especially right now, it has been amazing to work with so many of them and watch how good-hearted everyone is. There’s a lot of philanthropic people in Tampa,” she says.
Rea has also seen the recent impact of donor-advised funds following hurricanes Helene and Milton. The Foundation’s Critical Needs List connects fundholders to nonprofits impacted by the hurricanes or helping the community’s recovery.
The future of cryptocurrency in charity
When it comes to the future of cryptocurrency in charitable donations, Rea holds hope for crypto to become more commonplace in charitable donations. She encourages philanthropists holding the digital currency to discuss it with their tax advisors. The 2024 annual report from The Giving Block, a crypto fundraising platform for nonprofits, estimates that a total of more than $2 billion has been donated via crypto as of January 2024 and that 56 percent of the country’s largest charities accept it.
“A lot of people don’t know that it’s a viable charitable gift,” Rea says. “It’s not something that folks think about, but we’re seeing more and more folks get into that space. I don’t want to definitely say it’s the future of charitable giving, but it’s worth a conversation and it's great for charities and donors to know that it is possible.”
For more information, go to Cryptocurrency Donations: Embracing the Future of Philanthropy
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