Charities not yet ready to embrace crypto donations because of paperwork and reporting hurdles.
With the rise in value and popularity of cryptocurrency, businesses in the nonprofit sector have expressed interest in accepting cryptocurrency as a tool to reach donors that don’t have cash but may have stashes of Bitcoin. Nonprofits are looking to tap into a whole new generation of donors, but aging IRS policies don’t allow charities to take full advantage of crypto.
According to BPM Partner Daniel Figueredo, who spoke with Bloomberg’s Daily Tax Report, one issue for nonprofits is reporting the donation. Nonprofits must certify they received the donation, then report the sale price on a different form if it was sold within a three-year period. Given how volatile crypto markets can be, it can make reporting very tricky. That, in addition to outdated guidance, presents challenges for accepting crypto donations.
About Daniel Figueredo
Daniel began his career at BPM, and for nearly 20 years he has helped the Firm and his clients grow and succeed. Daniel's nonprofit experience includes working extensively with fair value and alternative investments, the Uniform Guidance and Single Audits, planned giving, and significant capital campaigns. He is deeply involved in serving nonprofit organizations and works with private foundations, social enterprises, trade associations, arts and culture, advocacy and political organizations, private schools, community foundations and higher education.
About BPM’s Nonprofit Industry Group
With over 60 talented professionals, our Nonprofit Industry Group employs a full-service approach to accounting for nonprofits. From auditing and tax preparation, to outsourcing, technology and investment consulting, we help nonprofits make informed decisions through our rapidly changing regulatory and economic environment. To learn more, visit our Nonprofit Industry Group page.