Crypto Donations

How are donations processed?

1. Donors are provided a dedicated one-time donation address after filling out and submitting the gift details form.
   1. This means donors should only use this provided address once to ensure proper processing.
2. Donated crypto assets are received by our affiliated 501(c)(3) tax-exempt charity, FreeWill Impact Fund (EIN: 86-1218871), which maintains cryptocurrency exchange accounts with Coinbase and Gemini.
   1. Note: Since the donation wallets/addresses are in the custody of centralized exchanges, examining the crypto transactions for any given donation address in a block explorer tool for example doesn't always tell you what has happened to a specific donation. Exchanges often leave the crypto in the wallet (or move it around as they wish) and use their existing USD reserves whenever crypto is sold by an exchange customer like FreeWill Impact Fund. They typically use internal ledgers to keep track of customers' assets so it's also not uncommon for them to mix different customers' assets in the same wallet.
3. Once donated crypto lands in the provided wallet address, FreeWill Impact Fund automatically converts the donated cryptocurrency to USD and emails donor a receipt for the donation.
4. FreeWill Impact fund issues a cash grant to the nonprofit beneficiary organization subject to our grantmaking policies and procedures.

When will nonprofits receive the proceeds?

We notify nonprofits of the incoming gifts and initiate an ACH transfer of the proceeds within 1-2 business days for any gifts once a $100 gift threshold is reached. If the gifts are less than $100, then the notifications and transfers go out monthly.

What will be the dollar value of the donation?

According to the IRS, it is up to the donor to determine the value of their gift. Some donors use the average market value of the asset on the day it was sent as the value. For more information on how to assess the value of your donation, please see the IRS guidelines for determining the value of donated property.

Fees

When sending crypto from one address to another, the sender (the donor), is responsible for covering the blockchain network-specific transaction fees. Note that we support many blockchains with low transaction fees.

While we don't charge any additional transaction fees, crypto exchanges will take their usual small fee when the donated crypto is converted to USD. When FreeWill Impact Fund issues cash grants to our nonprofit partners, the exchange fees are subtracted from that dollar amount.

See below links for more information on Coinbase and Gemini exchange fees:

• https://help.coinbase.com/en/exchange/trading-and-funding/exchange-fees
• https://www.gemini.com/fees/api-fee-schedule#section-api-fee-schedule

If you're planning on donating more than $500,000 USD worth of crypto, let us know about a week in advance. Depending on which cryptocurrency you're donating, we may be able to do an OTC trade with our exchange partners for a more favorable spread when selling large donations.

Accepted Cryptocurrencies

Since we've integrated with Coinbase and Gemini exchanges, this means we can process donations for any cryptocurrency supported by Coinbase and Gemini.

See the links below for more info on the accepted cryptocurrencies for each exchange:

• https://help.coinbase.com/en/prime/trading-and-funding/supported-cryptocurrencies-and-trading-pairs
• https://support.gemini.com/hc/en-us/articles/115005868106-What-cryptos-are-supported-on-the-Gemini-Exchange

IMPORTANT

When you send crypto assets using multiple blockchain networks, you need to confirm that you're using the correct supported network prior to initiating the transaction. You may permanently lose funds that are deposited to an unsupported network.

When using the dropdown in our donate cryptocurrency flow to select a coin/token you want to donate, we note the specific network in parenthesis.

Examples:

• If you choose "Ether (ETH-Base)", it means you will be creating a dedicated donation address for Ether (ETH) tokens on the Base network. When sending your donation to this address, you must make sure you are sending your Ether on the Base network.
• If you choose "USDC (USDC-ERC20)", this means you should be sending USDC on the Ethereum network (which uses the ERC20 token standard for tokens like USDC)

Potential Tax Benefits of Donating Crypto

Donating crypto directly to charity can save you money on two types of taxes:

1. Avoid paying any capital gains tax on your crypto gains.
2. Receive a federal income tax deduction for the full value of your crypto (state and local income tax deductions may also be available).

An alternative is to sell your crypto and donate the cash proceeds, but you would first owe capital gains tax on the appreciation, resulting in higher taxes for you and less dollars going to furthering the mission of the charity.

Tax Deductions for Crypto Donations

Crypto donations are generally considered by the IRS to be gifts of property (similarly to publicly-traded stocks). The process for claiming a tax deduction for crypto donations depends on the value of the deduction. If the value of your deduction is $500 or less, you can simply report the value of the charitable deduction on your annual income tax return filing.

If you have made a donation through Crypto for Charity and asked for a receipt, you should have gotten a donation receipt from FreeWill Impact Fund. Save this receipt in your records as support for the deduction you've claimed.

Amounts greater than $500

To claim a tax deduction for amounts greater than $500, you must file IRS Form 8283 along with your tax return for the year in which your gift was made. Form 8283 is where you will provide the IRS with certain details regarding your gift, which help establish your eligibility for the tax deduction.

You can access Form 8283 from the IRS with instructions at this link. If you need help completing the form, please speak with your tax professional.

Amounts greater than $5,000

If you are claiming a deduction for more than $5,000, you will also need to obtain a qualified appraisal of the donated assets, which establishes their value to the IRS. The appraiser will complete the "Declaration of Appraiser" contained in Part IV of your Form 8283.

There are a growing number of businesses that provide crypto appraisal services, such as Crypto Appraisers and Charitable Solutions. As of the time of this update, Crypto Appraisers has the lowest price at $120 for a single donation or $180 for multiple donations in a single calendar year, and the process should take 24-48 hours to complete.

Next, please send a copy of your partially completed Form 8283 by simply replying to the donation receipt email. Then an updated copy of Form 8283 with the completed "Donee Acknowledgment" will be sent back to you.

Amounts greater than $500,000

To claim a deduction for gifts valued above $500,000, the process requires that you file the appraisal report with your taxes (rather than simply keeping it for your records), so it could be more expensive to obtain.