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.
3. Once donated crypto lands in the provided wallet address, FreeWill Impact Fund automatically converts the donated cryptocurrency to USD and emails the 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.

Why doesn't the donated crypto go directly to the nonprofit?

We built our solution so that nonprofits don't have to worry about transacting with crypto, since many nonprofits don't want the additional overhead of maintaining crypto wallets and exchange accounts.

In the future, as most nonprofits become more comfortable with crypto transactions and prefer to hold the donated crypto, we can adjust our solution accordingly.

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 gifts exceeding the $100 threshold. 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.

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://exchange.coinbase.com/assets
• https://support.gemini.com/hc/en-us/articles/115005868106-What-cryptos-are-supported-on-the-Gemini-Exchange

IMPORTANT

Many cryptocurrencies exist on various blockchain networks in addition to their own "native" networks. For example, Bitcoin can exist on the Bitcoin network or it can be "bridged" to other networks like Ethereum, Base, Solana, etc.

When you donate crypto assets that can exist on multiple blockchain networks, please confirm from which network you intend to send, and ensure that you select the same network in the "Choose a coin" dropdown where we note the network in parenthesis.

Example:

If you choose "Bitcoin (BTC-BASE)" in the coin dropdown, it means you will be creating a dedicated donation address for Bitcoin (BTC) on the Base network.

When sending your donation to this address, you must make sure you are sending the Base version of BTC.

You may permanently lose funds that are sent to the wrong network.

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 if held for a year or more. If not held for a year or more, the deduction is limited to cost basis (or value, if lower). 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.

After completing your crypto donation, 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. If your gift was $250 or less, you don't necessarily need this to claim a deduction but it's recommended to always save it.

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.

Note that FreeWill Impact Fund needs to complete Part V of the Form 8283, so 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 $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 is a growing number of businesses that provide crypto appraisal services, such as Crypto Appraisers and Charitable Solutions.

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.