Learn to use your crypto holdings to benefit faith-based organizations and causes.
So you've purchased crypto and want to understand your options for getting it into a church or other religious organizations' offering bucket. In this blog, we'll discuss how you can do that.
Many churches and religious organizations encourage tithes and offerings as an element of worship. A tithe is giving 10% of your gross income or resources to a religious institution or public charity.
Most churches have adapted to receive electronic payments of tithes and offerings. But what about more complex giving options, like stock, bequest, and crypto?
Crypto tithes and offerings are gaining popularity, and rightly so. When handled correctly, donating crypto to a church can be a quick and straightforward process.
It also may offer more significant tax advantages than conventional donations made with fiat money or debit cards. It's worth emphasizing that this benefit extends to all taxpayers, irrespective of their tax bracket since the IRS considers cryptocurrencies as capital assets, similar to real estate.
1. Sell your crypto, and tithe the resulting cash
There are three options for people looking to participate in cryptocurrency tithing.
The first option is to cash out and donate the proceeds to a nonprofit with tax-exempt status, which is the easiest way. However, this option may result in significant tax penalties.
That's because the IRS' internal revenue code views cryptocurrencies as property, not currency, and selling them for a net capital gain may incur capital gains tax. The tax rate for long-term capital gains can range from 0% to 20%, depending on your taxable income. If you hold your crypto for less than a year, you may be subject to income taxes instead.
While your tax advisor can help you navigate this complex tax situation, there is a more straightforward and tax-efficient way to donate your cryptocurrencies to non-profits.
2. Tithe directly to a religious organization
Donating your cryptocurrency directly to the church or other religious organization is the second and superior option. If your chosen recipient has set up an account with Engiven, you can easily make your desired gift of tithes or offerings through Engiven's elegant platform.
The gift provides a range of benefits for you, the giver. First, the gift is tax-deductible, just like any other gift of property. Secondly, you will not be required to pay capital gains or income tax on the proceeds since you are not selling the property.
There are several options for churches and religious organizations interested in accepting cryptocurrency gifts. They can manage their crypto wallet on an existing exchange or partner with another 501(c)3 organization. Otherwise, they can partner with a crypto donation platform like Engiven, which simplifies the process of accepting and managing crypto donations.
Once a tax-exempt organization has partnered with a crypto donation platform like Engiven, it is easy for the general public to send them donations. To tithe your crypto to an Engiven partner, follow these simple steps.
- Visit your church or religious organization's website, and find the Engiven crypto-giving widget.
- Once you've located it, select the currency you wish to donate and the amount.
- Enter your personal information. This step is optional but recommended to claim your crypto tax deduction. You'll receive a QR code and public address to send your crypto donation.
Engiven monitors the blockchain for verification and sends a donation receipt via email when it completes. Finally, Engiven exchanges the crypto you donated for USD and presents it to the selected nonprofit.
Although there are a few additional steps, the process is no more complicated than making a cash or credit card donation. You will receive the necessary tax paperwork to claim your deduction and maximize your tax benefits.
3. Tithe through Engiven.org
Let's say the church or religious organization you wish to gift tithes or offerings to hasn't set up an account with Engiven or any other crypto donation processing platform. Then what can you do?
The third option is Engiven.org. This new technology allows givers to pay tithes in crypto to up to 1.6 million different US nonprofits, including many churches and religious organizations, whether or not they have an account with Engiven. The only requirement for the nonprofit to qualify is current 501(c)3 status.
The transaction generates an instant IRS-compliant donation receipt and necessary tax documents, including a crypto appraisal, provided free of charge when required. Tithing through Engiven.org ensures that givers receive maximum tax credits toward their net earnings.
Additionally, Engiven.org meets SOC 2 Type 2 compliance, indicating the highest level of data and user security. That is why Engiven's methods are considered the fastest and safest available.
So how does it work?
The Engiven Foundation, a 501(c)3 fiscal sponsor, accepts the crypto donation, converts it to USD, and directly allocates the funds to the chosen church or religious organization. The process is highly automated, enabling the recipients to bypass the need for a crypto wallet and avoiding the lengthy verification process of establishing a crypto exchange account.
Engiven has handled some of the most significant crypto contributions, including a $10 million Bitcoin donation and a $15 million donation in 2022. Engiven is using its experience to allow crypto donors to donate to nearly any US-based nonprofit organization.
To tithe your crypto this way, follow these simple steps:
- Visit engiven.org
- Type the name of the church or religious organization you wish to tithe to in the search bar, and click the Search & Donate button.
- A list will populate below the search bar. Select the organization to which you wish to send your tithe, and click on the button that says Give Crypto.
- Enter the amount of your chosen crypto tokens that you wish to tithe, and enter your personal information. Once you've agreed to Engiven.org's terms of service, click on the button that says Next.
- A QR code will appear on the following screen with a public address. Use your crypto wallet to send your tithe or offering to that address.
- If you provided your email address on the previous screen, you'll receive a receipt in your email. Once you've completed the transaction in your crypto wallet, you may close the window.
As you can see, Engiven has uncomplicated giving crypto to the religious organization of your choice. That's our goal: making complex giving simple, and unlocking greater generosity.
Worship is and should remain the core motivation for tithing. That said, the possibility of reducing the amount of tax you owe on your upcoming tax return should be enticing. Who doesn't want to benefit charitable organizations while reducing their federal income tax?