While cryptocurrency is a volatile asset, it has also created immense wealth for some individuals. Many of those investors want to tap into those appreciated assets to further their philanthropic goals.
As cryptocurrency has moved mainstream in recent years, institutional and high-net-worth investors have begun adding different types of virtual currency to their portfolios. While the factors driving this strategic shift vary—some see crypto as a means of diversification or an inflation hedge while others see it as a speculative investment or simply believe in the underlying technology—the trend appears poised to continue.
Nearly 7 in 10 American millionaires owns cryptocurrency, and 59% say they plan to add to their crypto allocation over the next five years.1 Moreover, 79% of family offices in the United States have a neutral-to-positive view of digital currencies.2
While cryptocurrency is a volatile asset, it has also created immense wealth for some individuals. Many of those investors want to tap into those appreciated assets to further their philanthropic goals. This can take several approaches, including using their crypto to give directly to charities or funding a charitable vehicle.
The wider nonprofit sector has already embraced digital assets, with high-profile organizations like the American Red Cross,3 the University of Pennsylvania,4 and more than one thousand others receiving crypto donations.
At Foundation Source, we’ve seen a meaningful uptick in questions about funding a private, non-operating foundation with crypto. But donating crypto to a private foundation is a complex transaction.