You've been holding crypto for a while. Maybe Bitcoin, maybe Ethereum, maybe something else entirely. The value has gone up, possibly by a lot. And now you're thinking: what if some of these gains could actually do some good?
The good news: donating cryptocurrency to charity is not only possible, it is one of the most tax-efficient ways to give. The better news: it's a lot simpler than it sounds. This guide walks you through everything you need to know, including why a donor-advised fund (DAF) like Daffy is the smartest way to do it.
What Does It Mean to "Donate Crypto"?
Donating crypto means transferring digital assets directly to a qualified charitable organization or a donor-advised fund, instead of selling it first and donating the cash proceeds. This distinction matters enormously for your taxes.
The IRS treats cryptocurrency as property, not currency. That means when you sell appreciated crypto, you owe capital gains tax on the difference between your purchase price (cost basis) and the sale price. But when you donate it directly to a 501(c)(3) organization or DAF, that capital gains tax disappears entirely. You also get to deduct the full fair market value of the donation on the day of transfer — as long as you've held the asset for more than one year.
Example: You bought 1 ETH for $500. It's now worth $3,000. If you sell it, you owe capital gains tax on $2,500. If you donate it directly, you pay $0 in capital gains — and can deduct the full $3,000. You can also split the difference: sell a portion to pocket some gains and donate the rest, you'll only owe capital gains tax on the portion you sold.
This combination — no capital gains tax plus a full fair market value deduction — makes donating appreciated crypto one of the most powerful charitable giving strategies available. And yet most crypto holders have never done it.
Why Most Crypto Holders Haven't Donated Yet
If the tax benefits are this compelling, why isn't everyone doing it? A few reasons come up consistently.
- Most charities don't accept crypto directly. Donations in Bitcoin aren't yet standard. The majority of nonprofits aren't equipped to receive, hold, or liquidate digital assets, and the ones that are often only accept a handful of tokens.
- The process can feel complicated. Wallet addresses, blockchain confirmations, tax documentation, qualified appraisals — for a first-timer, the mechanics can be intimidating enough to stop you before you start.
- There's no clear starting point. Unlike donating cash or writing a check, there's no universally understood workflow for crypto giving. Most people just don't know where to begin.
This is exactly the problem a donor-advised fund like Daffy solves.
What Is a Donor-Advised Fund (DAF)?
Think of a donor-advised fund as a charitable giving account — a bit like a 401(k), but for philanthropy. You contribute assets (cash, stock, or crypto), receive an immediate tax deduction, and then make donation recommendations out to the charities of your choice on your own timeline.
The big advantages of using a DAF for crypto giving:
- You get the tax deduction the moment you contribute, not when you eventually donate the money out to a charity.
- Your funds are invested and can grow tax-free while you decide where to give.
- You can donate to nearly any of over 1.7 million U.S. charities, including schools and religious institutions, not just the few charities that accept crypto directly.
- All your giving records are in one place come tax season.
DAFs have traditionally been tools for ultra-high-net-worth donors, with high minimums and percentage-based fees that made them inaccessible for most people. Daffy was built to change that.
The Tax Benefits
Here's a summary of what you stand to gain from donating appreciated crypto through a DAF like Daffy, versus selling it first and donating cash:
- No capital gains tax. When you donate crypto held for more than one year directly to a DAF, you owe zero capital gains tax on the appreciation.
- Full fair market value deduction. You deduct the asset's value at the time of contribution, not what you originally paid for it.
- Immediate deduction, flexible giving. You lock in the tax deduction the year you contribute, but you can recommend donations to charities over months or years.
- Organized tax documentation. Daffy provides consolidated tax receipts in a PDF or CSV, so there's no scrambling for receipts come April.
See the numbers for yourself. Crypto donations mean more tax savings for you and more money for charity. Estimate your tax savings with our Crypto vs. Cash Donation Calculator.
Why Daffy Is the Easiest Way to Donate Crypto
Daffy was built from the ground up as a modern, technology-first DAF. That means the experience of donating crypto is fundamentally different from going through a traditional institution.
- Over 300 Supported Cryptocurrencies: Once you're a member, you can contribute Bitcoin, Ethereum, and over 300 other cryptocurrencies to your DAF account. In 2025, Daffy saw over $48 million in crypto contributions. The process only takes a couple of minutes — you can follow our step-by-step guide to get started.
- Open in Minutes: You can open a Daffy account and contribute crypto in the same session. There's no paperwork, no waiting for approval, and no minimum contribution threshold to clear before getting started.
- Flat-Fee Pricing That Doesn't Punish Generosity: Traditional DAFs like those offered through Fidelity or Vanguard typically charge a percentage of assets under management — meaning the more you give, the more you pay. Daffy charges a flat monthly membership fee starting at $3/month for individuals, regardless of how much you contribute. For donors with substantial assets, this difference can be dramatic. As one headline put it: "Vanguard is 13x more expensive."
- Available 24/7 — Including Year-End Deadlines: Crypto markets never close, and neither does Daffy. Some of the largest crypto contributions we’ve seen on Daffy come in on December 29, 30, and 31, because donors can act on tax decisions the moment they make them, even over a holiday weekend.
- Trusted Partnerships: Daffy's partnership with Robinhood allows Robinhood customers to easily donate crypto directly from their accounts to over 1.7 million charities across the U.S. — without ever leaving the Robinhood interface. It's a signal of how quickly crypto giving is becoming a mainstream option, and how Daffy is positioned at the center of it.
- Crypto Portfolios: Once you contribute crypto to Daffy, your funds don't just sit in a waiting account. You can choose to invest in a crypto portfolio — holding pure crypto assets at Coinbase Institutional — or a diversified crypto index from Bitwise Investments, alongside other standard and ESG investment options. Your charitable capital can continue to grow until you're ready to donate.
Donating Crypto: Without a DAF vs. With Daffy
| Without a DAF | With Daffy ✨ |
|---|---|
| Most charities do not accept crypto donations. | We accept Bitcoin, Ethereum, and 300+ other cryptocurrencies. |
| Liquidating crypto before donating triggers capital gains tax. | Contribute crypto directly — no capital gains tax, and you deduct the full fair market value. |
| More time spent coordinating if you want to support multiple charities. | Contribute crypto once and easily distribute the proceeds to multiple charities. |
| Limited flexibility in your tax-saving strategy. You can't bunch donations in a high-income year and give over time. | Bunch your giving to maximize deductions in a high-income year and donate to charities on your own timeline. |
| You have to handle all receipt tracking manually. | We keep all your donation receipts in one place. |
How to Donate Crypto Through Daffy: Step by Step
- Create a Daffy account. Go to daffy.org or download the Daffy iOS app. Membership starts at $3/month for individuals.
- Choose your portfolio. Select how you want your contributed funds invested including standard, ESG, or crypto portfolio options.
- Contribute your crypto. Select "Add Funds," choose your cryptocurrency, and follow the prompts to transfer from your wallet. Daffy supports 300+ tokens.
- Receive your tax documentation. Daffy will issue a tax receipt for your contribution.
- Donate to your favorite charities. Search from over 1.7 million U.S.-based nonprofits, and recommend donations at any time, from the Daffy app or website.
Frequently Asked Questions
Can I donate crypto directly to a charity?
Some charities accept crypto directly, but the majority do not. More importantly, donating directly to a charity — rather than through a DAF — means your giving is locked into that one organization. A DAF lets you make a single contribution and then distribute it to any charity you choose, at any time.
How is the tax deduction calculated for crypto donations?
The IRS allows you to deduct the fair market value of the cryptocurrency on the date of the contribution, provided you've held it for more than one year. For donations exceeding $500, you'll need to file IRS Form 8283. For donations exceeding $5,000, a qualified appraisal may be required. Your tax advisor can confirm the documentation needed for your specific situation.
What cryptocurrencies does Daffy accept?
Daffy accepts Bitcoin, Ethereum, and over 300 additional cryptocurrencies — every token supported by Coinbase. See the full list of crypto supported on Daffy.
Do I need to sell my crypto before donating?
No, and selling first would actually cost you money. When you sell appreciated crypto, you trigger a capital gains tax event. By contributing crypto directly to Daffy, you avoid that tax entirely and can still deduct the full value.
Is there a minimum amount I need to donate?
Daffy is designed to be accessible to donors at all levels. There is no minimum contribution required to open an account and begin donating crypto.
What happens to my crypto after I contribute it to Daffy?
After you contribute crypto to Daffy, it is liquidated and the funds are invested in the portfolio you select — which can include a crypto portfolio held at Coinbase Institutional. The funds grow tax-free until you recommend donations to charities.
How is Daffy different from Fidelity Charitable or Schwab Charitable?
The differences are significant, especially for crypto donors. Fidelity and Schwab offer very limited cryptocurrency support — primarily just Bitcoin and Ethereum — and neither allows you to invest in crypto portfolios. Traditional DAF providers also charge percentage-based fees that scale with your assets and often carry high minimums. Daffy, by contrast, accepts 300+ cryptocurrencies, offers dedicated crypto investment portfolios, and charges a flat monthly membership fee starting at $3/month — making it far more accessible and flexible for the modern crypto donor.
Start Giving Smarter
Donating crypto isn't just for the ultra-wealthy or the especially philanthropic. If you hold appreciated digital assets, you're already sitting on one of the most tax-efficient charitable giving tools available — you just haven't used it yet.
Daffy makes the first step simple. Open an account, contribute your crypto, and let your charitable dollars work — for the causes you care about, on a timeline that works for you.
Ready to get started? Open your Daffy account today.
Please note that the information contained on this page is for educational purposes only and should not be considered tax or investment advice. Any calculations are intended to be illustrative and do not reflect all of the potential complexities of individual tax returns. To assess your specific situation, please consult with a tax and/or investment professional.