B Charitable Lays Foundation for IRS-Backed Crypto Donations With Simplicity in Mind

B Charitable, one of the industry’s few charitable giving platforms that harnesses the tax advantage of a charitable contribution and combines that with smart technology, crowdfunding campaigns, low fees, performance tracking, and tax-free investment growth, helps give individuals an opportunity to proactively donate appreciated assets.

Its latest development adds the ability for users to make donations in stocks or crypto by simply clicking the “Donate Crypto” on their dashboard.

With most P2P crowdfunding platforms, funds received are not considered to be ‘charitable contributions’ for IRS-reporting purposes – even if that person intends to use those funds for charitable purposes, says Jonathan Shugart, founder and president of B Charitable.

Shugart, a former tax attorney, spent five years of his private practice helping higher net worth individuals with their estate planning and business planning needs. In advising clients, discussions about how individuals could navigate charitable giving were limited to some of the wealthier clients, and unfortunately, not accessible to the majority of generous people.

“I truly believe that people intrinsically want to help others,” he said. “It’s in our nature, so I asked myself what it would look like if we created a tool that made that easier; a tool that equipped others to be charitable” – in this case, a proactive approach, rather than a reactionary step that many often find themselves in.

According to Shugart, two issues that B Charitable has spent considerable time exploring is how they can “eliminate/minimize the effect of fluctuation of the value of crypto” as well as “providing a personalized experience for each transaction with prompt, proper reporting, while at the same time minimizing the time/effort that a donor is required to expend on that process.”

As a donor advisory fund (DAF), the platform allows for its donors to retain “advisory privileges” that help speak to the distribution of those funds. Specifically, it enables users to donate crypto to any IRS-recognized public charity of their choice, which ultimately, helps them avoid capital gains tax due to their ‘DAF’ status.

As a DAF, we can only make distributions to charitable entities, which is why donors are able to take that charitable contribution deduction when they put their money into a DAF, Shugart emphasized.

Shugart says that while some tax-exempt entities do allow for the donation of the crypto, most of the charities out there are “not necessarily tech forward.”

We believe our process is the most streamlined, and instead of trying to reinvent the wheel, charities can send donors to our platform if they want to contribute crypto, he told CoinQuora.

So how does it work?

B Charitable is able to receive crypto contributions on the blockchain and then subsequently convert it to something that the charities can use, such as fiat, and then distribute it to the charities upon the donor’s grant request. In other words, the donor isn’t required to convert the crypto into cash themselves.

With cryptocurrency becoming more attractive for philanthropic efforts, platforms such as B Charitable have become increasingly necessary and crucial in the past week to help provide the appropriate resources and support to those subjected to the conflict in Ukraine.

On Wednesday, B Charitable announced its partnership with YouTube influencer Andrei Jikh, who is known for creating financial-awareness related content about the stock market, investment, and motivation.

Jikh, who has over 1.7 million subscribers to his YouTube channel, grew up in a family of circus performers from Russia and moved to the U.S. when he was nine when his dad got a job with Cirque du Soleil.

In the wake of the ongoing Russia-Ukraine conflict, Jikh recently created a campaign supporting “Save the Children,” a non-profit with efforts supporting the current conflict in Ukraine, where he has agreed to match 100% of the first $10,000 donations.

It’s worth mentioning that crypto-enthusiasts need to understand the tax advantages that DAF’s like B Charitable are able to take advantage of.

“If you donate an appreciated asset, instead of selling it and then donating the proceeds of the sale – you do not have to pay income tax on selling the asset, and neither does the charity,” Shugart explains.

Additionally, he says that individuals also have the ability to make charitable contributions to a donor advised fund in the year they need that charitable contribution deduction, even if they don’t necessarily distribute it to the charities of their choice until a later period of time.