USDCrypto Donations Bolster LA Wildfire Relief Efforts
Nonprofits Leverage Cryptocurrency to Aid Victims
Wildfires have devastated Los Angeles, California, with over 27,000 acres scorched and more than 100,000 residents forced to evacuate. The Palisades Fire, the largest blaze, erupted on January 7 and has already consumed over 17,000 acres, remaining completely uncontained.
Another blaze, the Eaton Fire, flared up the same evening, prompting the evacuation of 40,000 individuals. Three additional wildfires have since ignited, compounding the crisis. These fires have claimed at least five lives, injured numerous others, and led President Joe Biden to describe the situation as “devastating,” underscoring the immediate need for aid.
In response, nonprofit organizations have turned to cryptocurrency as a means to amplify their disaster relief efforts. The Giving Block, a prominent crypto donation platform, launched an emergency response fundraiser to channel resources toward seven nonprofits, including the Los Angeles Fire Department Foundation, the Regional Food Bank, and First Responders Children’s Foundation. This initiative allows donors to contribute in cryptocurrencies like Bitcoin and Ethereum or through traditional methods like stocks and donor-advised funds (DAFs).
Other platforms, such as Givepact, are also facilitating crypto donations to organizations like Baby2Baby and the California Fire Foundation. These platforms aim to leverage the efficiency and global reach of decentralized finance to address the urgent needs of wildfire victims, offering an alternative to traditional donation methods.
Crypto Philanthropy Gains Traction with Tax Incentives
Cryptocurrency donations are gaining momentum among charitable organizations, with over half of the top 100 U.S. charities now accepting digital assets. Platforms like Fidelity Charitable, which accept Bitcoin, Ethereum, and Litecoin, have reported a significant increase in crypto contributions. Similarly, DAFgiving360 noted that 63% of its donations in fiscal year 2024 came from non-cash assets, including digital currencies.
Tax benefits are a key driver behind this trend. Donors can avoid capital gains taxes on appreciated crypto assets by donating directly to nonprofits, all while claiming a charitable deduction if they itemize their taxes. Andrew Gordon, a tax attorney and president of Gordon Law Group, highlighted this advantage, explaining how donors who gift crypto held for over a year can deduct its fair market value, with a cap of 30% of their adjusted gross income. These benefits, combined with Bitcoin and other cryptocurrencies reaching near-record highs, make digital giving an appealing strategy for individuals and organizations alike.
As Los Angeles grapples with the aftermath of these catastrophic wildfires, the integration of cryptocurrency into relief efforts underscores the evolving landscape of philanthropy. By harnessing digital assets, nonprofits are not only expanding their donor base but also expediting the delivery of critical resources to communities in desperate need.
This article has been refined and enhanced by ChatGPT.
