ASU Foundation now accepting cryptocurrency gifts
The ASU Foundation for A New American University is now accepting cryptocurrency options as a philanthropic payment method.
The nonprofit fundraising arm of Arizona State University can accept more than 90 different cryptocurrencies from donors, which will enable them to connect with a broader range of donors.
"We recognize that millennials and Gen Zers, some of which are ASU alumni, want to be able to facilitate gifts in the form of cryptocurrency," said Samuel Michalove, director of investment strategy and portfolio management for ASU Enterprise Partners, parent organization to the ASU Foundation. "We're open for business and want to be able to engage in a new way with individuals and facilitate the ways they want to give."
ASU donors could already give through a variety of options beyond cash, including stocks, bonds, fine art, real estate, closely held companies and life insurance. The additional giving option enables the foundation to accept assets donors have and want to give.
“We have to be forward-thinking about alumni and new ways in which we can engage with them," said Jazmin Medina, ’09 BS, principal of NewView Capital and ASU Foundation's Next Generation Council member. "This is what we strive to do as members of the Next Gen Council — find meaningful ways to connect with alumni and to make their experience donating as seamless and easy as possible."
The Next Generation Council was instrumental in adding cryptocurrency options. Members are successful entrepreneurial alumni who graduated since 2002 and are looking to create ways for fellow alumni to engage in meaningful ways.
"Crypto has changed the world in so many ways since I bought my first Bitcoin a decade ago," said Daniel McAuley, ’09 BS, data scientist for Instagram and a member of the Next Generation Council. "Making it easy for alumni to donate their crypto wealth will help the ASU Foundation to continue that trend. I also think it's a strong signal to younger alumni that ASU sees where the world is going and can be entrusted to put their capital to work in shaping it."
When donors give cryptocurrency to the ASU Foundation to support ASU students, research and programs, the currency is transferred through Coinbase, a third party that facilitates the transfer on behalf of the foundation. The foundation acknowledges the currency and quantity of the currency that transferred.
Cryptocurrency is treated as a property asset under Internal Revenue Services tax code. There are some suggestions that it is like publicly traded stock, which is also property under the IRS guidelines; however, when it comes to tax deductions, it is more like real estate, art or privately held companies, said Brian Nielson, estate and planned gift adviser for the ASU Foundation.
"The amount and how and when it was acquired all affect the potential deduction and documentation requirements," he said. "Because it is a new type of asset, the laws and IRS forms haven’t fully caught up. The foundation can help navigate the requirements for donors who would want a charitable tax deduction."
Other benefits may include a reduction in capital gains taxes.
"Like publicly traded stock, donors can potentially avoid paying capital gains taxes if their cryptocurrency was acquired as an investment, has been held for more than a year and is donated as cryptocurrency directly to a charitable organization such as the ASU Foundation," Nielson said.
Cryptocurrency is not widely used for settling transactions that can be settled by other means, said Dragan Boscovic, ASU computer science professor and director of the Blockchain Research Lab.
"People are still very used to using credit cards, sending wires or just paying in cash. Nevertheless, there are certain benefits to paying by cryptocurrency," he said. "It's more instantaneous, you do not pay a high transaction fee and it's used globally so you don't have to exchange your dollars to make international payments."
Accepting cryptocurrency for philanthropy purposes may lead to other partnerships for ASU that would enable the university to participate in a blockchain network and receive utility tokens in exchange for participating in various network activities, Boscovic said.