Why donor-advised funds are a powerful (and tax-advantaged) tool for crypto-based giving

Crypto has changed how people think about ownership, value transfer, and financial autonomy. It is also changing how people approach philanthropy.

For many donors – especially those holding appreciated crypto – donor-advised funds (DAFs) have emerged as one of the most flexible and powerful tools for charitable giving.

This article explains what DAFs are, how they work, and why they are particularly well suited for crypto-based philanthropy.

What is a donor-advised fund?

A donor-advised fund is a charitable giving account administered by a registered nonprofit sponsor. When you contribute assets to a DAF:

• You make an irrevocable charitable contribution
• You generally become eligible for an immediate tax deduction
• You can then allocate donations to qualified charities over time

In simple terms, a DAF allows you to separate the timing of the charitable deduction from the timing of the grant recommendation. You give now, lock in the tax benefit, and decide later which charities to support (and when).

Why DAFs are especially attractive for crypto holders

Donate crypto, get tax benefits

One of the most significant advantages of donating crypto through a DAF is tax efficiency. Capital gains are avoided because the asset is donated in-kind and never sold by the donor.

When you donate appreciated crypto directly to a DAF:

1. You avoid paying capital gains tax on the difference between your cost basis (purchase cost) and the current fair market value of the appreciated crypto asset.
2. You are eligible for a charitable contribution deduction, subject to deduction limitations, based on the fair market value of the crypto that is donated.
3. Donating the appreciated cryptoasset directly to charitable causes allows more of the asset’s value to go to charitable causes instead of taxes.

For long-term crypto holders, this can materially increase charitable impact compared to selling crypto and donating cash.

Support thousands of charities from a single account

DAFs are designed for flexibility. Most support a broad universe of U.S.-registered charities, one-time or recurring grants, and multi-year giving strategies.

Instead of coordinating separate donations, receipts, and records across many organizations, donors can centralize giving through one account and distribute funds over time.

Invest contributions while you plan your giving

Many DAFs allow donated assets to be invested after contribution but before they are granted out to charities. This means assets may continue to grow tax-free inside the charitable account, donors can take a longer-term, strategic approach to philanthropy, and market timing pressure is reduced. The growth maximizes the charitable impact.

For crypto-native donors accustomed to portfolio management, this investment flexibility is a natural fit.

Simplified recordkeeping and tax documentation

Charitable giving can become administratively complex, especially when donations span multiple assets and organizations.

DAFs simplify this by consolidating donation records, providing year-end tax documentation, and reducing paperwork and operational overhead.

This is particularly helpful for donors who contribute crypto, stocks, and cash throughout the year.

Flexible giving, without time pressure

With a DAF, there is no requirement to immediately distribute funds to charities. Donors can respond to urgent needs when they arise, plan grants around personal or market milestones, and build a long-term philanthropic strategy.

This flexibility aligns well with the volatility and opportunity cycles common in crypto markets.

Crypto has always been about more than financial innovation. It has been about expanding access, transparency, and global coordination. Donor-advised funds extend those principles into philanthropy by giving donors greater control, better capital efficiency, broader reach, and lower friction.

As crypto adoption grows, so does the opportunity to use digital assets not just as investments, but as tools for meaningful, long-term impact.

Crypto gains translating into lasting impact

Donor-advised funds are not new, but their relevance has increased significantly in a world where wealth is increasingly held in digital assets. For crypto holders who want to give thoughtfully, efficiently, and at scale, DAFs offer a proven and powerful framework.

As charitable infrastructure continues to evolve alongside crypto, understanding options like DAFs is an important first step toward maximizing both financial and social impact.

How to get started

The following are three established providers for consideration, if you’re looking to further explore DAFs:

Daffy

Daffy is a modern, low-cost donor-advised fund that makes charitable giving simple and accessible. With a $25 signup bonus, It lets you contribute crypto, stocks, or cash from its iOS app or web platform, then donate to nearly any 501(c)(3) public charity from local schools to global aid organizations, without triggering capital gains on appreciated assets or creating extra hassle for the over 1.7 million nonprofits supported. 

Endaoment

Endaoment is a nonprofit, technology-powered donor-advised fund that enables donors to give more efficiently and with greater flexibility, all onchain. It supports cash, crypto, and other complex assets, offers robust grantmaking tools, and focuses on modernizing charitable infrastructure through donor-centric design.

Givepact

Givepact is a donor-advised fund purpose-built for crypto philanthropy, enabling seamless, tax-efficient giving of digital assets. It is designed for crypto-native donors who want a streamlined way to support verified nonprofits while aligning charitable giving with onchain innovation and global impact.

Turning crypto philanthropy into global financial empowerment

Kraken’s mission is to accelerate the global adoption of cryptocurrency so that individuals around the world can achieve greater financial freedom and inclusion. At its core, this mission reflects a belief that open, accessible financial systems can expand opportunity, reduce barriers, and empower people who have historically been excluded from traditional finance.

Philanthropy plays a critical role in this vision by helping fund education, infrastructure, advocacy, and direct support for organizations working to build a more equitable global economy.

Donor-advised funds are an internationally available, uniquely powerful way for crypto holders to contribute to that progress. They enable tax-efficient giving of digital assets, support long-term and strategic philanthropy, and lower friction in how capital is deployed. DAFs allow crypto-native donors to turn innovation-driven wealth into sustained real-world impact.

In doing so, they help align personal generosity with our broader mission – using cryptocurrency not just as a financial tool, but as a catalyst for positive, global change.

This information is provided for general educational purposes only and does not constitute tax, legal, or accounting advice. Tax treatment depends on your individual circumstances and applicable laws. You should consult your own tax advisor or other qualified professional regarding your specific situation.