Endaoment does not offer tax advice. Please consult a CPA or attorney for questions about your tax burden or potential deductions related to charitable gifts.
For investors holding cryptocurrency or stocks, donor-advised funds (DAFs) have emerged as a powerful philanthropic vehicle. DAFs allow donors to make charitable contributions, receive an immediate tax benefit, and recommend grants from the fund over time. Endaoment, a leading platform for charitable giving, enables donors to contribute various asset types to their DAFs, including cash, stocks, and cryptocurrency. This flexibility empowers donors to support their favorite causes while maximizing their tax advantages. As you consider how much you can contribute to a DAF at Endaoment, it’s essential to understand the deduction limits set by the IRS. While Endaoment itself does not impose an upper limit on contributions, knowing these limits can help donors maximize potential tax deductions, along with charitable impact.

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What Is a Donor-Advised Fund (DAF)?

A donor-advised fund (DAF) is a philanthropic tool that allows donors to make charitable contributions, receive an immediate tax benefit, and recommend grants from the fund over time. For investors holding cryptocurrency or stocks, DAFs have become an effective way to support charitable causes.

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Contribution Limits for DAFs

The IRS sets general rules for deductions of charitable gifts, including DAF contributions, which vary based on the type of asset being donated:
  • Cash Contributions: Donors can typically deduct up to 60% of their adjusted gross income (AGI).
  • Appreciated Securities and Cryptocurrency: The deduction limit is generally 30% of AGI.
Note: These limits apply to tax deductions, not the actual amount you can contribute. You can contribute any amount to your DAF at Endaoment, but tax deductions are subject to these AGI limits. Excess deductions can be carried forward for up to five years, allowing you to maximize your tax benefits over time.

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Tax Benefits of Contributing to a DAF

One significant advantage of contributing to a DAF is the potential for substantial tax benefits. Donating appreciated assets like stocks or cryptocurrency allows you to claim a tax deduction based on the asset’s fair market value at the time of contribution, helping you avoid capital gains taxes on the appreciation. For example, if you bought 1 Bitcoin for 5,000anditscurrentvalueis5,000 and its current value is 50,000, donating the Bitcoin directly to your DAF at Endaoment allows you to claim a 50,000taxdeductionwithoutincurringcapitalgainstaxesonthe50,000 tax deduction without incurring capital gains taxes on the 45,000 appreciation.

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How to Contribute to Your DAF at Endaoment

Contributing to your DAF at Endaoment is simple and flexible. Here’s how to get started:
  1. Sign In: Sign in to the platform with your email, social media account, or cryptocurrency wallet.
  2. Create a Fund: Navigate to the ‘New Fund’ section and initiate the creation of your DAF.
  3. Contribute Assets: Endaoment accepts a variety of assets. For a detailed list of accepted assets, please refer to the Accepted Assets Documentation. You can contribute:
    • Cash (via credit card or bank transfer)
    • Cryptocurrency (Bitcoin, Ethereum, and other major tokens)
    • Stocks and other appreciated securities
After selecting the asset type and specifying the contribution amount, complete the transaction to add the assets to your DAF. From there, you can recommend grants to your favorite 501(c)(3) organizations. For more information on how to make grants, refer to the Grant Recommendation Process.
Ready to maximize your charitable impact? Create your donor-advised fund at Endaoment today and experience the power of strategic giving. Our platform simplifies the contribution process, enabling easy donations of cash, stocks, or cryptocurrency. If you have questions or want to learn more, request a demo with our expert team and discover how Endaoment can help you achieve your philanthropic goals.