Crypto Staking: A Guide for Nonprofits and Donors
Understand how crypto staking works, benefits for nonprofits, tax advantages for donors, and partnership opportunities for Web3 platforms.
What is Crypto Staking?
Crypto staking is a process where cryptocurrency holders participate in supporting the security and operations of Proof-of-Stake (PoS) blockchains by “locking up” crypto assets in the network. In exchange, participants earn rewards in the form of additional crypto assets, similar to earning interest in a savings account. Popular reward-yielding cryptocurrencies include Ethereum (ETH) and Solana (SOL).
How Do Crypto Staking Reward Donations Work?
Crypto staking donations enable donors to redirect the rewards earned from staking to nonprofits without donating the original principal:
- Stake Crypto Assets: The donor stakes cryptocurrency through an exchange or staking platform.
- Earn Rewards: Staked assets continuously generate staking rewards.
- Direct Rewards to Nonprofits: Rewards are automatically or periodically sent to nonprofits through smart contracts or integrated platform features.
- Principal Remains with Donor: The initial staked assets remain under the donor’s ownership, untouched and secure.
Innovative Fundraising Opportunity for Nonprofits
Billions of dollars worth of crypto staking rewards have been issued to date, presenting an enormous opportunity for nonprofits. Here are three benefits for nonprofits:
- Delivers New Recurring Donation Stream: Staking generates a steady stream of income, providing nonprofits with predictable and sustainable funding.
- Attracts Tech-Savvy Donors: Engaging with crypto donors diversifies funding sources and taps into the growing cryptocurrency community.
- Unlocks Innovative Fundraising Opportunities: Nonprofits can create unique campaigns focused specifically on crypto staking donations, appealing to a new demographic of young donors.
Revolutionize Your Fundraising Strategy!
Book a free strategy session with our team to explore how staking rewards can unlock a new stream of recurring revenue for your mission.
Tax Advantages for Donors
Donating staking rewards directly to nonprofits offers notable tax benefits:
- Avoid Capital Gains Tax: Directly donating staking rewards helps donors avoid paying capital gains taxes.
- Tax Deductions: Donors may claim charitable deductions for the fair market value of donated crypto staking rewards, reducing their taxable income. (Always consult a tax professional.)
Maximize Your Impact!
Donate your staking rewards to a cause you care about and enjoy the potential tax benefits of giving appreciated assets.
Philanthropic Opportunities for Web3 Staking Platforms
Web3 platforms offering crypto staking can significantly enhance user experience and social impact by partnering with philanthropic organizations:
- Embedded Philanthropy: Allow users to seamlessly direct their staking rewards to their preferred nonprofits, enriching user satisfaction and engagement.
- Increased User Retention: Integrating social good into the platform can attract and retain users interested in socially responsible investing.
- Enhanced Market Position: Demonstrate platform innovation and leadership in combining decentralized finance (DeFi) with philanthropy.
Build Impact into Your Project!
Connect with our partnerships team to integrate staking-based donations and offer your users a way to give back, right on your platform.
Turn Staking Rewards into Crypto Donations
Already accepting crypto donations with The Giving Block? Let’s take it a step further.
Connect with our team to explore integrating staking donations into your fundraising plan.
