Photo by André François McKenzie on Unsplash

FJC Accepts Its First Donation of Cryptocurrency

In December, 2020 FJC accepted its first ever donation of Bitcoin, liquidating the asset through a leading Bitcoin exchange to generate over $56,000 in philanthropic resources for a Donor Advised Fund (DAF) account. 

The donor, who wishes to remain anonymous, was an early adopter of Bitcoin, having invested in the cryptocurrency in 2017.  A sophisticated investor who works in financial services, the donor was inspired to purchase his first Bitcoin for his family’s own investment portfolio after attending an industry conference. “At that early stage of the currency’s life cycle, I had to send a check to a post office box in California,” he recalls.  “It was a leap of faith.”  As the currency has matured and gained wider acceptance with institutional investors, including insurance companies, endowments and family offices, the donor has continued to maintain Bitcoin as part of his family’s overall investment portfolio.    

For Bitcoin enthusiasts who have benefitted from the increase in the currency’s value in recent years, the tax benefits for donating Bitcoins and other cryptocurrencies held for a year may be similar to appreciated stock.  (FJC does not give tax advice, so please consult your tax advisor).  This particular donor noted that following his year-end donation of Bitcoin to FJC in anticipation of the tax deduction, he purchased Bitcoin again in the new year in order to maintain the Bitcoin position in his portfolio.    

Upon donation, FJC worked with NYDIG, a leading financial services firm dedicated to Bitcoin, to exchange the currency for US dollars.  The donor expects to increase grantmaking from his family’s DAF to a variety of entrepreneurial organizations, with a focus on strengthening Jewish communal life and promoting deeper civic engagement in the United States.

“We hope this donation will be the first of many,” said Regina Rodriguez, FJC’s Chief Finance & Investment Officer. “We appreciate donors that come to us with ideas that push us into new territory.”

Private Home Transforms Public Library

FJC is home to imaginative donors that seek to go beyond donations of cash or appreciated securities to their Donor Advised Fund accounts. Take for example Georgette Bennett and Leonard Polonsky, whose family fund worked with FJC to transform a residential property in Aspen, Colorado into a portion of their $12 million grant to the New York Public Library. The family donated the Aspen property to FJC, which then sold the real estate, generating the proceeds that covered a portion of the grant. The grant to the Library in 2019 will support the creation of Polonsky Treasures Exhibition, a permanent display of rotating items from its extensive research collections, including an original copy of The Declaration of Independence, Christopher Columbus’ letter to King Ferdinand II advising him of his discovery in the New World, The Gutenberg Bible, and original sheet music from Beethoven and Mozart.

“FJC was completely supportive, cooperative and responsive throughout the complex process,” says Ms. Bennett. “We’re grateful that the team at FJC made it so easy for us.”