March 7, 2022

Caltech Now Accepts Gifts of Cryptocurrency

Caltech is pleased to announce that it can now accept donations of cryptocurrency for charitable purposes.

“As growing numbers of people own and use digital currencies, cryptocurrencies are becoming a fast and secure option for making charitable contributions,” says Dexter A. Bailey, Jr., vice president for advancement and alumni relations. “We want to make it convenient for interested crypto-donors to advance their philanthropic goals at Caltech.”

The Institute has partnered with The Giving Block to ensure a safe and secure experience for those who wish to make gifts of cryptocurrency. The Giving Block currently accepts more than 50 digital currencies, including the most popular versions, Bitcoin and Ethereum.

To make a gift of cryptocurrency, a donor simply needs to select the type of cryptocurrency they plan to donate; enter a donation amount; specify the area they want their gift to support; and provide a name and contact information. Each donor will receive a unique wallet address to complete the donation, and a receipt will be sent to the email address provided. (Caltech currently does not accept anonymous cryptocurrency gifts.)

What is cryptocurrency?

Cryptocurrency is decentralized digital money that is exchanged via a computer network, without the involvement of intermediaries such as banks or credit card companies. Ownership and transaction records are coded and stored securely in a communally maintained database based on blockchain technology, which collects transactions into groups, or “blocks.”

Bitcoin was the first established cryptocurrency, created in 2009 by a person or persons known as Satoshi Nakamoto. Estimates of the number of cryptocurrencies in circulation today range from 10,000 to 17,000. However, donations to Caltech are limited to the approximately 50 cryptocurrency options available through The Giving Block platform.

Why donate cryptocurrency?

For residents of the United States, giving cryptocurrency is a tax-efficient way to make a charitable donation. The IRS classifies cryptocurrency as a form of property for tax purposes. This means that donations of cryptocurrency to 501(c)(3) nonprofit organizations such as Caltech receive the same tax treatment as stocks. Although every donor’s situation is unique, making a gift of cryptocurrency is generally a non-taxable event, whereby the donor does not owe capital gains tax on the appreciated amount and may claim an income tax deduction.

“We want to make it convenient for interested crypto-donors to advance their philanthropic goals at Caltech.”
- Dexter A. Bailey, Jr.

What did Hal Finney (BS ’79) have to do with cryptocurrency?

The late software developer and Caltech alumnus Harold T. “Hal” Finney II (BS ’79) was one of the first to support the idea of digital currency. He learned about cryptocurrency from an online post in late 2008 and helped refine the security of the software by sending bug reports and recommending fixes to Bitcoin creator Satoshi Nakamoto. It is widely reported that Finney also received the first-ever Bitcoin test transaction, sent by Nakamoto in early 2009.

Finney, who died in 2014 of ALS (amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease), was an advocate for digital privacy. Earlier in his career, he was a key developer of PGP (Pretty Good Privacy), the world’s most-used encryption program for email. Forbes noted that Finney posted the following on the BitcoinTalk forum in 2013: “… I have always loved crypto, the mystery and the paradox of it.”