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FreeWill Acquires Cocatalyst As Donations Of Appreciated Assets To Nonprofits Surge

Addition to FreeWill’s offering to facilitate stock, crypto gifts
Enables concurrent launch of FreeWill’s Crypto for Charity platform

FreeWill, a social-good enterprise at the nexus of philanthropy and estate planning, announced that it has acquired Cocatalyst, a leading platform for donations of appreciated assets including, but not limited to, stock and cryptocurrency donations to nonprofit organizations. The Cocatalyst platform helps liquidate non-cash assets into cash that can be immediately added to nonprofits’ balance sheets. Terms of the transaction were not disclosed.

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The acquisition comes amid a sea change occurring as more donors are shifting their charitable giving behavior away from donating cash in favor of donating appreciated assets, such as stocks and cryptocurrency.

Stock giving volume has jumped in recent years, growing 62% from 2017 to 2018, but still accounts for just 7% of all individual charitable giving. According to Cocatalyst’s data science team, the average gift of stock was $11,771 for 2019 – the most recent year of complete IRS filings.

The driving factor behind this growth is that donors can give up to 37% more to the causes they love by donating appreciated assets, rather than selling those assets and donating the proceeds, because federal capital gains taxes are not owed on such donations. Such donors are also eligible to claim a federal income tax deduction for the full value of the donated assets.  However, a cumbersome administrative process for donating appreciated assets is currently a limiting factor that often prevents donors from completing gifts, leaving significant unmet demand.

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FreeWill is also immediately putting the acquisition to use through the launch of its new Crypto for Charity site, which allows donors to make cryptocurrency gifts to more than 55,000 U.S.-based nonprofits, effective . This helps mitigate the fact that more than 90% of nonprofits currently lack a crypto solution, despite growing needs. The Cocatalyst platform will support the new site by helping to receive and liquidate crypto donations, with the proceeds being received by the donors’ charity of choice.

“We’re tremendously proud as well as excited to make Cocatalyst part of our value proposition at FreeWill”, said Jenny Xia Spradling, co-CEO of FreeWill. “What their team has built as far as simplifying the complex process of donating appreciated assets is in complete alignment with our vision to help nonprofits tap into value in ways they previously could not by making all complex giving easy. We’re glad to realize these synergies immediately through the concurrent launch of Crypto for Charity and much more to come in the future.”

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Alex Chung, founder of Cocatalyst, added: “I’m thrilled that Cocatalyst can continue to grow within a team as high caliber as FreeWill. We took the idea from $0 to $4M in annual giving, and we see FreeWill’s commitment as a public benefit corporation will differentiate themselves as the leader in the charitable space for alternative forms of fundraising.”

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[To share your insights with us, please write to sghosh@martechseries.com]

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