Isaac emphasized the review requirement. That is a great point. All proposed NFT donations should require a formal review by the Gift Acceptance Committee if you want to accept them at all.
Many charities will only accept the proceeds from the sale of an NFT. Here is example language from Save the Children: "We accept the proceeds from an NFT sale once converted to a cryptocurrency such as ETH."
As for your original question regarding valuation, that is the donors' job. The IRS regards NFTs as property donations requiring an appraisal and an 8283.
An article linked below from last July explains how difficult it is to get these valued for deduction purposes. That discussion is in the second half of the article. Also, note the suggestion regarding selling the NFT and then donating the proceeds:
When I write gift acceptance policies, I discuss these in a similar light as closely held stock. You must set aside the fact they may suggest a high value. I think your concern needs to be about your ability to liquidate the gift. These gifts should not be evaluated solely on the premise that they might increase your campaign total. What value are they to the institution? Typically, they have no immediate value. You need to sell them for them to be of any use!
Here is my suggested policy language:
"XYZ does not recognize these as assets and has no method for managing donated NFTs. It is also questionable that a donated NFT would be used for mission-related purposes. However, receiving and immediately selling an NFT during a charity auction is possible.
"Therefore, XYZ will not accept an NFT without conducting a formal review by the GAC."
John
John H. Taylor
Principal
John H. Taylor Consulting, LLC
2604 Sevier St.
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