Thursday, November 16, 2006

'TIS THE SEASON TO BE GIVING: NONPROFIT CHARITABLE GIVING CONTRIBUTIONS AND MORE

‘TIS THE SEASON TO BE GIVING:
NONPROFIT CHARITABLE GIVING CONTRIBUTIONS & MORE
by Pam Ashlund


Collecting donations for your nonprofit? As a financial manager (and those that imagine incorrectly that I’m a tax accountant or a CPA) I can’t tell you how often I’m asked about documentation for donors. Some want to know about receipts for cash gifts, the others how to value an in-kind gift. The first has concrete answers, the second has a few gray areas. But for all answers it’s one-stop shopping and must come from one source and only one source: the IRS.

So what follows are quotes from the IRS site, and links to the IRS site, not my personal opinion (because if you want my personal opinions then enjoy them, but don’t use them as a substitute for a tax specialist or a lawyer’s).

The IRS has a great round-up of nonprofit topics. From there you can drill down to: Tax Information for Contributors


For donors wanting to know how to claim a deduction for their contribution, you want: Publication 526; For charities wanting to know the requirements for charitable contributions substation and disclosure, look to: Publication 1771 (Rev. 7-2005) Charitable Contributions Substantiation and Disclosure Requirements


From Publication 1771:

There are two general rules that organizations need to be aware of to meet substantiation and disclosure requirements for federal income tax return reporting purposes:

  • a donor is responsible for obtaining a written acknowledgment from a charity for any single contribution of $250 or more before the donor can claim a charitable contribution on his/her federal income tax return
  • a charitable organization is required to provide a written disclosure to a donor who receives goods or services in exchange for a single payment in excess of $75

More on written acknowledgments and written disclosures is addressed in this publication.



NOT FOR CARS, PLANES OR AUTOMOBILES

On this topic, I will venture one opinion, exercise caution in this area, as the rules are very recent, very specific, and red-flag items for the IRS. The rules in this publication do not apply to a donated motor vehicle, boat, or airplane if the claimed value exceeds $500. For information on vehicle donations, see IRS Publication 4302 (Rev. 5-2006) (for rules that apply to the donee) and IRS Publication 4303 (2-2006) (for rules that apply to the donor).

For assistance about valuing donated property, see Publication 561.

AND NOW A WORD FOR A GOOD CAUSE
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1 comment:

Beth said...

Thanks for the thoughtful response! Very useful. Also, thanks for posting the widget too.