You are the chief fundraiser for your charitable organization. Your year-end solicitation is out the door and results are rolling in. You’ve celebrated your team’s success and everyone has bought into next year’s goals. What next?
December is a great time to review your development plan to ensure your fundraising and stewardship activities don’t hide inadvertent tax or legal consequences for your donors or your organization. Why you? By focusing on understanding your donors’ needs, you just might catch things that others on your team could miss.
Here are a few places to look to make sure you’re getting your donors what they need so that they get the most from their support of your mission, and neither of you end up in hot water with the IRS.
PART ONE: GIFT ACKNOWLEDGMENT PROCESSES
You’re a great fundraiser, so you know what a great acknowledgment letter looks like. You’ve coached your team to personalize, convey impact, and tell a compelling story that leaves the reader wanting more. But if your letter doesn’t meet IRS requirements, it won’t do your donor much good when they try to claim a deduction for that gift. Here’s a quick review:
For gifts of $250 or more, your donor needs a contemporaneous (think “timely”) written acknowledgment that includes the name of the organization, the amount of the gift (if cash or equivalent) or description but not the value of a non-cash gift, the date of the gift, and a statement that no goods or services were provided by the organization (as long as that’s true).
For a gift of $75 or greater in which something was exchanged for the gift, the written acknowledgment must contain a statement to that effect, with a good faith estimate of the value of what was exchanged. One common scenario is a receipt for a ticket to your annual gala, in which the donor paid $250, and the fair market value of their dinner is $75.
This is a blog post with general information. It is not actually legal advice. If you need legal advice, call us at 206.456.2579 to set up a meeting.
Next up: GIFT ACCEPTANCE POLICIES