I'm the new treasurer of a local 501(c)(3) youth sports league. The former treasurer never sent out donation letters to people who donated in the past. Can I send out a generic letter and have each participant fill in their name and donation amount, or do I need to produce individualized letters? Also, what is tax-deductible? We collect a $395 registration fee per player to support the costs of running the club. Do we need to put a value on the service rendered (playing time in the league) with that amount not being tax deductible, or is the whole registration fee tax deductible?
We seem to get this question in one form or another almost every week. If a child has to pay $395 to “support” the club in order to participate, that is the price of participation, and not a contribution. Your former treasurer had no reason to send out donation notices for payment of the price of admission.
If someone contributes without expectation of anything in return, and if that contribution is $250 or more, the donor is required to have a contemporaneous acknowledgement of the contribution from the organization when filing the tax return on which the charitable contribution deduction is claimed. That must be an individualized letter that states the amount of the donation, whether any goods or services were received in return, and if so, the value of such goods or services. (See Ready Reference Page: "IRS Requires Substantiation of Contributions")