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What can donors deduct for attending fundraiser?

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What can donors deduct for attending fundraiser?

Our organization holds an annual fundraiser every year. If we are charged $50/per person for food and drink at the venue where the event is held, do donors have to deduct the full $50 from the charitable portion of their ticket price or can we make it less?

Only if you want to create problems for yourself.  The “Quid Pro Quo” rules generally provide that where a donor receives goods or services in return for a contribution, the donor may deduct only the amount of the payment that exceeds the fair market value of the goods and services received in return.  (See Ready Reference Page:  “Charities Must Set Value on ‘Quid Pro Quo’ Gifts”)

The tax rules require the charity to make a good faith estimate of the value of the goods and services received in return for the gift. The estimate is based on the value and not the cost.  If everything is contributed by a venue, you still have to estimate the value even though it cost you nothing. But the cost would normally be a floor on the estimate of the value. 

If you are paying more to the venue than it is worth, as a donor, I would really want to know why you are wasting my money by paying so much. Sounds to me like your donors should be reducing their contribution by at least $50 if that is what you are paying for it.

Tuesday, October 9, 2018

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