Question: We gave a fundraising concert at a patron's home. We charged $250 for a ticket, and everything was donated except the cost of the performers. Can we tell people their entire contribution was tax-deductible?
Short Answer: No. You can give event-goers a receipt, with a statement like: “Musical entertainment with a value of $50 was provided in return for this contribution.”
Here’s the overview of the different jurisdictional laws:
First, nonprofits are not required to give donors receipts for normal donations,
but are for most quid pro quo contributions. The Internal Revenue Code precludes the IRS from recognizing a taxpayer’s claimed deduction for any charitable contributions exceeding $250, if unaccompanied by a “contemporaneous written acknowledgment (CWA) of the contribution by the donee organization” [26 U.S.C. 170(f)(8)(A)].
A CWA is sufficient if it is obtained from the nonprofit prior to the taxpayer’s filing date and describes:
“The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution.”
So it’s not a problem to make the disclosure/quantification on a receipt after the event.
Here are some other general receipt discussions:
Your solicitations to the event in NY are supposed to carry this notice (many nonprofits do not do this, however.) Also FYI, here’s a bill pending to prevent profit-making off of any post-sale charitable event tickets: The notice in the invite “must be placed conspicuously in the material with print no smaller than ten point bold face type”. Here’s part of this NY section on solicitation. § 174-b.
Solicitation. 1. Any solicitation, by any means, including but not limited to oral solicitation, by or on behalf of a registered charitable
which is required to file financial reports
pursuant to this article and has filed all such reports, shall include
therein a statement that upon request, a person may obtain from the
organization or from the attorney general, a copy of the last financial
report filed by the organization with the attorney general. Such statement
shall specify the address of the organization and the address
of the attorney general, to which such request should be addressed and
in the case of a written solicitation, must be placed conspicuously in
the material with print no smaller than ten point bold face type or,
alternatively, no smaller than the size print used for the most number
of words in the statements. Provided, however, such statement need not
be made where the space for a printed advertisement or promotional time
in any media has been donated or made available to the charitable
organization at no cost and such space or time does not reasonably
permit inclusion of such statement.
2. Any solicitation used by or on behalf of any charitable organization
shall provide a clear description of the programs and
activities for which it has requested and has expended or will expend
contributions or shall include therein a statement that, upon request, a
person may obtain from the organization such a description. If the
solicitation is by an institution subject to article five-A of the
not-for-profit corporation law, and is for an endowment fund, the
solicitation must include a statement that, unless otherwise restricted
by the gift instrument pursuant to paragraph (b) of section five hundred
fifty-three of the not-for-profit corporation law, the institution may
expend so much of an endowment fund as it deems prudent after
considering the factors set forth in paragraph (a) of section five
hundred fifty-three of the not-for-profit corporation law.
3. In addition to any other disclosure required by law, any
solicitation by any means by a professional fund raiser or professional
solicitor on behalf of a charitable organization required to be
registered pursuant to this article shall clearly and unambiguously
(a) the name of the professional
fund raiser as on file with the attorney general and that the solicitation is being conducted by a
professional fund raiser
(b) the name of the individual professional solicitor as on file with
the attorney general and that the individual is receiving compensation
for conducting the solicitation.
NYS doesn’t appear to have a preference on timing of quid pro quo disclosures. However, this is because you won’t have to list the quid pro quo ratios in the event solicitation…UNLESS using a professional fund raiser for that transaction:
NY Exec Law § 174-c. Sales advertised to benefit a charitable organization.
all advertising, of every kind and nature, that a sale of goods, services, entertainment or any other thing of value will benefit a
charitable organization shall set forth the anticipated portion of the sales price, anticipated percentage of the gross proceeds,
anticipated dollar amount per purchase, or other consideration or benefit the charitable organization
is to receive. Provided, however, that advertising for sales by a charitable organization that has not used the services of a professional
fund raiseor commercial co-venturer in any way for the sale shall not be subject to the requirement of this section.
For instance, you as an employee, won’t be a prof.
4. "Professional fund raiser." Any person who directly or indirectly,
by contract, including but not limited to sub-contract, letter or other
agreement or other engagement on any basis, for compensation or other
consideration (a) plans, manages, conducts, carries on, or assists in
connection with a charitable solicitation or who employs or otherwise
engages on any basis another person to solicit from persons in this
state for or on behalf of any charitable organization or any other
person, or who engages in the business of, or holds himself out to
persons in this state as independently engaged in the business of
soliciting for such purpose; (b) solicits on behalf of a charitable
organization or any other person; or (c) who advertises that the
purchase or use of goods, services, entertainment or any other thing of
value will benefit a charitable organization but is not a commercial
co-venturer. A bona fide director, trustee, officer, volunteer or
employee of a charitable organization or fund raising counsel shall not
be deemed a professional fund raiser.
But your soliciting the event will be advertising:
10. "Solicit." To directly or indirectly make a request for a
contribution, whether express or implied, through any medium. A
"solicitation" shall be deemed to have taken place whether or not a
contribution is made. For purposes of this article, a "solicitation" or
a "solicitation of contributions" includes any advertising which
represents that the purchase or use of goods, services, entertainment or
any other thing of value will benefit a charitable organization.
Main Office: 272 Broadway, Albany NY, 12204 | Regional Offices: NYC, Oneonta, Poughkeepsie, Rochester | p. (800) 515-5012 • f. (844) 802-2204 • e. email@example.com