FundSvcs Community

As of late, a lot of department and student run events for which the departments/students are seeking sponsorships have come out of the woodwork. Unfortunately, we don't find out about many of these until very late in the process, or, in some cases, after the fact. As you can imagine we’ve dealt with a wide swath of understanding on the rules around sponsorship on both the department’s/student's part, and the sponsor's part. I realize that what needs to be done for a long term fix is education and developing enforceable policies, but right now I’m trying to get through a number of situations in the immediate future. I understand that best practice is to receipt all contributions that qualify as charitable, including FMV language as applicable, and I believe I have a pretty good grasp of what makes a sponsorship charitable or not (recognition vs. advertising, etc…). What I want to make sure I understand correctly is the minimum we're legally required to do by law. Based on IRS 1771, if nothing is received in exchange for the sponsorship it seems that we are not technically required to receipt the donor. Under the "Written Acknowledgment" section it states: > An organization that does not acknowledge a contribution incurs no penalty; but, without a written acknowledgment, the donor cannot claim the tax deduction. Sponsorships where goods/services are received seem a bit stickier. IRS 1771 states (emphasis mine): > An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization. ...and... > An organization must furnish a disclosure statement in connection with either the solicitation or the receipt of the quid pro quo contribution. The statement must be in writing and must be made in a manner that is likely to come to the attention of the donor. ...and... > A penalty is imposed on charities that do not meet the written disclosure requirement. So, it seems we are legally required to receipt and provide disclosure for any $75+ transaction that exceeds the FMV of the goods and services being received. I realize that we can also do this in a disclosure statement on the solicitation, but, as I said above, we often find out about these sponsorships well after the solicitation has been made. Am I thinking about this right? Basically, For any monies ($75+) received by our organization that exceed the FMV of the goods/services received in return, we are required to consider that excess charitable regardless of how things were presented to the sponsor, what the sponsor believes, etc… We’ve had many departments, student groups, and sponsors claim that since they were not positioning/considering the sponsorship as charitable, it is not. I've even heard this from legal counsel at major US corporations. As always thanks for any input. - Sean Sean Shappell Sr. Director, Information Services Lehigh University Development & Alumni Relations 306 S. New St., Suite 500 Bethlehem, PA 18015 (610) 758-5814 (office) (570) 594-6397 (mobile) ses211@lehigh.edu GOcampaign.lehigh.edu #LehighGoCampaign

Yes, at the $75+ level if a QPQ is involved you MUST issue a QPQ receipt. John Taylor 919.816.5903 johntaylorconsulting@gmail.com Big ideas; small keyboard > On Mar 8, 2019, at 10:53 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > As of late, a lot of department and student run events for which the departments/students are seeking sponsorships have come out of the woodwork. Unfortunately, we don't find out about many of these until very late in the process, or, in some cases, after the fact. As you can imagine we’ve dealt with a wide swath of understanding on the rules around sponsorship on both the department’s/student's part, and the sponsor's part. I realize that what needs to be done for a long term fix is education and developing enforceable policies, but right now I’m trying to get through a number of situations in the immediate future. > > I understand that best practice is to receipt all contributions that qualify as charitable, including FMV language as applicable, and I believe I have a pretty good grasp of what makes a sponsorship charitable or not (recognition vs. advertising, etc…). What I want to make sure I understand correctly is the minimum we're legally required to do by law. > > Based on IRS 1771, if nothing is received in exchange for the sponsorship it seems that we are not technically required to receipt the donor. Under the "Written Acknowledgment" section it states: > > An organization that does not acknowledge a contribution incurs no penalty; but, without a written acknowledgment, the donor cannot claim the tax deduction. > > Sponsorships where goods/services are received seem a bit stickier. IRS 1771 states (emphasis mine): > > An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization. > > ...and... > > An organization must furnish a disclosure statement in connection with either the solicitation or the receipt of the quid pro quo contribution. The statement must be in writing and must be made in a manner that is likely to come to the attention of the donor. > > ...and... > > A penalty is imposed on charities that do not meet the written disclosure requirement. > > So, it seems we are legally required to receipt and provide disclosure for any $75+ transaction that exceeds the FMV of the goods and services being received. I realize that we can also do this in a disclosure statement on the solicitation, but, as I said above, we often find out about these sponsorships well after the solicitation has been made. > > Am I thinking about this right? Basically, For any monies ($75+) received by our organization that exceed the FMV of the goods/services received in return, we are required to consider that excess charitable regardless of how things were presented to the sponsor, what the sponsor believes, etc… > > We’ve had many departments, student groups, and sponsors claim that since they were not positioning/considering the sponsorship as charitable, it is not. I've even heard this from legal counsel at major US corporations. > > As always thanks for any input. > > - Sean > > Sean Shappell > Sr. Director, Information Services > Lehigh University Development & Alumni Relations > 306 S. New St., Suite 500 > Bethlehem, PA 18015 > > (610) 758-5814 (office) > (570) 594-6397 (mobile) > ses211@lehigh.edu > GOcampaign.lehigh.edu > #LehighGoCampaign >

John, Thanks. I think I just needed to hear someone else say that. As a, somewhat related, follow up question, does anything change if it’s a “proceeds to benefit” event? For example, a group of our students holds a 5K with proceeds going to a purpose that would considered a charitable gift to the university, and they give away some things with the 5K registration (food, swag, etc…). If they advertise as “proceeds to benefit” does that negate the need for receipting/disclosure?  Can we even hold a “proceeds to benefit”   event for ourselves, or does that only work when a third-party holds an event and provides us with the proceeds? Thanks. - Sean Sean Shappell Sr. Director, Information Services Lehigh University Development & Alumni Relations 306 S. New St., Suite 500 Bethlehem, PA 18015 (610) 758-5814 (office) (570) 594-6397 (mobile) ses211@lehigh.edu GOcampaign.lehigh.edu #LehighGoCampaign On Mar 8, 2019, 11:00 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: > Yes, at the $75+ level if a QPQ is involved you MUST issue a QPQ receipt. > > John Taylor > 919.816.5903 > johntaylorconsulting@gmail.com > > Big ideas; small keyboard > > On Mar 8, 2019, at 10:53 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > > As of late, a lot of department and student run events for which the departments/students are seeking sponsorships have come out of the woodwork. Unfortunately, we don't find out about many of these until very late in the process, or, in some cases, after the fact. As you can imagine we’ve dealt with a wide swath of understanding on the rules around sponsorship on both the department’s/student's part, and the sponsor's part. I realize that what needs to be done for a long term fix is education and developing enforceable policies, but right now I’m trying to get through a number of situations in the immediate future. > > > > I understand that best practice is to receipt all contributions that qualify as charitable, including FMV language as applicable, and I believe I have a pretty good grasp of what makes a sponsorship charitable or not (recognition vs. advertising, etc…). What I want to make sure I understand correctly is the minimum we're legally required to do by law. > > > > Based on IRS 1771, if nothing is received in exchange for the sponsorship it seems that we are not technically required to receipt the donor. Under the "Written Acknowledgment" section it states: > > > > > An organization that does not acknowledge a contribution incurs no penalty; but, without a written acknowledgment, the donor cannot claim the tax deduction. > > > > Sponsorships where goods/services are received seem a bit stickier. IRS 1771 states (emphasis mine): > > > > > An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization. > > > > ...and... > > > > > An organization must furnish a disclosure statement in connection with either the solicitation or the receipt of the quid pro quo contribution. The statement must be in writing and must be made in a manner that is likely to come to the attention of the donor. > > > > ...and... > > > > > A penalty is imposed on charities that do not meet the written disclosure requirement. > > > > So, it seems we are legally required to receipt and provide disclosure for any $75+ transaction that exceeds the FMV of the goods and services being received. I realize that we can also do this in a disclosure statement on the solicitation, but, as I said above, we often find out about these sponsorships well after the solicitation has been made. > > > > Am I thinking about this right? Basically, For any monies ($75+) received by our organization that exceed the FMV of the goods/services received in return, we are required to consider that excess charitable regardless of how things were presented to the sponsor, what the sponsor believes, etc… > > > > We’ve had many departments, student groups, and sponsors claim that since they were not positioning/considering the sponsorship as charitable, it is not. I've even heard this from legal counsel at major US corporations. > > > > As always thanks for any input. > > > > - Sean > > > > Sean Shappell > > Sr. Director, Information Services > > Lehigh University Development & Alumni Relations > > 306 S. New St., Suite 500 > > Bethlehem, PA 18015 > > > > (610) 758-5814 (office) > > (570) 594-6397 (mobile) > > ses211@lehigh.edu > > GOcampaign.lehigh.edu > > #LehighGoCampaign > >

With proceeds to benefit events you are essentially saying there is no deductible gift but that the money is still going to charitable causes. John Taylor 919.816.5903 johntaylorconsulting@gmail.com Big ideas; small keyboard > On Mar 8, 2019, at 11:32 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > John, > > Thanks. I think I just needed to hear someone else say that. > > As a, somewhat related, follow up question, does anything change if it’s a “proceeds to benefit” event? For example, a group of our students holds a 5K with proceeds going to a purpose that would considered a charitable gift to the university, and they give away some things with the 5K registration (food, swag, etc…). If they advertise as “proceeds to benefit” does that negate the need for receipting/disclosure? Can we even hold a “proceeds to benefit” event for ourselves, or does that only work when a third-party holds an event and provides us with the proceeds? > > Thanks. > > - Sean > > Sean Shappell > Sr. Director, Information Services > Lehigh University Development & Alumni Relations > 306 S. New St., Suite 500 > Bethlehem, PA 18015 > > (610) 758-5814 (office) > (570) 594-6397 (mobile) > ses211@lehigh.edu > GOcampaign.lehigh.edu > #LehighGoCampaign > > >> On Mar 8, 2019, 11:00 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: >> Yes, at the $75+ level if a QPQ is involved you MUST issue a QPQ receipt. >> >> John Taylor >> 919.816.5903 >> johntaylorconsulting@gmail.com >> >> Big ideas; small keyboard >> >> On Mar 8, 2019, at 10:53 AM, Sean Shappell <ses211@lehigh.edu> wrote: >> >>> As of late, a lot of department and student run events for which the departments/students are seeking sponsorships have come out of the woodwork. Unfortunately, we don't find out about many of these until very late in the process, or, in some cases, after the fact. As you can imagine we’ve dealt with a wide swath of understanding on the rules around sponsorship on both the department’s/student's part, and the sponsor's part. I realize that what needs to be done for a long term fix is education and developing enforceable policies, but right now I’m trying to get through a number of situations in the immediate future. >>> >>> I understand that best practice is to receipt all contributions that qualify as charitable, including FMV language as applicable, and I believe I have a pretty good grasp of what makes a sponsorship charitable or not (recognition vs. advertising, etc…). What I want to make sure I understand correctly is the minimum we're legally required to do by law. >>> >>> Based on IRS 1771, if nothing is received in exchange for the sponsorship it seems that we are not technically required to receipt the donor. Under the "Written Acknowledgment" section it states: >>> >>> An organization that does not acknowledge a contribution incurs no penalty; but, without a written acknowledgment, the donor cannot claim the tax deduction. >>> >>> Sponsorships where goods/services are received seem a bit stickier. IRS 1771 states (emphasis mine): >>> >>> An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization. >>> >>> ...and... >>> >>> An organization must furnish a disclosure statement in connection with either the solicitation or the receipt of the quid pro quo contribution. The statement must be in writing and must be made in a manner that is likely to come to the attention of the donor. >>> >>> ...and... >>> >>> A penalty is imposed on charities that do not meet the written disclosure requirement. >>> >>> So, it seems we are legally required to receipt and provide disclosure for any $75+ transaction that exceeds the FMV of the goods and services being received. I realize that we can also do this in a disclosure statement on the solicitation, but, as I said above, we often find out about these sponsorships well after the solicitation has been made. >>> >>> Am I thinking about this right? Basically, For any monies ($75+) received by our organization that exceed the FMV of the goods/services received in return, we are required to consider that excess charitable regardless of how things were presented to the sponsor, what the sponsor believes, etc… >>> >>> We’ve had many departments, student groups, and sponsors claim that since they were not positioning/considering the sponsorship as charitable, it is not. I've even heard this from legal counsel at major US corporations. >>> >>> As always thanks for any input. >>> >>> - Sean >>> >>> Sean Shappell >>> Sr. Director, Information Services >>> Lehigh University Development & Alumni Relations >>> 306 S. New St., Suite 500 >>> Bethlehem, PA 18015 >>> >>> (610) 758-5814 (office) >>> (570) 594-6397 (mobile) >>> ses211@lehigh.edu >>> GOcampaign.lehigh.edu >>> #LehighGoCampaign >>>

Thanks! So, if there are contributions that meet the criteria for a deductible gift we are required to treat it as such regardless of how the event is framed. Sean Shappell Sr. Director, Information Services Lehigh University Development & Alumni Relations 306 S. New St., Suite 500 Bethlehem, PA 18015 (610) 758-5814 (office) (570) 594-6397 (mobile) ses211@lehigh.edu GOcampaign.lehigh.edu #LehighGoCampaign On Mar 8, 2019, 11:38 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: > With proceeds to benefit events you are essentially saying there is no deductible gift but that the money is still going to charitable causes. > > John Taylor > 919.816.5903 > johntaylorconsulting@gmail.com > > Big ideas; small keyboard > > On Mar 8, 2019, at 11:32 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > > John, > > > > Thanks. I think I just needed to hear someone else say that. > > > > As a, somewhat related, follow up question, does anything change if it’s a “proceeds to benefit” event? For example, a group of our students holds a 5K with proceeds going to a purpose that would considered a charitable gift to the university, and they give away some things with the 5K registration (food, swag, etc…). If they advertise as “proceeds to benefit” does that negate the need for receipting/disclosure?  Can we even hold a “proceeds to benefit”   event for ourselves, or does that only work when a third-party holds an event and provides us with the proceeds? > > > > Thanks. > > > > - Sean > > > > Sean Shappell > > Sr. Director, Information Services > > Lehigh University Development & Alumni Relations > > 306 S. New St., Suite 500 > > Bethlehem, PA 18015 > > > > (610) 758-5814 (office) > > (570) 594-6397 (mobile) > > ses211@lehigh.edu > > GOcampaign.lehigh.edu > > #LehighGoCampaign > > > > On Mar 8, 2019, 11:00 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: > > > Yes, at the $75+ level if a QPQ is involved you MUST issue a QPQ receipt. > > > > > > John Taylor > > > 919.816.5903 > > > johntaylorconsulting@gmail.com > > > > > > Big ideas; small keyboard > > > > > > On Mar 8, 2019, at 10:53 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > > > > > > As of late, a lot of department and student run events for which the departments/students are seeking sponsorships have come out of the woodwork. Unfortunately, we don't find out about many of these until very late in the process, or, in some cases, after the fact. As you can imagine we’ve dealt with a wide swath of understanding on the rules around sponsorship on both the department’s/student's part, and the sponsor's part. I realize that what needs to be done for a long term fix is education and developing enforceable policies, but right now I’m trying to get through a number of situations in the immediate future. > > > > > > > > I understand that best practice is to receipt all contributions that qualify as charitable, including FMV language as applicable, and I believe I have a pretty good grasp of what makes a sponsorship charitable or not (recognition vs. advertising, etc…). What I want to make sure I understand correctly is the minimum we're legally required to do by law. > > > > > > > > Based on IRS 1771, if nothing is received in exchange for the sponsorship it seems that we are not technically required to receipt the donor. Under the "Written Acknowledgment" section it states: > > > > > > > > > An organization that does not acknowledge a contribution incurs no penalty; but, without a written acknowledgment, the donor cannot claim the tax deduction. > > > > > > > > Sponsorships where goods/services are received seem a bit stickier. IRS 1771 states (emphasis mine): > > > > > > > > > An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization. > > > > > > > > ...and... > > > > > > > > > An organization must furnish a disclosure statement in connection with either the solicitation or the receipt of the quid pro quo contribution. The statement must be in writing and must be made in a manner that is likely to come to the attention of the donor. > > > > > > > > ...and... > > > > > > > > > A penalty is imposed on charities that do not meet the written disclosure requirement. > > > > > > > > So, it seems we are legally required to receipt and provide disclosure for any $75+ transaction that exceeds the FMV of the goods and services being received. I realize that we can also do this in a disclosure statement on the solicitation, but, as I said above, we often find out about these sponsorships well after the solicitation has been made. > > > > > > > > Am I thinking about this right? Basically, For any monies ($75+) received by our organization that exceed the FMV of the goods/services received in return, we are required to consider that excess charitable regardless of how things were presented to the sponsor, what the sponsor believes, etc… > > > > > > > > We’ve had many departments, student groups, and sponsors claim that since they were not positioning/considering the sponsorship as charitable, it is not. I've even heard this from legal counsel at major US corporations. > > > > > > > > As always thanks for any input. > > > > > > > > - Sean > > > > > > > > Sean Shappell > > > > Sr. Director, Information Services > > > > Lehigh University Development & Alumni Relations > > > > 306 S. New St., Suite 500 > > > > Bethlehem, PA 18015 > > > > > > > > (610) 758-5814 (office) > > > > (570) 594-6397 (mobile) > > > > ses211@lehigh.edu > > > > GOcampaign.lehigh.edu > > > > #LehighGoCampaign > > > >

What Alan said. I will emphasize that for non-QPQ gifts you really do not have to issue a receipt at all unless the donor asks for one. But I personally that is horrible for donor relations! John Taylor 919.816.5903 johntaylorconsulting@gmail.com Big ideas; small keyboard > On Mar 8, 2019, at 11:42 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > Thanks! So, if there are contributions that meet the criteria for a deductible gift we are required to treat it as such regardless of how the event is framed. > > Sean Shappell > Sr. Director, Information Services > Lehigh University Development & Alumni Relations > 306 S. New St., Suite 500 > Bethlehem, PA 18015 > > (610) 758-5814 (office) > (570) 594-6397 (mobile) > ses211@lehigh.edu > GOcampaign.lehigh.edu > #LehighGoCampaign > > >> On Mar 8, 2019, 11:38 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: >> With proceeds to benefit events you are essentially saying there is no deductible gift but that the money is still going to charitable causes. >> >> John Taylor >> 919.816.5903 >> johntaylorconsulting@gmail.com >> >> Big ideas; small keyboard >> >> On Mar 8, 2019, at 11:32 AM, Sean Shappell <ses211@lehigh.edu> wrote: >> >>> John, >>> >>> Thanks. I think I just needed to hear someone else say that. >>> >>> As a, somewhat related, follow up question, does anything change if it’s a “proceeds to benefit” event? For example, a group of our students holds a 5K with proceeds going to a purpose that would considered a charitable gift to the university, and they give away some things with the 5K registration (food, swag, etc…). If they advertise as “proceeds to benefit” does that negate the need for receipting/disclosure? Can we even hold a “proceeds to benefit” event for ourselves, or does that only work when a third-party holds an event and provides us with the proceeds? >>> >>> Thanks. >>> >>> - Sean >>> >>> Sean Shappell >>> Sr. Director, Information Services >>> Lehigh University Development & Alumni Relations >>> 306 S. New St., Suite 500 >>> Bethlehem, PA 18015 >>> >>> (610) 758-5814 (office) >>> (570) 594-6397 (mobile) >>> ses211@lehigh.edu >>> GOcampaign.lehigh.edu >>> #LehighGoCampaign >>> >>> >>>> On Mar 8, 2019, 11:00 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: >>>> Yes, at the $75+ level if a QPQ is involved you MUST issue a QPQ receipt. >>>> >>>> John Taylor >>>> 919.816.5903 >>>> johntaylorconsulting@gmail.com >>>> >>>> Big ideas; small keyboard >>>> >>>> On Mar 8, 2019, at 10:53 AM, Sean Shappell <ses211@lehigh.edu> wrote: >>>> >>>>> As of late, a lot of department and student run events for which the departments/students are seeking sponsorships have come out of the woodwork. Unfortunately, we don't find out about many of these until very late in the process, or, in some cases, after the fact. As you can imagine we’ve dealt with a wide swath of understanding on the rules around sponsorship on both the department’s/student's part, and the sponsor's part. I realize that what needs to be done for a long term fix is education and developing enforceable policies, but right now I’m trying to get through a number of situations in the immediate future. >>>>> >>>>> I understand that best practice is to receipt all contributions that qualify as charitable, including FMV language as applicable, and I believe I have a pretty good grasp of what makes a sponsorship charitable or not (recognition vs. advertising, etc…). What I want to make sure I understand correctly is the minimum we're legally required to do by law. >>>>> >>>>> Based on IRS 1771, if nothing is received in exchange for the sponsorship it seems that we are not technically required to receipt the donor. Under the "Written Acknowledgment" section it states: >>>>> >>>>> An organization that does not acknowledge a contribution incurs no penalty; but, without a written acknowledgment, the donor cannot claim the tax deduction. >>>>> >>>>> Sponsorships where goods/services are received seem a bit stickier. IRS 1771 states (emphasis mine): >>>>> >>>>> An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization. >>>>> >>>>> ...and... >>>>> >>>>> An organization must furnish a disclosure statement in connection with either the solicitation or the receipt of the quid pro quo contribution. The statement must be in writing and must be made in a manner that is likely to come to the attention of the donor. >>>>> >>>>> ...and... >>>>> >>>>> A penalty is imposed on charities that do not meet the written disclosure requirement. >>>>> >>>>> So, it seems we are legally required to receipt and provide disclosure for any $75+ transaction that exceeds the FMV of the goods and services being received. I realize that we can also do this in a disclosure statement on the solicitation, but, as I said above, we often find out about these sponsorships well after the solicitation has been made. >>>>> >>>>> Am I thinking about this right? Basically, For any monies ($75+) received by our organization that exceed the FMV of the goods/services received in return, we are required to consider that excess charitable regardless of how things were presented to the sponsor, what the sponsor believes, etc… >>>>> >>>>> We’ve had many departments, student groups, and sponsors claim that since they were not positioning/considering the sponsorship as charitable, it is not. I've even heard this from legal counsel at major US corporations. >>>>> >>>>> As always thanks for any input. >>>>> >>>>> - Sean >>>>> >>>>> Sean Shappell >>>>> Sr. Director, Information Services >>>>> Lehigh University Development & Alumni Relations >>>>> 306 S. New St., Suite 500 >>>>> Bethlehem, PA 18015 >>>>> >>>>> (610) 758-5814 (office) >>>>> (570) 594-6397 (mobile) >>>>> ses211@lehigh.edu >>>>> GOcampaign.lehigh.edu >>>>> #LehighGoCampaign >>>>>

Thanks Alan and John both! Sean Shappell Sr. Director, Information Services Lehigh University Development & Alumni Relations 306 S. New St., Suite 500 Bethlehem, PA 18015 (610) 758-5814 (office) (570) 594-6397 (mobile) ses211@lehigh.edu GOcampaign.lehigh.edu #LehighGoCampaign On Mar 8, 2019, 12:04 PM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: > What Alan said.  I will emphasize that for non-QPQ gifts you really do not have to issue a receipt at all unless the donor asks for one.  But I personally that is horrible for donor relations! > > John Taylor > 919.816.5903 > johntaylorconsulting@gmail.com > > Big ideas; small keyboard > > On Mar 8, 2019, at 11:42 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > > Thanks! So, if there are contributions that meet the criteria for a deductible gift we are required to treat it as such regardless of how the event is framed. > > > > Sean Shappell > > Sr. Director, Information Services > > Lehigh University Development & Alumni Relations > > 306 S. New St., Suite 500 > > Bethlehem, PA 18015 > > > > (610) 758-5814 (office) > > (570) 594-6397 (mobile) > > ses211@lehigh.edu > > GOcampaign.lehigh.edu > > #LehighGoCampaign > > > > On Mar 8, 2019, 11:38 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: > > > With proceeds to benefit events you are essentially saying there is no deductible gift but that the money is still going to charitable causes. > > > > > > John Taylor > > > 919.816.5903 > > > johntaylorconsulting@gmail.com > > > > > > Big ideas; small keyboard > > > > > > On Mar 8, 2019, at 11:32 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > > > > > > John, > > > > > > > > Thanks. I think I just needed to hear someone else say that. > > > > > > > > As a, somewhat related, follow up question, does anything change if it’s a “proceeds to benefit” event? For example, a group of our students holds a 5K with proceeds going to a purpose that would considered a charitable gift to the university, and they give away some things with the 5K registration (food, swag, etc…). If they advertise as “proceeds to benefit” does that negate the need for receipting/disclosure?  Can we even hold a “proceeds to benefit”   event for ourselves, or does that only work when a third-party holds an event and provides us with the proceeds? > > > > > > > > Thanks. > > > > > > > > - Sean > > > > > > > > Sean Shappell > > > > Sr. Director, Information Services > > > > Lehigh University Development & Alumni Relations > > > > 306 S. New St., Suite 500 > > > > Bethlehem, PA 18015 > > > > > > > > (610) 758-5814 (office) > > > > (570) 594-6397 (mobile) > > > > ses211@lehigh.edu > > > > GOcampaign.lehigh.edu > > > > #LehighGoCampaign > > > > > > > > On Mar 8, 2019, 11:00 AM -0500, John Taylor <johntaylorconsulting@gmail.com>, wrote: > > > > > Yes, at the $75+ level if a QPQ is involved you MUST issue a QPQ receipt. > > > > > > > > > > John Taylor > > > > > 919.816.5903 > > > > > johntaylorconsulting@gmail.com > > > > > > > > > > Big ideas; small keyboard > > > > > > > > > > On Mar 8, 2019, at 10:53 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > > > > > > > > > > As of late, a lot of department and student run events for which the departments/students are seeking sponsorships have come out of the woodwork. Unfortunately, we don't find out about many of these until very late in the process, or, in some cases, after the fact. As you can imagine we’ve dealt with a wide swath of understanding on the rules around sponsorship on both the department’s/student's part, and the sponsor's part. I realize that what needs to be done for a long term fix is education and developing enforceable policies, but right now I’m trying to get through a number of situations in the immediate future. > > > > > > > > > > > > I understand that best practice is to receipt all contributions that qualify as charitable, including FMV language as applicable, and I believe I have a pretty good grasp of what makes a sponsorship charitable or not (recognition vs. advertising, etc…). What I want to make sure I understand correctly is the minimum we're legally required to do by law. > > > > > > > > > > > > Based on IRS 1771, if nothing is received in exchange for the sponsorship it seems that we are not technically required to receipt the donor. Under the "Written Acknowledgment" section it states: > > > > > > > > > > > > > An organization that does not acknowledge a contribution incurs no penalty; but, without a written acknowledgment, the donor cannot claim the tax deduction. > > > > > > > > > > > > Sponsorships where goods/services are received seem a bit stickier. IRS 1771 states (emphasis mine): > > > > > > > > > > > > > An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization. > > > > > > > > > > > > ...and... > > > > > > > > > > > > > An organization must furnish a disclosure statement in connection with either the solicitation or the receipt of the quid pro quo contribution. The statement must be in writing and must be made in a manner that is likely to come to the attention of the donor. > > > > > > > > > > > > ...and... > > > > > > > > > > > > > A penalty is imposed on charities that do not meet the written disclosure requirement. > > > > > > > > > > > > So, it seems we are legally required to receipt and provide disclosure for any $75+ transaction that exceeds the FMV of the goods and services being received. I realize that we can also do this in a disclosure statement on the solicitation, but, as I said above, we often find out about these sponsorships well after the solicitation has been made. > > > > > > > > > > > > Am I thinking about this right? Basically, For any monies ($75+) received by our organization that exceed the FMV of the goods/services received in return, we are required to consider that excess charitable regardless of how things were presented to the sponsor, what the sponsor believes, etc… > > > > > > > > > > > > We’ve had many departments, student groups, and sponsors claim that since they were not positioning/considering the sponsorship as charitable, it is not. I've even heard this from legal counsel at major US corporations. > > > > > > > > > > > > As always thanks for any input. > > > > > > > > > > > > - Sean > > > > > > > > > > > > Sean Shappell > > > > > > Sr. Director, Information Services > > > > > > Lehigh University Development & Alumni Relations > > > > > > 306 S. New St., Suite 500 > > > > > > Bethlehem, PA 18015 > > > > > > > > > > > > (610) 758-5814 (office) > > > > > > (570) 594-6397 (mobile) > > > > > > ses211@lehigh.edu > > > > > > GOcampaign.lehigh.edu > > > > > > #LehighGoCampaign > > > > > >

We should probably keep in mind that it is far better to issue a receipt when a gift is involved - unless we tell donors up-front that we are not treating the event as having any tax-deductible component - rather than wait for a donor to "complain" about not receiving a receipt. And, in keeping with good donor relations even if we are not promising a tax-deduction we should still be thanking participants for their involvement in a proceeds to benefit event. Personally, within 1 week of such an event, I will send a letter to all letting them know just how much money went to the benefiting program and what that meant could be done that otherwise could not. These days, it is all about impact statements and words of thanks from those benefiting that will result in additional participation and contributions in the future. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Fri, Mar 8, 2019 at 3:46 PM Sean Shappell <ses211@lehigh.edu> wrote: > Thanks Alan and John both! > > Sean Shappell > > Sr. Director, Information Services > > Lehigh University Development & Alumni Relations > > 306 S. New St., Suite 500 > > Bethlehem, PA 18015 > > > (610) 758-5814 (office) > > (570) 594-6397 (mobile) > > ses211@lehigh.edu > > GOcampaign.lehigh.edu > > #LehighGoCampaign > > > <http://gocampaign.lehigh.edu> > On Mar 8, 2019, 12:04 PM -0500, John Taylor < > johntaylorconsulting@gmail.com>, wrote: > > What Alan said. I will emphasize that for non-QPQ gifts you really do not > have to issue a receipt at all unless the donor asks for one. But I > personally that is horrible for donor relations! > > John Taylor > 919.816.5903 > johntaylorconsulting@gmail.com > > Big ideas; small keyboard > > On Mar 8, 2019, at 11:42 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > Thanks! So, if there are contributions that meet the criteria for a > deductible gift we are required to treat it as such regardless of how the > event is framed. > > Sean Shappell > > Sr. Director, Information Services > > Lehigh University Development & Alumni Relations > > 306 S. New St., Suite 500 > > Bethlehem, PA 18015 > > > (610) 758-5814 (office) > > (570) 594-6397 (mobile) > > ses211@lehigh.edu > > GOcampaign.lehigh.edu > > #LehighGoCampaign > > > <http://gocampaign.lehigh.edu> > On Mar 8, 2019, 11:38 AM -0500, John Taylor < > johntaylorconsulting@gmail.com>, wrote: > > With proceeds to benefit events you are essentially saying there is no > deductible gift but that the money is still going to charitable causes. > > John Taylor > 919.816.5903 > johntaylorconsulting@gmail.com > > Big ideas; small keyboard > > On Mar 8, 2019, at 11:32 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > John, > > Thanks. I think I just needed to hear someone else say that. > > As a, somewhat related, follow up question, does anything change if it’s a > “proceeds to benefit” event? For example, a group of our students holds a > 5K with proceeds going to a purpose that would considered a charitable gift > to the university, and they give away some things with the 5K registration > (food, swag, etc…). If they advertise as “proceeds to benefit” does that > negate the need for receipting/disclosure? Can we even hold a “proceeds to > benefit” event for ourselves, or does that only work when a third-party > holds an event and provides us with the proceeds? > > Thanks. > > - Sean > > Sean Shappell > > Sr. Director, Information Services > > Lehigh University Development & Alumni Relations > > 306 S. New St., Suite 500 > > Bethlehem, PA 18015 > > > (610) 758-5814 (office) > > (570) 594-6397 (mobile) > > ses211@lehigh.edu > > GOcampaign.lehigh.edu > > #LehighGoCampaign > > > <http://gocampaign.lehigh.edu> > On Mar 8, 2019, 11:00 AM -0500, John Taylor < > johntaylorconsulting@gmail.com>, wrote: > > Yes, at the $75+ level if a QPQ is involved you MUST issue a QPQ receipt. > > John Taylor > 919.816.5903 > johntaylorconsulting@gmail.com > > Big ideas; small keyboard > > On Mar 8, 2019, at 10:53 AM, Sean Shappell <ses211@lehigh.edu> wrote: > > As of late, a lot of department and student run events for which the > departments/students are seeking sponsorships have come out of the > woodwork. Unfortunately, we don't find out about many of these until very > late in the process, or, in some cases, after the fact. As you can imagine > we’ve dealt with a wide swath of understanding on the rules around > sponsorship on both the department’s/student's part, and the sponsor's > part. I realize that what needs to be done for a long term fix is education > and developing enforceable policies, but right now I’m trying to get > through a number of situations in the immediate future. > > I understand that best practice is to receipt all contributions that > qualify as charitable, including FMV language as applicable, and I believe > I have a pretty good grasp of what makes a sponsorship charitable or not > (recognition vs. advertising, etc…). What I want to make sure I understand > correctly is the minimum we're legally required to do by law. > > Based on IRS 1771, if nothing is received in exchange for the sponsorship > it seems that we are not technically *required* to receipt the donor. > Under the "Written Acknowledgment" section it states: > > An organization that does not acknowledge a contribution incurs no > penalty; but, without a written acknowledgment, the donor cannot claim the > tax deduction. > > > Sponsorships where goods/services are received seem a bit stickier. IRS > 1771 states (emphasis mine): > > An organization *must* provide a written disclosure statement to a donor > who makes a payment exceeding $75 partly as a contribution and partly for > goods and services provided by the organization. > > > ...and... > > An organization *must* furnish a disclosure statement in connection with > either the solicitation or the receipt of the quid pro quo contribution. > The statement must be in writing and must be made in a manner that is > likely to come to the attention of the donor. > > > ...and... > > A *penalty* is imposed on charities that do not meet the written > disclosure requirement. > > > So, it seems we are legally required to receipt and provide disclosure for > any $75+ transaction that exceeds the FMV of the goods and services being > received. I realize that we can also do this in a disclosure statement on > the solicitation, but, as I said above, we often find out about these > sponsorships well after the solicitation has been made. > > Am I thinking about this right? Basically, For any monies ($75+) received > by our organization that exceed the FMV of the goods/services received in > return, we are required to consider that excess charitable regardless of > how things were presented to the sponsor, what the sponsor believes, etc… > > We’ve had many departments, student groups, and sponsors claim that since > they were not positioning/considering the sponsorship as charitable, it is > not. I've even heard this from legal counsel at major US corporations. > > As always thanks for any input. > > - Sean > > Sean Shappell > > Sr. Director, Information Services > > Lehigh University Development & Alumni Relations > > 306 S. New St., Suite 500 > > Bethlehem, PA 18015 > > > (610) 758-5814 (office) > > (570) 594-6397 (mobile) > > ses211@lehigh.edu > > GOcampaign.lehigh.edu > > #LehighGoCampaign > > > <http://gocampaign.lehigh.edu> > >