Do consult Counsel. On the surface, it appears that since the payments are
benefiting specific individuals they are not tax-deductible. See IRS
Publication 526. To avoid this dilemma you would need to show that all
students attend the mission trip regardless of dollars raised and that
those dollars when raised must go to a general program budget without
attribution to benefit a specific individual.
It is, in fact, these types of mission trips that first rose IRS concerns
back in the 1960s. Here is a quote from IRS Letter Ruling 9405003
referencing Revenue Ruling 62-113, 1962-2 C.B. 10:
"The revenue ruling states that if contributions to the missionary fund are
earmarked by the donor for a particular individual, they are treated, in
effect, as being gifts to the designated individual and are not deductible.
[*12] However, the revenue ruling allows a deduction where it is
established that a gift is intended by the donor for the use of the
organization and not as a gift to an individual."
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 29, 2019 at 11:53 AM Katharine Yates <
kyates@pts.edu> wrote:
> I would appreciate some feedback about a similar situation in our
> organization (Pittsburgh Theological Seminary). One of our programs
> provides national and international mission trips for our students and
> community members (for students, the mission trips are part of an actual
> class for which the students get credit. Other participants are welcome to
> audit the course as well). All trip participants are required to pay or
> fundraise the amount needed to cover their costs for participating in the
> trip – such as airfare, in-country lodging, etc. – with some limited
> financial aid available for students. This per-person amount is set by the
> program ahead of time, and participants are aware of it when they sign up
> for the trip. Our program usually offers 2-3 of these trips every academic
> year.
>
>
>
> Individual participants are responsible for fundraising on their own, and
> we have always said that donations raised by participants are
> tax-deductible only if the donor does not name a specific recipient on
> their check/online donation. If a donor specifies a participant’s name with
> their donation, rather than just the mission trip or the program as whole,
> we do not count it as a charitable contribution – and of course, payments
> from participants are not charitable because they are receiving goods &
> services in return.
>
>
>
> Our business office sets up one account for each mission trip, so all
> payments and donations go into this one group fund, which is then used to
> cover everybody’s expenses. So the funds do go into a general program fund,
> but it is NOT the case that every participant who signed up would get to go
> regardless of whether any money was raised. While the advancement and
> business offices don’t care about who specifically is raising money, the
> program providing the mission trips keeps track of this information. So I
> am not sure if we are operating under the correct assumption that all these
> gifts are tax-deductible.
>
>
>
> We are probably going to end up consulting with our legal advice about
> this, but if any of you have been in similar situations and can provide
> feedback, that would be appreciated as well!
>
>
>
> Thanks,
>
> Katie
>
>
>
> Katie Campbell Yates
>
> Advancement Coordinator
>
> Pittsburgh Theological Seminary
>
> (P) 412-924-1376
>
> (F) 412-924-1776
>
>
kyates@pts.edu
>
>
>
> [image: PTSLogoFnl-4C-PC]
>
>
>
>
>
>
>
>
>
> *From:* Advancement Services Discussion List [mailto:
>
FUNDSVCS@LISTSERV.FUNDSVCS.ORG] *On Behalf Of *John Taylor
> *Sent:* Thursday, March 28, 2019 4:32 PM
> *To:*
FUNDSVCS@LISTSERV.FUNDSVCS.ORG
> *Subject:* Re: [FUNDSVCS] Athletic Fundraising Question
>
>
>
> You will want to speak with Counsel.
>
>
>
> Generally, per IRS Publication 526, you cannot make a tax-deductible
> donation that benefits a specific individual. And it appears as though
> these donors each had the intention of benefiting a specific individual.
> To ensure deductibility you would need to make it clear that every player
> was going to go regardless of whether ANY money was raised and that those
> funds raised would go into a general program fund.
>
>
>
> What you don't mention is the purpose of this trip. If it is related to
> the educational purposes established for your athletic program that's
> great. If it's to take the team on a holiday then the payments are not
> deductible anyway. Or if it's "business and pleasure" you need to figure
> out what is deductible and what is not.
>
>
>
> And if any is not deductible then the funds cannot come from a DAF or
> private foundation.
>
>
>
> 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 Thu, Mar 28, 2019 at 4:24 PM Jessica Collins <
collins_jr@lynchburg.edu>
> wrote:
>
> Good Evening,
>
> We recently had a fundraiser happen for our women's soccer program to take
> a trip to Costa Rica, which they do annually. We are struggling with
> whether or not we should be counting these checks as donations as the
> solicitation letter that went out from our Athletics staff specifically
> states "If you wish to donate to a specific player, please write the name
> of the designated player in the Memo Line." For all donations received,
> every single individual has written their check on behalf of a player (most
> of those donors were family members of the players).
>
> Due to this specific designation to a player to pay for their "Per Player
> Costs" can we accept these checks as donations? My thought is if we did not
> have the checks going to specific individuals the answer would be yes.
>
> Any help/insight you can provide would be greatly appreciated!
>
> Thank you,
> Jessica R. Collins
> Director of Advancement Services
>
>