FundSvcs Community

Confusion as to which amount should be deducted. Is it the cost of the item to the school or the fair market value of the item? Beverly Lyles Southern Nazarene University Bethany, OK 73008 405-491-6606 Sent from my iPhone

If you are referring to the token item rules (lapel pins, bumper stickers, and the like), these can only be awarded to donors who make a gift of $55.50 or more. The cumulative value of ALL items given cannot exceed $11.10. And while you do not have to use retail value, you cannot necessarily use cost (many of these items are often donated). The general rule of thumb is to use the wholesale cost had you purchased them - or the actual cost if higher. 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 Tue, Apr 16, 2019 at 7:04 AM Beverly Lyles <blyles@snu.edu> wrote: > Confusion as to which amount should be deducted. Is it the cost of the > item to the school or the fair market value of the item? > > Beverly Lyles > Southern Nazarene University > Bethany, OK 73008 > 405-491-6606 > > Sent from my iPhone >

There are a number of different exceptions to the general rule that the fair market value of any goods or services provided to a donor in consideration of a gift must be disclosed. The underlying principal is that once a benefit is determined to be substantial (i.e. it doesn’t meet any of the exceptions) it must be disclosed at its fair market value. One of the exceptions is whether the (cumulative) fair market value of all benefits that the donor receives in consideration of a gift is less than 2% of the value of the contribution and less than $111 (the $111 is the 2019 amount; it was originally $50 and is adjusted every year for inflation). A separate test applies when the only benefits provided to the donor in consideration of a gift are “low cost articles” that include the name or logo of the organization and cost the organization $11.10 or less (2019 limits, adjusted annually for inflation). In this test only the determination is based on the cost of the articles to the organization (or, if the articles were donated, the cost that the organization would have had to pay for them). In addition, the articles must be provided in return for a gift of at least $55.50 (for 2019; this is also adjusted annually for inflation). (This exception has its roots in an earlier rule that applies to fundraising where the charity sends out a premium when it asks for a gift). If the benefits provided meet all the requirements of any test, they can be excluded as insubstantial. Otherwise, all benefits provided must be disclosed, along with their fair market value. Cost applies only to the low-cost articles exception, and only with respect to determining whether the benefits may be ignored. (There is another exception that applies to certain benefits that can be exercised frequently (discounted admission, free parking, etc.) when provided to donors in consideration of a membership payment of $75 or less (not indexed for inflation). And there is yet another exception when the only benefits provided are certain intangible religious benefits.) My US$0.02 worth; the usual disclaimers apply. Good luck! Alan Alan S. Hejnal Data Quality Manager Smithsonian Institution - Office of Advancement 600 Maryland Avenue SW, Suite 600E P.O. Box 37012, MRC 527 Washington, DC 20013-7012 •: 202-633-8754 | •: HejnalA@si.edu<mailto:HejnalA@si.edu> [SNAGHTML5cbfa34]<https://www.si.edu/> [AASP_FundSvcs_LOGO-01(040pct)(mark)] From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Beverly Lyles Sent: Tuesday, April 16, 2019 10:05 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: [FUNDSVCS] Insignificant Gifts Confusion as to which amount should be deducted. Is it the cost of the item to the school or the fair market value of the item? Beverly Lyles Southern Nazarene University Bethany, OK 73008 405-491-6606 Sent from my iPhone