Colleagues:
This topic consistently pops up on the list and even to this day it feels
as though there is still a great deal of misunderstanding, or possibly even
misinformation, about tax implications as they might apply to various ways
we wish to steward our donors. In a number of past discussions out here,
the question has arisen about whether or not a donor's prior lack of
knowledge that an organization might provide a benefit (a book, a dinner, a
Tiffany's tie tack or pendant, etc) associated with a single gift or level
of giving achieved translated to the value of those benefits having no tax
implications. And, to be clear, I'm not referring to the percent/dollar
amounts previously noted along this thread. The idea of co-mingling
prospects in a dinner designed to thank donors at a certain level has often
been proposed as a way to mitigate tax implications around such an event.
Creative ideas have been shared about offering benefits with a perceived
rather than tangible value to engage with donors, as well (like advance
notice to special events, "preferred" parking to events even where there is
no charge to park).
With all that in mind, I'm going to put together a survey over the weekend
to try capturing ideas and innovations other organizations might be doing
to still actively steward their donors while minimizing tax implications.
If you have questions around this topic you would like to have answered
then please feel free to share them - either here or directly to me at my
email below. Additionally, if you have (and can share) your stewardship
plan - via link or attachment - I would so appreciate an opportunity to
check those, too!
With thanks in advance to any and all who share either their questions or
their inspirations!
-Amy
Amy J. Phillips
Director of Advancement Services, Gift Acceptance
Division of University Advancement
The Catholic University of America
620 Michigan Avenue, E215 O'Connell Hall
Washington, DC 20064
Phone: 202-319-6919
Email:
phillipsajud@cua.edu
On Tue, Apr 16, 2019 at 8:48 AM Hejnal, Alan <
00000031f8bb5829-dmarc-request@listserv.fundsvcs.org> wrote:
> As John noted, the fair market value of benefits is what the donor would
> have had to pay for the same (or equivalent) benefit if they had gone out
> and purchased it on their own, which may well be more than your cost
> (especially if you get a discount for purchasing in quantity).
>
>
>
> Also, to elaborate a bit on what John said, the tests for insubstantial
> benefits apply to everything that the donor received in consideration of
> their gift. Even if some benefit would, by itself, have fallen under the
> limits for insubstantial benefits, once the value of all benefits
> cumulatively exceed the limit, the **all** the benefits and their value
> must be disclosed.
>
>
>
> Also, again elaborating on John’s comment, the low-cost logo items test
> only applies if **only** such benefits are provided in consideration of
> the gift. If other benefits are also provided, the logo items have to be
> considered under the 2%/$111 test, and, under that test, they are
> considered at their fair market value rather than at their cost.
>
>
>
> 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
>
>
> [image: SNAGHTML5cbfa34] <https://www.si.edu/>
> [image: AASP_FundSvcs_LOGO-01(040pct)(mark)]
>
>
>
>
>
> *From:* Advancement Services Discussion List <
>
FUNDSVCS@LISTSERV.FUNDSVCS.ORG> *On Behalf Of *John Taylor
> *Sent:* Monday, April 15, 2019 5:35 PM
> *To:*
FUNDSVCS@LISTSERV.FUNDSVCS.ORG
> *Subject:* Re: [FUNDSVCS] Donor Stewardship events
>
>
>
> The rules are a bit more detailed, Scott.
>
>
>
> Your cost is not the issue. What is related to the entire experience -
> the fair market value of the event. While your charge/cost may be
> $20/person, the value is likely higher. And keep in mind in your example
> you would have to exclude spouses/partners.
>
>
>
> The current rules for these events are 2% of the amount given or $111 -
> whichever is LESS. And that applies to the cumulative value.
>
>
>
> Logo items do not apply in this case.
>
>
>
> And do remember that you CANNOT invite donors who give through DAFs or
> family foundations to these events. They can only get the logo items - and
> then only if they pay $55.50 or more and the cumulative value of those
> benefits is $11.10 or less.
>
>
>
> 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 Mon, Apr 15, 2019 at 2:11 PM Scott Lober <
SCOTT.LOBER@phhs.org> wrote:
>
> We’re discussing stewardship of donors such as an evening appetizers and
> wine to sit-down dinners and how the FMV of such events affect the
> deductibility of the donor’s gift(s).
>
>
>
> I was asked to pose a question of the forum as to how other organizations
> steward their donors at varying levels with events —Annual Giving, Employee
> Giving, Major Giving and Principle Giving.
>
>
>
> We’re finding most caterers in town won’t do evening catering events for
> less than $20 a person. Does that affect the deductibility of their gift?
> Does that mean we don’t have to disclose if their gift is at least $1,000
> ($20 = 2% of $1,000). If they receive a logo item, is that a separate
> issue? Or is it cumulative?
>
>
>
> Also, what do organizations do about the $100 annual giving donor? Are
> they limited to a $2 event?
>
>
>
> The question we need asked, is how do other organizations steward their
> donors with events and not run afoul of IRS rules and regulations? Do you
> only invite donors at a certain level?
>
>
>
> Thanks
>
>
>
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