The IRS tells us to make a "good faith estimate" as to the value of each
benefit provided in exchange for a gift. From the Final Substantiation
Regulations:
"The regulations define a good faith estimate as an estimate of the fair
market value of the goods or services."
Where you have not previously established a value for something, the IRS
tells us to use values from other comparable events/organizations.
What's really important is that you come up with this good faith estimate.
If you don't, you could find that whatever amount you "sell" the
sponsorship for *becomes* the value. Here is a related quote from one of
the original Revenue Rulings on the subject (Rev. Rul. 67-246):
"To be a gift for such purposes in the present context there must be, among
other requirements, a payment of money or transfer of property without
adequate consideration. As a general rule, where a transaction involving a
payment is in the form of a purchase of an item of value, the presumption
arises that no gift has been made for charitable contribution purposes, the
presumption being that the payment in such case is the purchase price.
Thus, where consideration in the form of admissions or other privileges or
benefits is received in connection with payments by patrons of fund-raising
affairs of the type in question, the presumption is that the payments are
not gifts. In such case, therefore, if a charitable contribution deduction
is claimed with respect to the payment, the burden is on the taxpayer to
establish that the amount paid is not the purchase of the privileges or
benefits and that part of the payment, in fact, does qualify as a gift. "
The one place where the IRS has offered an exception pertains the presence
of a celebrity. The fact that someone important is part of the picture
does not impact the good faith estimate calculation.
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, Aug 9, 2019 at 6:50 PM Rachel Ellis <
0000004a21931ba8-dmarc-request@listserv.fundsvcs.org> wrote:
> Hi All,
>
> Any suggestions for how to value the benefits below? Our Athletics
> Department wants to add them as sponsorship benefits. We don't sell the
> opportunity to do any of these things.
>
> - Team Day - Get to know the team you donated to at one of their
> official team practices
> - Get in the Game - Throw the ceremonial first pitch, deliver the game
> ball, or sound off the starting gun. (We plan to deduct the cost of two
> tickets to attend the game)
>
> Thank you!
>
> *Rachel E. Ellis*
>
> *Director of Advancement Services*
> Point Loma Nazarene University
> (619) 849-2600
>
rellis2@pointloma.edu
>