What you have now described makes it sound like this is more akin to a "proceeds to benefit" event. I would not bother with trying to treat these sales as QPQs. The receipting and processing time will consume so much effort that I would not bother. And as less than 1 in 10 taxpayers itemize deductions, providing a tax receipt will not make a difference. Knowing that all proceeds are going to a worthy cause is reason enough to buy a book.
Instead, I would record a single lumpsum amount for the difference between FMV and the amount raised (after paying taxes) on a generic "Various Donors" record. The funds can all go to the scholarship account (once created), less expenses.
As with charity auctions, the "sale" is subject to state sales taxes. Your business office typically aggregates these and pays them on behalf of the proceeds. As I suggested previously, this should all be handled through that office.
Whether you want to treat the donated books a in-kind donations is up to you. However, as with the sales, that's a lot of extra work.
John
John H. Taylor, PrincipalJohn H. Taylor Consulting, LLC
2604 Sevier Street
Durham, NC 27705
919.816.5903 (cell/text)
Serving the Advancement Community Since 1987
Original Message:
Sent: 9/24/2024 9:51:00 AM
From: Gabrielle Read-Hess
Subject: RE: Book sale as fundraiser
Trying to make sure I understand fully: the books have already been donated, and let's say the FMV of a book is $10 and it's sold for $20. Do we record part or all of this as a gift (understanding only $10 would be receiptable), or none at all and we have no role to play if this truly is a book sale? This feels like a stupid question, but we'd still need to charge taxes on donated books?
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Gabrielle Read-Hess
Coe College
greadhess@coe.edu
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Original Message:
Sent: 09-23-2024 04:46 PM
From: John Taylor
Subject: Book sale as fundraiser
If not an auction, then it's a book sale - and taxes will likely need to be collected and paid. I would coordinate this activity with the Business Office.
The books may qualify as donations - but not the sales.
John
John H. Taylor, PrincipalJohn H. Taylor Consulting, LLC
2604 Sevier Street
Durham, NC 27705
919.816.5903 (cell/text)
Serving the Advancement Community Since 1987
Original Message:
Sent: 9/23/2024 5:39:00 PM
From: Gabrielle Read-Hess
Subject: RE: Book sale as fundraiser
Thanks so much for the input so far! I already have some good feedback to consider.
To be clear, John, this is NOT a silent auction - I only mentioned that to mean that if this is a similar scenario to how those work, I have no experience in that world.
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Gabrielle Read-Hess
Coe College
greadhess@coe.edu
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Original Message:
Sent: 09-23-2024 04:33 PM
From: Amy Phillips
Subject: Book sale as fundraiser
Gabrielle - One other consideration you and your team might want to review is related to the intention for this to become a scholarship. Most schools have minimum thresholds established before revenue raised can be recognized and have a dedicated scholarship fund/account id assigned. What arrangements have been made, or agreements drafted, that would ensure that there is a likelihood for sufficient funds being received to actually create a scholarship?
Also, unless I misunderstood the note, you referenced a book "sale" by the professor which wouldn't typically translate as any gifts to be recorded. Perhaps these could be treated as a sale along with an ask to purchasers to make a voluntary additional donation to support the scholarship effort? If the PTB insist on trying to find a way to create an opportunity for each transaction to be a gift with quid, then you are back to John's advice to ensure that the value of the book is clearly published and each prospective donor advised that the receipt for will reflect a tax deductible amount minus the value of the book. A very simple form could be created to make this work and I am happy to brainstorm this with you if you would like to touch base off list.
Good luck - Amy
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