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  • 1.  Question on Tax Deductible Contributions to a Photo Contest

    Posted 08-07-2024 02:10 PM

    Hello all, 

    My organization is hosting a pet photo contest this fall, the winners of which will get their pet's photo in a 2025 calendar, along with a couple of copies of the calendar. Entrants will pay $10 to submit a photo of their pet, and every vote cast is $1. 

    My question is, should the $10 entry fee be considered a tax-deductible contribution? And should entrants receive a tax letter?

    Another complication, the overall winner of the contest will likely receive a more substantial prize (we're still working out what that would be, but it will likely be a $100 gift card or possibly an overnight stay at a local resort). I'm unsure of the rules around contests like this, and if they are considered donations or something else. Any advice is appreciated!

    Thank you, 
    Abby Smith

    Manager, Advancement Services

    Oregon Humane Society 



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    Abby Smith
    Oregon Humane Society
    abby.smith@oregonhumane.org
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  • 2.  RE: Question on Tax Deductible Contributions to a Photo Contest

    Posted 08-07-2024 02:32 PM
    If it's a contest, the entrance fee isn't a charitable contribution - the entrant is purchasing the right to compete in a contest of skills for valuable prizes.

    Contests bring up many issues, including disclosure requirements (in Oregon), potential for UBIT liability, potential 990 disclosure requirements, and 1099 requirements for winners. You might also have to navigate sponsorship issues too. While the scale of contest you're proposing probably doesn't run up against some of these, you should seek legal sign-off to ensure you're doing it right!


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:






  • 3.  RE: Question on Tax Deductible Contributions to a Photo Contest

    Posted 08-07-2024 04:47 PM
    Abby - I completely agree with Isaac's take here and see no charitable contributions associated with this contest. Not sure 1099 concerns would come up with a prize at the $100 level but worth checking if a much higher level value prized is offered. All that said, any contest/game like this does need attention to make sure all of the tax concerns are addressed before anything is launched. 

    Wishing you much luck on this one!  -Amy





  • 4.  RE: Question on Tax Deductible Contributions to a Photo Contest

    Posted 08-07-2024 06:24 PM

    I really appreciate your insights, Isaac and Amy! Definitely want to make sure we are thinking through all of these pieces before launch. 

    Thank you for your help!

    Abby



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    Abby Smith
    Oregon Humane Society
    abby.smith@oregonhumane.org
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