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  • 1.  Receiving money from Twitch - Gaming

    Posted 11-07-2022 01:54 PM
    Ball State University's eSports program is interested in pursuing the revenue/income options that are part of the Twitch video game streaming service.  Would be interested to hear from anyone else who is receiving money through Twitch. While the streaming service refers to financial transactions that support the gamers as "donations," my research has discovered that per the IRS, these are not charitable donations, but are income generating transactions. Other options for financial support include subscriptions or advertising. If your institution receives money through Twitch, would you share how you are doing so?  Thanks in advance!

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    Nancy Vinje Jones
    Director of Gift Administration & Reporting
    Ball State University Foundation
    nvinjejones@bsu.edu
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  • 2.  RE: Receiving money from Twitch - Gaming

    Posted 11-08-2022 10:07 AM
    Nancy, streamers on Twitch can raise money for charities through a donation program that Twitch provides in partnership with Paypal. The way it works is that viewers donate to a charity of the streamer's choice, and donations are processed through the Paypal Giving Fund. Like other 3rd-party platforms, from your perspective the hard credit is to PPGF, not the original donor.

    There are fundraising platforms like Funraise and Tiltify that offer options for organizations to have streamers to execute p2p crowdfunding campaigns. These 
    typically go directly to the nonprofit, rather than through the PayPal Giving Fund. 

    All of this is as distinct from 'bits', the virtual currency on Twitch, which can be used to 'Cheer' a streamer; or subs, which are subscription payments to a particular streamer. Those revenue streams can't be donated as part of Twitch's charity program. Bits and subscription revenue are shared 50/50 with Twitch. When the streamer is themselves a nonprofit organization, it does raise interesting questions about the potential tax deductibility of cheers and subs. Cheers, if they could be considered donations, would be GIKs, since they are a virtual currency. Subs are cash transactions, and they do provide benefits, so if they're gifts, they might be QPQs, depending on the benefits you choose to provide. If they're not donations, you get into the question of whether they're UBIT. I would seek advice of counsel on characterizing these revenue streams and reporting on them.


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

    Schedule a 30-minute consultation now:




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