Meg, a few additional notes on your questions, in addition to John's excellent guidance (and reiterating that I can't give you legal advice and you should talk to counsel):
1 - The bobbleheads had the same FMV when you gave them out to students as they do now when you give them out to donors. The difference is that when you give something in exchange for a donation, you trigger the IRS's rules about QPQ contributions. You do not trigger those rules when you give away items as a promotional exercise. The value of the item didn't change, just which receipting rules apply.
4 and 6 raise similar issues, to which the general answer is that the receipt can provide the information of the value of items that may have been received, and can say, eg, that 'if you received any of these items, your deduction will be limited by their values, which are listed here.'
Re 6, if the premium is based on the actual chronological order of donors, it is not a game of luck, and your receipt language seems correct to me. My concern would be more about the value of the premium relative to the gift. If the premium is woth $200 on a $500 donation, it would be challenging to argue that a donor has no meaningful difference in intent between the two possible scenarios. Regardless, I thnk you have some obligation to update the platform once you know that the premium has been exhausted -- you can't misrepresent to donors that they might receive that additional premium once you know that they will not - and the more valuable the premium is, the more significant of an issue this becomes. The non-gift portion of the QPQ is essentially a commercial transaction, and you have to act in good faith, so you can't try to incentivize more contributors once you know, or can reasonably expect, that the premium is exhausted.
If, on the other hand, the premiums go to a randomly drawn group of donors, rather than the first X, it's definitley a game of chance.
Original Message:
Sent: 8/17/2026 10:16:00 AM
From: Meg Tallman
Subject: RE: Recognition Societies & FMV
Thank you for your responses, John. Understood that this is not legal advice. It helps us craft they types of questions to discuss internally, and the topics/proposals to take to our counsel.
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Meg Tallman
University of Delaware
mtallman@udel.edu
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Original Message:
Sent: 08-17-2026 09:02 AM
From: John Taylor
Subject: Recognition Societies & FMV
I urge you to seek counsel from your attorney. My advice and knowledge is not to be construed as official legal advice!
- Anything that can only be obtained by providing a donation is subject to IRS benefit rules. I cannot speak directly to your question about bobbleheads. However, I do know from advice provided by my lawyers that you must clearly state how a benefit item can be obtained easily and at no charge to the community at large to consider the benefit to have no value for QPQ purposes.
- Answered above. However, my counsel indicated that the free access or availability had to be prominent - no fine print or buried somewhere deep on a website.
- If an individual is invited because they made a gift, a QPQ exists. Regardless of whether you invite a few others who did not. The only way to bypass the QPQ rule is to make the invitation open to the community.
- That works. Our attorney at Duke required us to add the following language on all of our receipts to cover ourselves. He also required us to issue a 1099 if the FMV was over $600:
- The $75+ rule simply mandates a receipt if the gross amount is $75 or more and a benefit is provided. Under $75, no receipt is required, period. As an interesting side note, the IRS language for $250+ is not a requirement in the US. We are under no legal obligation to provide a receipt unless requested by the donor (unless a QPQ is involved). The language simply states that the donor "must obtain" a contemporaneous receipt to claim a deduction. My question is: Do you really want to risk ticking your donors off by not acknowledging their gifts?
- For this one, you really need legal advice. I consulted with one organization whose lawyer ruled this sort of scheme a game of chance (and, when you think about it, it is), thereby nullifying tax deductibility.
John
John H. Taylor, Principal
John H. Taylor Consulting, LLC
2604 Sevier Street
Durham, NC 27705
919.816.5903 (cell/text)
Serving the Advancement Community Since 1987
Original Message:
Sent: 8/17/2026 9:19:00 AM
From: Meg Tallman
Subject: RE: Recognition Societies & FMV
John, I appreciate the clarity you provide. I have relayed your helpful guidance and lively discussions have ensued. Follow-up questions have come up. Please forgive the multi-part question. You know better than I do how important compliance is and how many angles people ask questions from.
1) FMV of items deemed not valuable to the department. They are leftovers taking up space that the department doesn't want to send to landfill.
This includes the item mentioned above:
B. Leftover items from a sporting event give-away. No one was charged for them when they are give-aways. Students did not have to purchase tickets to attend the event where they were viven away for free Must a FMV be applied to them if they are later given to donors?
The argument is that students (donors or not) are permitted free access to the games where the promotional items are give-aways. So for students who chose to attend an event, the items were free of charge.
Can you help me with the words to make a case that a bobblehead has FMV when it is given out to students who were donors, but given freely to students who attended games?
2) FMV and "open to the public". Let's just use the ice cream example that you commented on as an item with FMV. If the ice cream is offered at a public donor-oriented celebration, can the team add wording on the signs or promotional materials to the effect that "donation not required to receive a scoop of ice cream" in an effort to make it an item that anyone can receive for no cost? If so, what are the boundaries on that? How large does the print need to be? Are there specific words needed?
3) Cultivation events that include donors, but not only donors, for the purpose of showing new opportunities to support the institution. Let's say that such an event has food or a ticket to a concert that others have to pay for.
A. If the donor is included for reasons other than their past giving, for example, their rating, or their past participation in the same type of event, then does does attending the event have any bearing on their past receipt?
B. Individuals associated with Private Foundations adn Donor Advised Funds might logically be included in these, again, not based on their past gifts, but how else might they learn about where to direct future gifts? What is permitted. How are schools managing this?
4) Year-end restated tax receipt concept. Let's say that donors in May don't know at the time of their gift that they will be treated to ice cream in June. Is it viable to send out re-stated tax receipts in January that indicate the FMV? Even thought this might not be good for the relationship, does it capture the legal compliance?
5) Not receipting under $75. My understanding is that IRS requires that receipts are issued for gifts of $250+ or $75+ when there are FMV items. We currently receipt for all amounts either digitally same day or within a couple of business days of processing the gift. If there is nothing of value at the time of the gift, would it be wiser not to issue a receipt fol smaller amount at the time it is processed? Then if a FMV item is related to that gift later, issue a receipt at year-end? [Sounds tough to administer!]
6) "While supplies last" FMV receipting. Consider how a receipt should read if donors who give through a certain platform within specific dates are eligible for an item with FMV, but the item is "While supplies last", meaning that the promotion is not going to be reordered if its fully consumed. How might this language be modified in order to being compliant, given that perhaps there are only 1,000 of something, and the 1,001st person can't be discerned at the moment they make a gift, so the receipt language can't be edited in real time. Here is a possible way to phrase it. "Unless otherwise stated, no goods or services were received in exchange for this gift. If you received [the item] as part of your donation, $4.70 of your gift will be considered a premium for tax purposes."
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Meg Tallman
University of Delaware
mtallman@udel.edu
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