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  • 1.  Art Donation

    Posted 07-17-2025 10:30 AM

    I have a strange situation and not sure how to record. 

     

    Several years ago, we had a large cash pledge made by a foundation that only made a few payments.  Then, recently, the foundation donated works of art to us (along with decades old appraisals) and we auctioned them off and just got the check from the auction.  How do we record this?  Our system won't allow us to apply an in-kind donation to the initial cash pledge.  Should we adjust the pledge down by the amount of the in-kind art donation.  And in lieu of an appraisal, can we use the price paid at the auction as the value to record?

     

    Thanks for any advice or areas I'm not clearly thinking about this.

     

    Lisa

     

    Lisa S. Geiersbach

    Director of Advancement Services

     

    Northwood University



  • 2.  RE: Art Donation

    Posted 07-17-2025 10:37 AM
    Provide a GIK receipt for the artwork. 

    Assuming that the foundation intended the artwork to count against the pledge, I would write down the outstanding pledge. The amount to write off depends on whether the foundation intends to honor the remainder. If so, you can write down the amount of the proceeds from the sale. If not, write the whole thing off. 


    Isaac Shalev
    Data Strategy Expert
    (917) 859-0151
    isaac@sage70.com

    Autocorrect was used in composting this email, please excuse any typos



    Original Message


  • 3.  RE: Art Donation

    Posted 07-17-2025 10:45 AM
    Additionally, the amount to record for the donated art is not what the artwork sold for. Rather, they should be the FMV of the art as of the date of the donation. Further, assuming this was a charity auction you should have stipulated a FMV at the time of the auction (that is the value you should use). The winning bidder is eligible for a charitable gift deduction for the difference between what they paid and that FMV (as reflected on a QPQ receipt).

    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


  • 4.  RE: Art Donation

    Posted 07-17-2025 04:36 PM
    I realized I neglected to provide the IRS blurb on conducting charity auctions:


    Returning to your original email, Lisa, I suspect that you didn't state a FMV at the auction, as those old appraisals would not have been valid. Unfortunately, this means that the winning bidders would not have been eligible to claim a deduction (as per this IRS Reference).

    You could use the winning bids as the countable value. However, those aren't the accurate amounts as donors tend to bid over the appraised value when they know the charity will benefit.

    I'd "book" the artwork at a value determined by your Gift Acceptance Committee or your CFO. You do need to account for the property donation on your books in some way. You were not given "cash."

    In the future, when receiving a gift of property you plan to sell - or need something reliable to book when there isn't an appraisal, you should research to identify a reasonable value. When it comes to donated artwork, I have sought guidance from local art dealers.

    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


    On Thu, Jul 17, 2025 at 11:44 AM John Taylor <johntaylorconsulting@gmail.com> wrote:
    Additionally, the amount to record for the donated art is not what the artwork sold for. Rather, they should be the FMV of the art as of the date of the donation. Further, assuming this was a charity auction you should have stipulated a FMV at the time of the auction (that is the value you should use). The winning bidder is eligible for a charitable gift deduction for the difference between what they paid and that FMV (as reflected on a QPQ receipt).

    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


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