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  • 1.  Deep Discount vs Partial Interest

    Posted 06-07-2024 11:18 AM

    We are facing some questions regarding discounts/credits to bills and whether they can be considered charitable.  Specifically, a company we regularly do business with has given us a credit towards our bill for their cloud services we purchase. CASE is pretty clear about measuring the intent of the discount/credit.  " If, however, the same discount applies to purchases made by the institution on a regular basis and is not uniquely identified as a special reduction to be considered as a donation, no gift should be counted.  Thus, do not count as gifts standard discounts afforded to an institution based on the nature of its business or because it is a  major or frequent customer."  

    My question is: is this more or less irrelevant because this is software and so the whole deal is partial interest and therefore non-charitable?  We're getting some individuals wanting to pursue more discounts with software companies we're in business with for the purpose of receiving intentionally charitable discounts.  But this would be fruitless due to the nature of partial interest. 

    Many Thanks!



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    Mary Derby
    Utah Valley University
    mary.derby@uvu.edu
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  • 2.  RE: Deep Discount vs Partial Interest

    Posted 06-07-2024 11:29 AM
    Yes, Mary. You are correct. The "deep discount" (or "bargain sale" as described by the IRS) pertains to transactions that are deductible in the first place.

    The use of something (partial interest without conveying ownership) or services are not deductible gifts per IRS Publication 526 and are not countable in fundraising reports per CASE. So, to your point, this contribution would not be reocrdable, period.

    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






  • 3.  RE: Deep Discount vs Partial Interest

    Posted 06-07-2024 11:34 AM

    I love hearing that I am correct.  We always appreciate your perspective, John! 



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    Mary Derby
    Utah Valley University
    mary.derby@uvu.edu
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