FundSvcs Community

Hey all –

We are working with a new vendor who is offering a service similar to the "buy now, pay later" short-term payment option offered by services like Paypal – ie, 4 equal installments charged monthly.  The process is essentially that the donor's card is charged for the smaller amount by this vendor after filling out their giving form/contract, but then the vendor is then charging the whole amount on the vendor card via our credit card payment site.  So, we receive upfront the whole amount, but the donor is making 4 monthly payments to this vendor.

The vendor is insisting that the original donor is the legal hard credit donor, even though the vendor's name is on the charge when it came through our merchant process.  I disagree: the donor's money never entered into our hands – I think of it as if they collected the credit card gift and then wrote us a check, the donor of that check is the hard credit donor, not the person they collected from initially.  We can certainly give the original donor soft credit, but it's not a tax-deductible gift.  The vendor is trying to argue that it is like a wire transfer – but my counter is that with a wire, the money left the donor's account straight into ours.  There's a clear chain of custody in that instance.

I tried poking around the IRS publications for a ruling on who the donor is for credit card gifts – but not finding anything.  The CASE guidelines I have (not the most recent) references "credit to last entity" which I think confirms my argument above, but it is not specific to this particular example.  "In most cases where a contribution passes through several entities – such as from an individual to an organization to an institution, or from one organization to another organization to an institution, cite as the source of the gift the last of the entities through which it passes before reaching the institution."

Any advice or meaty citations?

Thanks!

---------------------------------------------------

Aimee S. Fitzgerald, MLIS

Executive Director, Advancement Services

University Advancement

William & Mary

asfitzgerald@wm.edu

(o) 757-221-1196

(c) 757-634-7704

Hey all –

We are working with a new vendor who is offering a service similar to the "buy now, pay later" short-term payment option offered by services like Paypal – ie, 4 equal installments charged monthly.  The process is essentially that the donor's card is charged for the smaller amount by this vendor after filling out their giving form/contract, but then the vendor is then charging the whole amount on the vendor card via our credit card payment site.  So, we receive upfront the whole amount, but the donor is making 4 monthly payments to this vendor.

The vendor is insisting that the original donor is the legal hard credit donor, even though the vendor's name is on the charge when it came through our merchant process.  I disagree: the donor's money never entered into our hands – I think of it as if they collected the credit card gift and then wrote us a check, the donor of that check is the hard credit donor, not the person they collected from initially.  We can certainly give the original donor soft credit, but it's not a tax-deductible gift.  The vendor is trying to argue that it is like a wire transfer – but my counter is that with a wire, the money left the donor's account straight into ours.  There's a clear chain of custody in that instance.

I tried poking around the IRS publications for a ruling on who the donor is for credit card gifts – but not finding anything.  The CASE guidelines I have (not the most recent) references "credit to last entity" which I think confirms my argument above, but it is not specific to this particular example.  "In most cases where a contribution passes through several entities – such as from an individual to an organization to an institution, or from one organization to another organization to an institution, cite as the source of the gift the last of the entities through which it passes before reaching the institution."

Any advice or meaty citations?

Thanks!

---------------------------------------------------

Aimee S. Fitzgerald, MLIS

Executive Director, Advancement Services

University Advancement

William & Mary

asfitzgerald@wm.edu

(o) 757-221-1196

(c) 757-634-7704

Hey all –

We are working with a new vendor who is offering a service similar to the "buy now, pay later" short-term payment option offered by services like Paypal – ie, 4 equal installments charged monthly.  The process is essentially that the donor's card is charged for the smaller amount by this vendor after filling out their giving form/contract, but then the vendor is then charging the whole amount on the vendor card via our credit card payment site.  So, we receive upfront the whole amount, but the donor is making 4 monthly payments to this vendor.

The vendor is insisting that the original donor is the legal hard credit donor, even though the vendor's name is on the charge when it came through our merchant process.  I disagree: the donor's money never entered into our hands – I think of it as if they collected the credit card gift and then wrote us a check, the donor of that check is the hard credit donor, not the person they collected from initially.  We can certainly give the original donor soft credit, but it's not a tax-deductible gift.  The vendor is trying to argue that it is like a wire transfer – but my counter is that with a wire, the money left the donor's account straight into ours.  There's a clear chain of custody in that instance.

I tried poking around the IRS publications for a ruling on who the donor is for credit card gifts – but not finding anything.  The CASE guidelines I have (not the most recent) references "credit to last entity" which I think confirms my argument above, but it is not specific to this particular example.  "In most cases where a contribution passes through several entities – such as from an individual to an organization to an institution, or from one organization to another organization to an institution, cite as the source of the gift the last of the entities through which it passes before reaching the institution."

Any advice or meaty citations?

Thanks!

---------------------------------------------------

Aimee S. Fitzgerald, MLIS

Executive Director, Advancement Services

University Advancement

William & Mary

asfitzgerald@wm.edu

(o) 757-221-1196

(c) 757-634-7704

Hey all –

We are working with a new vendor who is offering a service similar to the "buy now, pay later" short-term payment option offered by services like Paypal – ie, 4 equal installments charged monthly.  The process is essentially that the donor's card is charged for the smaller amount by this vendor after filling out their giving form/contract, but then the vendor is then charging the whole amount on the vendor card via our credit card payment site.  So, we receive upfront the whole amount, but the donor is making 4 monthly payments to this vendor.

The vendor is insisting that the original donor is the legal hard credit donor, even though the vendor's name is on the charge when it came through our merchant process.  I disagree: the donor's money never entered into our hands – I think of it as if they collected the credit card gift and then wrote us a check, the donor of that check is the hard credit donor, not the person they collected from initially.  We can certainly give the original donor soft credit, but it's not a tax-deductible gift.  The vendor is trying to argue that it is like a wire transfer – but my counter is that with a wire, the money left the donor's account straight into ours.  There's a clear chain of custody in that instance.

I tried poking around the IRS publications for a ruling on who the donor is for credit card gifts – but not finding anything.  The CASE guidelines I have (not the most recent) references "credit to last entity" which I think confirms my argument above, but it is not specific to this particular example.  "In most cases where a contribution passes through several entities – such as from an individual to an organization to an institution, or from one organization to another organization to an institution, cite as the source of the gift the last of the entities through which it passes before reaching the institution."

Any advice or meaty citations?

Thanks!

---------------------------------------------------

Aimee S. Fitzgerald, MLIS

Executive Director, Advancement Services

University Advancement

William & Mary

asfitzgerald@wm.edu

(o) 757-221-1196

(c) 757-634-7704