FundSvcs Community

We are working with a department on campus that has memberships available for purchase (Museum memberships not Athletics memberships).  They are considering a membership promotion for the upcoming holiday season where someone can purchase a membership and get one valued at $50 (Individual membership) to give to someone else.  The membership levels are as follows: Individual (cost $50), Duo (cost $75), Family (cost $100), and Ambassador (cost $500).  The benefits that are offered at these levels include free-year round general tour admission, discounts on select community events, Museum Store discount, early access to purchase tickets, and reserved seating.  None of these items have fair market value associated with them so the full amount of each of these memberships are considered a charitable contribution and therefore, fully tax deductible.  Is there FMV associated with the gifted membership (valued at $50)?  Any guidance would be greatly appreciated.

------------------------------
Stephanie Pollock
Gift Accounting Manager
Oakland University
spollock@oakland.edu
------------------------------

Original Message:
Sent: 11/14/2022 11:21:00 AM
From: Stephanie Pollock
Subject: Membership Promotion

We are working with a department on campus that has memberships available for purchase (Museum memberships not Athletics memberships).  They are considering a membership promotion for the upcoming holiday season where someone can purchase a membership and get one valued at $50 (Individual membership) to give to someone else.  The membership levels are as follows: Individual (cost $50), Duo (cost $75), Family (cost $100), and Ambassador (cost $500).  The benefits that are offered at these levels include free-year round general tour admission, discounts on select community events, Museum Store discount, early access to purchase tickets, and reserved seating.  None of these items have fair market value associated with them so the full amount of each of these memberships are considered a charitable contribution and therefore, fully tax deductible.  Is there FMV associated with the gifted membership (valued at $50)?  Any guidance would be greatly appreciated.

------------------------------
Stephanie Pollock
Gift Accounting Manager
Oakland University
spollock@oakland.edu
------------------------------

Original Message:
Sent: 11/14/2022 11:21:00 AM
From: Stephanie Pollock
Subject: Membership Promotion

We are working with a department on campus that has memberships available for purchase (Museum memberships not Athletics memberships).  They are considering a membership promotion for the upcoming holiday season where someone can purchase a membership and get one valued at $50 (Individual membership) to give to someone else.  The membership levels are as follows: Individual (cost $50), Duo (cost $75), Family (cost $100), and Ambassador (cost $500).  The benefits that are offered at these levels include free-year round general tour admission, discounts on select community events, Museum Store discount, early access to purchase tickets, and reserved seating.  None of these items have fair market value associated with them so the full amount of each of these memberships are considered a charitable contribution and therefore, fully tax deductible.  Is there FMV associated with the gifted membership (valued at $50)?  Any guidance would be greatly appreciated.

------------------------------
Stephanie Pollock
Gift Accounting Manager
Oakland University
spollock@oakland.edu
------------------------------

Original Message:
Sent: 11/14/2022 11:34:00 AM
From: Isaac Shalev
Subject: RE: Membership Promotion

Hi Stephanie,

The ability to gift a membership has no impact on the determination of the value of the membership benefits. If you have correctly determined that the benefits are of no market value, or qualify for the membership benefit exemptions, the membership fee is deductible, regardless of whether the donor buys it for themselves or for someone else. Note, however, that if gift memberships come with some special notification, eg mailing out a lovely holiday card, that's an additional benefit whose FMV must be considered. 

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

Schedule a 30-minute consultation now:

https://calendly.com/sage70/30min

Original Message:
Sent: 11/14/2022 11:21:00 AM
From: Stephanie Pollock
Subject: Membership Promotion

We are working with a department on campus that has memberships available for purchase (Museum memberships not Athletics memberships).  They are considering a membership promotion for the upcoming holiday season where someone can purchase a membership and get one valued at $50 (Individual membership) to give to someone else.  The membership levels are as follows: Individual (cost $50), Duo (cost $75), Family (cost $100), and Ambassador (cost $500).  The benefits that are offered at these levels include free-year round general tour admission, discounts on select community events, Museum Store discount, early access to purchase tickets, and reserved seating.  None of these items have fair market value associated with them so the full amount of each of these memberships are considered a charitable contribution and therefore, fully tax deductible.  Is there FMV associated with the gifted membership (valued at $50)?  Any guidance would be greatly appreciated.

------------------------------
Stephanie Pollock
Gift Accounting Manager
Oakland University
spollock@oakland.edu
------------------------------

Original Message:
Sent: 11/14/2022 11:53:00 AM
From: Stephanie Pollock
Subject: RE: Membership Promotion

I wanted to clarify that we are talking about Museum Memberships.  The promotion that's being considered is when someone buys a membership (either Individual, Duo, Family, or Ambassador) they get an individual membership (valued at $50) for free.  Does the "gifted" membership have a fair market value of $50 that reduces the charitable portion?

--

Stephanie L. Pollock

Gift Accounting Manager
Oakland University

O: (248) 364-6115 | C: (586) 707-1462

Aspire. Advance. Achieve. | The Campaign for Oakland University

Original Message:
Sent: 11/14/2022 11:34:00 AM
From: Isaac Shalev
Subject: RE: Membership Promotion

Hi Stephanie,

The ability to gift a membership has no impact on the determination of the value of the membership benefits. If you have correctly determined that the benefits are of no market value, or qualify for the membership benefit exemptions, the membership fee is deductible, regardless of whether the donor buys it for themselves or for someone else. Note, however, that if gift memberships come with some special notification, eg mailing out a lovely holiday card, that's an additional benefit whose FMV must be considered. 

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

Schedule a 30-minute consultation now:

https://calendly.com/sage70/30min

Original Message:
Sent: 11/14/2022 11:21:00 AM
From: Stephanie Pollock
Subject: Membership Promotion

We are working with a department on campus that has memberships available for purchase (Museum memberships not Athletics memberships).  They are considering a membership promotion for the upcoming holiday season where someone can purchase a membership and get one valued at $50 (Individual membership) to give to someone else.  The membership levels are as follows: Individual (cost $50), Duo (cost $75), Family (cost $100), and Ambassador (cost $500).  The benefits that are offered at these levels include free-year round general tour admission, discounts on select community events, Museum Store discount, early access to purchase tickets, and reserved seating.  None of these items have fair market value associated with them so the full amount of each of these memberships are considered a charitable contribution and therefore, fully tax deductible.  Is there FMV associated with the gifted membership (valued at $50)?  Any guidance would be greatly appreciated.

------------------------------
Stephanie Pollock
Gift Accounting Manager
Oakland University
spollock@oakland.edu
------------------------------

Original Message:
Sent: 11/14/2022 12:11:00 PM
From: Isaac Shalev
Subject: RE: Membership Promotion

Thanks for clarifying. The answer is the same, I think -- if you add a benefit that has $0 FMV to a membership whose benefits were already $0 of FMV, it still leaves you at $0 of FMV. 

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

Schedule a 30-minute consultation now:

https://calendly.com/sage70/30min

Original Message:
Sent: 11/14/2022 11:53:00 AM
From: Stephanie Pollock
Subject: RE: Membership Promotion

I wanted to clarify that we are talking about Museum Memberships.  The promotion that's being considered is when someone buys a membership (either Individual, Duo, Family, or Ambassador) they get an individual membership (valued at $50) for free.  Does the "gifted" membership have a fair market value of $50 that reduces the charitable portion?

--

Stephanie L. Pollock

Gift Accounting Manager
Oakland University

O: (248) 364-6115 | C: (586) 707-1462

Aspire. Advance. Achieve. | The Campaign for Oakland University

Original Message:
Sent: 11/14/2022 11:34:00 AM
From: Isaac Shalev
Subject: RE: Membership Promotion

Hi Stephanie,

The ability to gift a membership has no impact on the determination of the value of the membership benefits. If you have correctly determined that the benefits are of no market value, or qualify for the membership benefit exemptions, the membership fee is deductible, regardless of whether the donor buys it for themselves or for someone else. Note, however, that if gift memberships come with some special notification, eg mailing out a lovely holiday card, that's an additional benefit whose FMV must be considered. 

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

Schedule a 30-minute consultation now:

https://calendly.com/sage70/30min

Original Message:
Sent: 11/14/2022 11:21:00 AM
From: Stephanie Pollock
Subject: Membership Promotion

We are working with a department on campus that has memberships available for purchase (Museum memberships not Athletics memberships).  They are considering a membership promotion for the upcoming holiday season where someone can purchase a membership and get one valued at $50 (Individual membership) to give to someone else.  The membership levels are as follows: Individual (cost $50), Duo (cost $75), Family (cost $100), and Ambassador (cost $500).  The benefits that are offered at these levels include free-year round general tour admission, discounts on select community events, Museum Store discount, early access to purchase tickets, and reserved seating.  None of these items have fair market value associated with them so the full amount of each of these memberships are considered a charitable contribution and therefore, fully tax deductible.  Is there FMV associated with the gifted membership (valued at $50)?  Any guidance would be greatly appreciated.

------------------------------
Stephanie Pollock
Gift Accounting Manager
Oakland University
spollock@oakland.edu
------------------------------

Original Message:
Sent: 11/14/2022 5:02:00 PM
From: John H. Taylor
Subject: RE: Membership Promotion

Agreed.  However, in the original example, the described benefits have an FMV above $0.  See IRS Publication 526.  Only certain benefits for memberships of $75 and less can be ignored in calculating the FMV.  Several of the benefits mentioned in the original email do not fall in the ignore category and probably had sufficient value to render none of the $50 as deductible.

What is critical to do is make a good faith estimate regarding the FMV of membership benefits.  While some "free" admissions can be discounted, discounts at community events and access to reserved seats do carry an FMV - even if the member does not exercise the right to such access.

But yes, Stephanie, if you receive nothing in exchange for a $50 membership and purchase a second membership to give to someone else, that second membership is also deductible.

John

John H. Taylor

Principal

John H. Taylor Consulting, LLC

2604 Sevier St.

Durham, NC   27705

johntaylorconsulting@gmail.com

919.816.5903 (cell/text)

Serving the Advancement Community Since 1987

Original Message:
Sent: 11/14/2022 12:11:00 PM
From: Isaac Shalev
Subject: RE: Membership Promotion

Thanks for clarifying. The answer is the same, I think -- if you add a benefit that has $0 FMV to a membership whose benefits were already $0 of FMV, it still leaves you at $0 of FMV. 

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

Schedule a 30-minute consultation now:

https://calendly.com/sage70/30min

Original Message:
Sent: 11/14/2022 11:53:00 AM
From: Stephanie Pollock
Subject: RE: Membership Promotion

I wanted to clarify that we are talking about Museum Memberships.  The promotion that's being considered is when someone buys a membership (either Individual, Duo, Family, or Ambassador) they get an individual membership (valued at $50) for free.  Does the "gifted" membership have a fair market value of $50 that reduces the charitable portion?

--

Stephanie L. Pollock

Gift Accounting Manager
Oakland University

O: (248) 364-6115 | C: (586) 707-1462

Aspire. Advance. Achieve. | The Campaign for Oakland University

Original Message:
Sent: 11/14/2022 11:34:00 AM
From: Isaac Shalev
Subject: RE: Membership Promotion

Hi Stephanie,

The ability to gift a membership has no impact on the determination of the value of the membership benefits. If you have correctly determined that the benefits are of no market value, or qualify for the membership benefit exemptions, the membership fee is deductible, regardless of whether the donor buys it for themselves or for someone else. Note, however, that if gift memberships come with some special notification, eg mailing out a lovely holiday card, that's an additional benefit whose FMV must be considered. 

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

Schedule a 30-minute consultation now:

https://calendly.com/sage70/30min

Original Message:
Sent: 11/14/2022 11:21:00 AM
From: Stephanie Pollock
Subject: Membership Promotion

We are working with a department on campus that has memberships available for purchase (Museum memberships not Athletics memberships).  They are considering a membership promotion for the upcoming holiday season where someone can purchase a membership and get one valued at $50 (Individual membership) to give to someone else.  The membership levels are as follows: Individual (cost $50), Duo (cost $75), Family (cost $100), and Ambassador (cost $500).  The benefits that are offered at these levels include free-year round general tour admission, discounts on select community events, Museum Store discount, early access to purchase tickets, and reserved seating.  None of these items have fair market value associated with them so the full amount of each of these memberships are considered a charitable contribution and therefore, fully tax deductible.  Is there FMV associated with the gifted membership (valued at $50)?  Any guidance would be greatly appreciated.

------------------------------
Stephanie Pollock
Gift Accounting Manager
Oakland University
spollock@oakland.edu
------------------------------