FundSvcs Community

Hi All,

I've done some research here and on the IRS sites about nonsubstantial gifts and QPQ but I'm asking for confirmation that I am understanding this correctly or correction if I'm not, thank you. 

We would like to give token/insubstantial gifts for a Spring fundraiser in return for a donation and we want the full donation to count as deductible, if possible.

The gifts would be water bottle stickers that display the department's logo/name.

I don't know the cost of the stickers yet but I'm thinking anywhere from $0.40 to $1.00 per sticker, well below the $13.20 maximum for token gift. But I also know that not all donations will meet the minimum gift requirement of $66.00. In those cases, where the donation is less than $66.00, I believe we would apply the 2% rule, which is that the token gift can't be more than 2% of the donation.

For example: If a sticker costs $1.00 and the donor gives us $5.00, that would be a 20% benefit to the donor so the deductible portion of the donation would only be $4.00 so we'd have to reduce the amount of their deducible donation on their receipt.

If the sticker cost us $0.40 and a donor gave a $5.00 donation, that would be an 8% benefit and so we'd have reduce the amount of their deducible donation on their receipt.

If the donor gave $20.00 and the sticker cost $0.40 that would be a 2% benefit which would meet the 2% rule so the full $20 would be deductible and we would not have to note this on the receipt.

Also, is the "cost" that is used for the maximum benefit and 2% rule refer to the wholesale cost or the FMV?  I see people using both and I can't determine the context or if they're just using them interchangeably.

Thank you!

Sarah

Hi All,

I've done some research here and on the IRS sites about nonsubstantial gifts and QPQ but I'm asking for confirmation that I am understanding this correctly or correction if I'm not, thank you. 

We would like to give token/insubstantial gifts for a Spring fundraiser in return for a donation and we want the full donation to count as deductible, if possible.

The gifts would be water bottle stickers that display the department's logo/name.

I don't know the cost of the stickers yet but I'm thinking anywhere from $0.40 to $1.00 per sticker, well below the $13.20 maximum for token gift. But I also know that not all donations will meet the minimum gift requirement of $66.00. In those cases, where the donation is less than $66.00, I believe we would apply the 2% rule, which is that the token gift can't be more than 2% of the donation.

For example: If a sticker costs $1.00 and the donor gives us $5.00, that would be a 20% benefit to the donor so the deductible portion of the donation would only be $4.00 so we'd have to reduce the amount of their deducible donation on their receipt.

If the sticker cost us $0.40 and a donor gave a $5.00 donation, that would be an 8% benefit and so we'd have reduce the amount of their deducible donation on their receipt.

If the donor gave $20.00 and the sticker cost $0.40 that would be a 2% benefit which would meet the 2% rule so the full $20 would be deductible and we would not have to note this on the receipt.

Also, is the "cost" that is used for the maximum benefit and 2% rule refer to the wholesale cost or the FMV?  I see people using both and I can't determine the context or if they're just using them interchangeably.

Thank you!

Sarah

Hi All,

I've done some research here and on the IRS sites about nonsubstantial gifts and QPQ but I'm asking for confirmation that I am understanding this correctly or correction if I'm not, thank you. 

We would like to give token/insubstantial gifts for a Spring fundraiser in return for a donation and we want the full donation to count as deductible, if possible.

The gifts would be water bottle stickers that display the department's logo/name.

I don't know the cost of the stickers yet but I'm thinking anywhere from $0.40 to $1.00 per sticker, well below the $13.20 maximum for token gift. But I also know that not all donations will meet the minimum gift requirement of $66.00. In those cases, where the donation is less than $66.00, I believe we would apply the 2% rule, which is that the token gift can't be more than 2% of the donation.

For example: If a sticker costs $1.00 and the donor gives us $5.00, that would be a 20% benefit to the donor so the deductible portion of the donation would only be $4.00 so we'd have to reduce the amount of their deducible donation on their receipt.

If the sticker cost us $0.40 and a donor gave a $5.00 donation, that would be an 8% benefit and so we'd have reduce the amount of their deducible donation on their receipt.

If the donor gave $20.00 and the sticker cost $0.40 that would be a 2% benefit which would meet the 2% rule so the full $20 would be deductible and we would not have to note this on the receipt.

Also, is the "cost" that is used for the maximum benefit and 2% rule refer to the wholesale cost or the FMV?  I see people using both and I can't determine the context or if they're just using them interchangeably.

Thank you!

Sarah

Hi All,

I've done some research here and on the IRS sites about nonsubstantial gifts and QPQ but I'm asking for confirmation that I am understanding this correctly or correction if I'm not, thank you. 

We would like to give token/insubstantial gifts for a Spring fundraiser in return for a donation and we want the full donation to count as deductible, if possible.

The gifts would be water bottle stickers that display the department's logo/name.

I don't know the cost of the stickers yet but I'm thinking anywhere from $0.40 to $1.00 per sticker, well below the $13.20 maximum for token gift. But I also know that not all donations will meet the minimum gift requirement of $66.00. In those cases, where the donation is less than $66.00, I believe we would apply the 2% rule, which is that the token gift can't be more than 2% of the donation.

For example: If a sticker costs $1.00 and the donor gives us $5.00, that would be a 20% benefit to the donor so the deductible portion of the donation would only be $4.00 so we'd have to reduce the amount of their deducible donation on their receipt.

If the sticker cost us $0.40 and a donor gave a $5.00 donation, that would be an 8% benefit and so we'd have reduce the amount of their deducible donation on their receipt.

If the donor gave $20.00 and the sticker cost $0.40 that would be a 2% benefit which would meet the 2% rule so the full $20 would be deductible and we would not have to note this on the receipt.

Also, is the "cost" that is used for the maximum benefit and 2% rule refer to the wholesale cost or the FMV?  I see people using both and I can't determine the context or if they're just using them interchangeably.

Thank you!

Sarah