GC Nonprofit News Sponsor Article

This week's feature article by James Alex Bramer from our sponsor, VonLehman + Dean Dorton is titled, "Quid Pro Quo Donations: Charity, Tax Deductions and Compliance".

Not all contributions to a charity are tax-deductible by the donor, as in the case of “quid pro quo” donations. “Quid pro quo” is the exchange of one thing for another. In relation to charitable contributions, “quid pro quo” occurs when a charity receives a payment that includes a contribution and, in return, provides the donor with goods or services valued for less than the total payment.

A common example is fundraising events. A person might donate to a charity by buying tickets to the organization’s annual gala. If the ticket purchaser gets something back in the form of a “free” dinner and entertainment, then only the amount over and above the value of the dinner and entertainment is considered a charitable contribution.

How to Acknowledge and Disclose

Quid pro quo arrangements create an obligation for the charity: if your organization receives more than $75 and provides a benefit to the donor, you must advise the donor that it’s a quid pro quo contribution. No acknowledgement...Read more...