Non-profit Special Events – Is it deductible for tax purposes ?

Special events are an effective way for a non-profit to both raise money and also raise awareness of the organization and its mission in the community. Special events that are well planned and consistent year to year are often very successful. An important aspect, however, is the tax deductibility of purchases or contributions made by the attendees. Often the organization and the attendees incorrectly assume that all purchases of tickets, tables, registrations, auction items, etc., are 100% tax deductible. 

The IRS clearly states that, “If a donor received something of value in return for the contribution, a common occurrence with fund-raising efforts, part or all of the contribution may not be deductible.” 

So what is deductible? The amount that is deductible is actually the amount given over and above the fair market value of the event or purchase. This is where the organization should step in and give some assistance to the attendees.  Read the rest of this entry »