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charitable receipt for sponsorship included with a contract?

  • 1.  charitable receipt for sponsorship included with a contract?

    Posted 9 days ago

    Good Morning,

    Does anyone have experience with receipting a charitable contribution that was made in conjunction with a larger contract for products or services? I am looking for documentation or IRS references that state what should or should not be considered charitable.

     

    I found this example from Utah State that states that Affinity agreement royalties (e.g., pouring rights, alumni partnerships) are non-chartable.

    https://www.usu.edu/advancement/gac/whatisagift

     

    But what if there are Philanthropic dollars earmarked as part of a contract? In what situations would it be okay to issue a charitable receipt?

     

    Thank you for your insight!

     

    Nicole M. Duncan

    Senior Director, Annual Giving & Advancement Services

    Office of Institutional Advancement
     
    Office: 262-524-7245

    Cell: 262-235-2245
    carrollu.edu 
    nmduncan@carrollu.edu



    ------------------------------
    Nicole Duncan
    Senior Director, Annual Giving & Advancement Svcs
    Carroll University
    nmduncan@carrollu.edu
    ------------------------------


  • 2.  RE: charitable receipt for sponsorship included with a contract?

    Posted 9 days ago
    We need to read the entire contract to give you a full answer.  However, if the contract has language that says something like, "If you sign this agreement for services we will make a gift," it is not a gift.  The "donation" is contractually required.

    CASE issued separate guidance on these "corporate partnerships" years ago.  They have been common with foodservice agreements, affinity credit card agreements, exclusive pouring rights, and so forth.  The issue is that these companies are trying to secure a contract with you by sweetening the pot with the promise of a donation.  If that's what is going on here, then there is no countable gift.  The contract for goods and services cannot include a promised donation.  That must be separate and voluntary without any wink-wink or nod-nod.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: charitable receipt for sponsorship included with a contract?

    Posted 9 days ago
    Thanks, John! I am searching through IRS pub 526 to see if there is any language specific to contracts. Do you happen to know if there is a certain IRS pub that addresses this topic?

    Thanks!
    Nicole

    ------------------------------
    Nicole Duncan
    Senior Director, Annual Giving & Advancement Svcs
    Carroll University
    nmduncan@carrollu.edu
    ------------------------------



  • 4.  RE: charitable receipt for sponsorship included with a contract?

    Posted 9 days ago
    You are probably focusing too much on that one word (aka exchange transaction).  What you need is the portion of Publication 526 (page 7) discussing benefits in exchange for a gift.

    If you get a signed contract in exchange for making a donation, that's a disallowable benefit from an IRS perspective.

    Also, refer to the CASE Standards.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987