Thank you for voicing that again, John. I should probably have our director on here instead as she is the one who has had the direct contact with this donor (although that may not matter). I'm looking through communications and mainly see reference about wanting to offer some in-kind products, supplies, and/or services to support our work (at this time it's products/supplies). But I do see how that could be a fuzzy line between philanthropy and inducement. And even though in this case it "feels" like philanthropy, I see how it could easily turn from one to the other. I think we will be having a robust conversation about how to proceed with our counting of this gift. I'll also look around and see if I can find the CASE issued guidance around this sort of issue.
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Laura Young
Finance and Fundraising Assistant
The Lift Garage
laura@theliftgarage.org------------------------------
Original Message:
Sent: 12-23-2021 10:33 AM
From: John Taylor
Subject: Can credit be considered an in kind gift
I remain unconvinced this is a gift. CASE issued guidance a number of years ago discouraging the "counting" of this sort of corporate "partnership" as in many cases there wasn't any philanthropy - only a future inducement to purchase products from a particular vendor.
As previously stated, unless these credits have a cash redemption value or can be transferred or sold to another organization, I am not certain these credits qualify as either deductible gifts or countable assets per CASE. Of course, as a non-CASE organization, you are not bound by their counting standards. However, those standards might shed some light on what is philanthropy and what is a sales promotion.
John
John H. Taylor
Principal
John H. Taylor Consulting, LLC
2604 Sevier St.
Durham, NC 27705
919.816.5903 (cell/text)
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Original Message:
Sent: 12/23/2021 11:20:00 AM
From: Laura Young
Subject: RE: Can credit be considered an in kind gift
These responses are really helpful as we consider this gift. The credit has already been extended and we will be ordering fluids from the business on an as-needed basis. So I suppose the FMV of the product may change depending on when we order it. The product will also be given to us over the course of 2 years, as we will not use up the credit by the end of 2021, so will be ordering fluids off of this credit well into 2022. But it sounds like there is pretty solid agreement to count this credit as a gift in kind as we have done.
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Laura Young
Finance and Fundraising Assistant
The Lift Garage
laura@theliftgarage.org
Original Message:
Sent: 12-23-2021 09:58 AM
From: Isaac Shalev
Subject: Can credit be considered an in kind gift
Lesley, totally agree. I would not book it as a pledge either, but as a GIK. To me this is most analogous to the issuing of a gift card, though as you and others have rightly pointed out, there are other considerations that must be cleared.
One angle I hadn't originally considered that I don't think has been brought up is that this may end up being a gift of inventory. That will impact the deductibility of the gift to the donor, but it is important to the org to preserve the GIK character of the gift in receipting. It is likely that the credit amount is based on the MSRP or FMV of what is being sold, and it would not be appropriate to characterize that dollar amount as a donation.
Thank you,
Isaac Shalev
Data Strategy Expert
Sage70, Inc.
(917) 859-0151
isaac@sage70.com
Schedule a 30-minute consultation now:
Original Message:
Sent: 12/23/2021 9:00:00 AM
From: Lesley T Pratt
Subject: RE: Can credit be considered an in kind gift
I might book it as a "deep discount" if indeed it was not something regularly offered to other customers. Also, it could not be an exclusive relationship where you agree to only order certain goods from them and not other vendors. If both those conditions are met, then upon your institution's payment for the order you could book what was "credited" (i.e. discounted) as a gift-in-kind. I would never ever book it as a pledge. I know others may differ from this approach. : )
Original Message:
Sent: 12/22/2021 7:52:00 PM
From: John Smilde
Subject: RE: Can credit be considered an in kind gift
Assuming there are no strings attached, this is a nice deal for you if the purpose is to ensure donations are exactly what you need and directly support mission. It minimizes the possibility of getting goods that you kinda maybe will need and then go unused. However, I don't see any way the credit itself can be considered a gift. In fact, I think the IRS would frown on it as opening the door for being able to load up charitable donations in one year but deliver the donated goods in another. Likewise, I could see it becoming a clever ploy to meet fundraising goals this year by counting charitable contributions where the donor has told you they can't deliver until a subsequent year.
Hoy. I've been in this business too long. :)
John Smilde
Original Message:
Sent: 12/22/2021 12:50:00 PM
From: Laura Young
Subject: Can credit be considered an in kind gift
Hello. We find ourselves in a bit of a unique situation and I have tried to search for posts that may answer my question and am not finding what I need. A parts supplier has agreed to provide in kind donations to us on a monthly basis. They have chosen to extend a set dollar amount up front as a total credit and then we are essentially ordering specific goods on a monthly basis. Does the credit count as an in kind donation, or do we have to wait until we receive the goods and document that on a monthly basis? Any input is appreciated.
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Laura Young
Finance and Fundraising Assistant
The Lift Garage
laura@theliftgarage.org
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