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Tax Exempt Organization Donation and advertising

  • 1.  Tax Exempt Organization Donation and advertising

    Posted 11 days ago

    A two-part question has been posed to me that I am hoping someone in the community can help me answer.

    A local credit union makes donations to our annual fundraiser event, we in turn place their logo on slides, banners, etc. We also issue them a receipt for their donation. It has come to our attention that because the credit union is tax-exempt, we should not be issuing a receipt, but just a thank you acknowledgement for their gift. What is the best practice for receipting a tax-exempt organization's donation?

    Second, this year the same organization has pledged to give a donation with the condition that we play a short video during our programming. Mostly the video is about how this credit union is assisting members of the community in reaching their goals; however, at the end of the video is a one liner that states, switch to x credit union today and discover banking with a partner who understand your mission and helps you reach your goals. Does this then constitute a quid pro quo? 

    All input on this welcome and encouraged!

    Debra Garcia
    Manager of Gift and Donor Records
    Azusa Pacific University

  • 2.  RE: Tax Exempt Organization Donation and advertising

    Posted 11 days ago
    There is no reason why you cannot issue your standard receipt.  True, they cannot use it for tax purposes.  But today, our receipts are timely and informative and a very efficient way of getting confirmation to the donor - nonprofit and otherwise - that you received their donation.

    You can go the thankyou letter route, too.  However, I'd be sending them a separate thank you letter in addition to the automated receipt!

    The video changes the donation into a payment for advertising.  It is no longer a gift.  The IRS stance on what constitutes advertising is quite clear (the statues are at the aasp download site), and this video crosses that line.


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

    Serving the Advancement Community Since 1987