Donation Details

December 18, 2018

Donating money to our favorite charitable organization is a year-end ritual for many of us. While monthly giving has gained in popularity in recent years, most of us still tend to open up our wallets just a bit wider at the end of the year.

But what about the organization that we’re giving to? What are they required to do once they receive our donation? If you’re unsure, here’s a quick run-down of what you should expect.

For a standard donation, you should expect a receipt. While a charitable organization is not required to provide a receipt to donors unless the donation exceeds $250.00, most organizations do so anyway. Those that do not send a receipt will typically send a donation acknowledgement. In a pinch, donors can always use their cancelled check as a receipt should the organization not provide one.

A valuation of any items you may have received in exchange for your donation. Most receipts from a nonprofit organization typically include a disclaimer that states that you did not receive any goods or services in return for your donation. That means that if you are using your donation as a tax deduction, the amount of your deduction is the amount on the receipt. However, this process changes if in fact you do receive something in exchange for your donation. In that case, the acknowledgement letter must state the value of what was received and the subsequent value of your donation. Keep in mind that if you receive something relatively small in return such as a t-shirt or other small items, this cost is not filtered into the equation and your entire donation will remain tax deductible. However, should you receive something like tickets to a gala, a trip, or other similarly priced gifts, that will have to be acknowledged and factored into your donation total. The IRS has detailed information on their website, should you have any questions regarding this.

Goods and services donated should receive an acknowledgement, but should not include a dollar amount. Goods and services are common donations, and the organization that you are donating to should provide you with an acknowledgement letter that details what the goods and/or services donated were. The main difference between a monetary donation and goods and services is that goods and services donations should not include a dollar value on the acknowledgement or receipt. Assigning a value is the donor’s responsibility. You should also keep in mind that services donated are typically not tax deductible.

Of course, writing a check or donating goods and services isn’t the only way we can give to our favorite organization. Many nonprofits are able to accept alternative options such as donations of stocks and other securities. If you want to donate stocks instead of cash, be sure that you’ve held the stock for at least a year. It’s also important that the donated stock has increased in value, which will ensure that you receive a tax break while supporting the organization. If you do donate stock, the nonprofit should provide you with an acknowledgement or receipt that provides details on the stock given as well as the number of shares, but should not place a value on the stock. If you have additional questions, your financial advisor or CPA should be able to guide you in the right direction.

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2014-2018 Advisor Websites.

Written by Perigon Wealth

Latest Insights

Last Week in Review – September 16, 2022

Last week, stocks fell sharply as inflation fears intensified and short-term bond yields reached levels last seen in 2007. The S&P 500 Index recorded its most significant weekly drop since mid-June and hit its lowest point on an intraday basis since mid-July. Growth stocks fared worst, with the technology-heavy Nasdaq Composite falling nearly 5.5%. Communication services and information technology shares led the declines within the S&P 500 as Google parent Alphabet and Facebook parent Meta Platforms hit new 52-week lows. Industrials and materials shares were also fragile.

Inflation! Recession! Market Volatility! OH MY! How do we handle scary economic news?

The news – coming at us from every channel, broadcast, blog, or tweet – can sound scary and grim. Inflation, potential recession, rapidly rising interest rates, the wildly gyrating stock market … It’s enough to make us want to tune out the news completely or throw our investment statements in the shredder unopened.

Global Market Commentary August 2022

Global Equities sunk 3.68%% in August on fears of more aggressive interest rate hikes by central banks in their fight against soaring global inflation. The MSCI All-Country World Index is off 17.75% YTD, its worst eight-month start to a year since its inception. Global bonds were unable to provide reprieve, as the Bloomberg US Aggregate Bond and International Bond indexes fell 2.83% and 3.46% respectively this month and they too are off to their worst start in their index histories with YTD returns of negative 10.75% and 10.21% respectively.