Publication 557 |
2001 Tax Year |
Contributions
Contributions to domestic organizations described in this chapter,
except organizations testing for public safety, are deductible as
charitable contributions on the donor's federal income tax return.
Fundraising events.
If the donor receives something of value in return for the
contribution, a common occurrence with fundraising efforts, part or
all of the contribution may not be deductible. This may apply to
fundraising activities such as charity balls, bazaars, banquets,
auctions, concerts, athletic events, and solicitations for membership
or contributions when merchandise or benefits are given in return for
payment of a specified minimum contribution.
If the donor receives or expects to receive goods or services in
return for a contribution to your organization, the donor cannot
deduct any part of the contribution unless the donor intends to, and
does, make a payment greater than the fair market value of the goods
or services. If a deduction is allowed, the donor can deduct only the
part of the contribution, if any, that is more than the fair market
value of the goods or services received. You should determine in
advance the fair market value of any goods or services to be given to
contributors and tell them, when you publicize the fundraising event
or solicit their contributions, how much is deductible and how much is
for the goods or services. See Disclosure of Quid Pro Quo
Contributions in chapter 2.
Exemption application not filed.
Donors may not deduct any charitable contribution to an
organization that is required to apply for recognition of exemption
but has not done so.
Separate fund--contributions to which are deductible.
An organization that is exempt from federal income tax other than
as an organization described in section 501(c)(3) may, if it desires,
establish a fund, separate and apart from its other funds, exclusively
for religious, charitable, scientific, literary, or educational
purposes, fostering national or international amateur sports
competition, or for the prevention of cruelty to children or animals.
If the fund is organized and operated exclusively for these
purposes, it may qualify for exemption as an organization described in
section 501(c)(3), and contributions made to it will be deductible as
provided by section 170. A fund with these characteristics must be
organized in such a manner as to prohibit the use of its funds upon
dissolution, or otherwise, for the general purposes of the
organization creating it.
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