Jump directly to the Content

Deductibility of Designated Contributions

IRS says contributions meant for specific individuals aren't deductible.

The IRS has clarified the deductibility of contributions that "earmark" a specific individual.

Many churches have collected special offerings for the benefit of a particular individual. For example, a church collects an offering to help pay the medical expenses of a person with a catastrophic and uninsured illness. Or, a church collects an offering to benefit an unemployed family, or a family whose house has been destroyed by fire or some other disaster. Are such "designated" offerings tax-deductible as charitable contributions by the donors? This has been a very difficult question to answer. The problem is that charitable contributions are tax-deductible only to the extent that they are made to a tax-exempt organization. The IRS ruled in 1962:

If contributions to the fund are earmarked by the donor for a particular individual, they are treated, in effect, as being gifts ...

Join now to access this member-only content

Become a Member

Already a member? for full access.

Related Topics:
Posted:
  • January 1, 1993

Related ResourcesVisit Store

Receipts for Donors
Receipts for Donors
16 letters and forms for providing receipts to donors for different donations.
Church Fundraising Campaigns
Church Fundraising Campaigns
Discover tips on raising and borrowing money.
Best Practices for Receiving Charitable Contributions
Best Practices for Receiving Charitable Contributions
Practical help and clear understanding on issues surrounding charitable contributions.
Nonprofit Finance
Nonprofit Finance
The Field Guide for Financial Operations of Ministries, Schools, and Other Public Charities