Q&A: Will a Plaque Recognizing a Donor’s Contribution Prohibit a Tax Deduction?

“Mere recognition” does not nullify a deduction.

Richard R. Hammar, Attorney, CPA
Bio
A member of our church made a substantial contribution for the erection of a stained glass window in our sanctuary. We would like to insert a small plaque recognizing the donor by name. A board member insists that doing so will preclude a charitable contribution deduction. Is this true?

The Internal Revenue Service (IRS) has observed:

Payments an exempt organization receives from donors are nontaxable contributions where there is no expectation that the organization will provide a substantial return benefit. Mere recognition of a . . . contributor as a benefactor normally is incidental to the contribution and not of sufficient value to the contributor to [preclude a charitable contribution deduction]. Examples of mere recognition [that do not nullify a charitable contribution deduction] are naming a . . . building after a benefactor” (IRS News Release IR-92-4).

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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