Jump directly to the Content

Q&A: What Counts as a Tax-Deductible Donation?

What is—and isn't—tax-deductible for donors who attend a church fundraising event.

Q&A: What Counts as a Tax-Deductible Donation?
Image: Aaron Burden / Unsplash

Our youth group hosted a spaghetti dinner to raise money for hurricane disaster relief. How do we determine what is a donation and what is payment for the spaghetti dinner, or can a donor’s entire check for the dinner work as a tax-deductible donation?

If the understanding with the participants was that the “price” of the dinner was a donation of any amount, the Internal Revenue Service considers this to be a quid pro quo arrangement. Under such an arrangement, the value of the dinner (not the dinner’s actual cost) is what you use to determine the nondeductible amount. In making that determination, the law allows you to make a “good faith estimate.” For instance, you could say that the value of the dinner is worth what a comparable meal would cost at Fazoli’s.

However, if the understanding was that it was a free dinner and an “ask” was ...

Join now to access this member-only content

Become a Member

Already a member? for full access.

Related Topics:
Posted:
  • November 9, 2017

Related ResourcesVisit Store

Planning a Church Building Project
Planning a Church Building Project
Learn about zoning laws, property sales, church construction, financing, and more.
Nonprofit Finance
Nonprofit Finance
The Field Guide for Financial Operations of Ministries, Schools, and Other Public Charities
Best Practices for Receiving Charitable Contributions
Best Practices for Receiving Charitable Contributions
Practical help and clear understanding on issues surrounding charitable contributions.
Church Fundraising Campaigns
Church Fundraising Campaigns
Discover tips on raising and borrowing money.