Vendor Donation

Alison Kim:

Hello,

 How does your organization record a donation that is a deduction of their invoice? It's kind of like a payroll gift, but since it's an outside vendor, how do you record/receipt that according to the IRS guidelines?

Thanks in advance!

 

 

Allison, I recommend you post your question/read archives on fund services website (www.fundsvcs.org).  Their audience is much broader than RE users.  In my mind it's not really like a payroll gift - that is $.

From my limited experience with this, it can be complicated.  Is the invoice for goods or services?  Goods would be considered a GIK by some orgs and acknowledged with a receipt of "thank you for the donation of 6 pair of socks".  Donation of services are generally not considered tax deductible. 

If you don't receive/find a post from someone who you feel is an expert on it, I would contact your org's CPA/auditor.  I'm not an IRS expert by any means and I tend to be overly cautious as it's not worth risking an orgs tax status.  

JoAnn Strommen:

Allison, I recommend you post your question/read archives on fund services website (www.fundsvcs.org).  Their audience is much broader than RE users.  In my mind it's not really like a payroll gift - that is $.

From my limited experience with this, it can be complicated.  Is the invoice for goods or services?  Goods would be considered a GIK by some orgs and acknowledged with a receipt of "thank you for the donation of 6 pair of socks".  Donation of services are generally not considered tax deductible. 

If you don't receive/find a post from someone who you feel is an expert on it, I would contact your org's CPA/auditor.  I'm not an IRS expert by any means and I tend to be overly cautious as it's not worth risking an orgs tax status.  

 Allison - I agree with JoAnn that it can be complicated and does kind of depend on your organization and the type of info they need to capture for the Finance Department vs. the kind of info that Development/Advancement needs to have.  You should talk to your business office and see what they require and/or want/need to see or not (auditor/CPA).

I have, and a few orgs, been asked to capture the services info.  It's sort of like volunteer hours -- but not.  When I have had to capture it for the development department, I have recorded it as GIK and tagged it so that it did not come up as an actual item in the reporting. When doing this, I have made note of the value of the service, since we have an invoice, but that dollar amount, like with any other GIK, is never published in the acknowledgement letter or receipts.