Providing Documentation to Donors

PTA members and contributors often assume any payment they make to a PTA in conjunction with a fundraising event is tax deductible. However, rules and limitations exist for the deductibility of such payments. See National PTA’s Back-to-School Kit sections Finance and Fundraising.

State and federal law requires that tax-exempt charitable organizations provide donors with receipts or other forms of documentation of contributions for a cash donation. Failure to comply may result in denial of deductions for donors and the imposition of penalties on the organization.

Recent changes to tax laws require the donor to obtain a receipt for every cash donation regardless of the amount. A donor must have a canceled check, bank record or receipt that shows the name of the PTA to which the contribution was made, the date and the amount of the contribution; therefore PTAs must give a receipt for every cash donation.

In-kind contributions of $250 or more require written acknowledgment from the PTA that lists the items donated and includes the PTA’s Employer Identification Number.

Upon receiving a quid pro quo contribution of $75 or more, PTAs must provide written acknowledgment that quantifies the value of the donation (cash-equivalent) and documents how the donation was received (cash, goods or services).

In all cases, be sure to thank the donor for her/his generous support (Donation Receipt).

Quid Pro Quo Contributions

Payments made partly as a contribution and partly for goods and services provided to the donor from the charity are known as quid pro quo contributions. For example, when a donor pays $100 for a concert ticket that would normally be valued at $40, $60 would be tax deductible. The quid pro quo contribution is the total amount paid, not the deductible amount. Therefore, in this case, because the donor paid $100, a disclosure statement must be provided.

In the case of a large cash donation or an endowment, an association should contact district PTA or the State PTA office for guidance.

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