Saint Louis University
Advancement Division
Gift Receipting Policy
General Guidelines
1) Saint Louis University issues legal gift receipts for all charitable contributions, regardless of amount or value.
a) Exceptions include immaterial gifts-in-kind (e.g., small quantities of magazines, newspaper clippings, etc.) less than $75 in value and for which contributors are not expecting gift receipts.
2) Saint Louis University issues legal gift receipts only for charitable contributions. As defined in IRS publication 526, “A charitable contribution is a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value.” Charitable contributions are further defined by the University as follows:
a) Charitable contribution: A voluntary, irrevocable, and accepted transfer of money, property, or securities by a donor to Saint Louis University. The transfer must not have been made for consideration, or as a condition of a written or oral contract. The term “charitable contribution” is synonymous with “donation” or “gift” in the context of Saint Louis University policies and procedures. Corporate and private foundation gifts are commonly referred to as “grants.”
3) Saint Louis University does not issue legal gift receipts for non-deductible contributions as defined in IRS publication 526, including:
a) Contributions to specific individuals,
b) The portion of contributions from which a benefit is received or expected (“quid pro quo”),
i) The fair market value of substantial benefits, regardless of cost to the institution, is itemized on legal receipts in situations where the contribution is partially tax deductible
c) The value of time or services rendered,
d) Personal expenses (with a few exceptions),
e) IRA distributions (with the exception of IRA Charitable Rollovers made under the provisions of the Pension Protection Act of 2006),
f) Appraisal fees, and
g) Contributions of partial interest in property (e.g., the temporary right to use)
i) Under certain circumstances (such as in the case of artwork), fractional interests may be deductible
4) The IRS does not require the inclusion of “legal gift dates” on receipts. In fact, the practice is strongly discouraged, as it offers minimal value to the donor and subjects the recipient charity to auditing risk AND the obligation to “back up” the date. Except in the case of stock contributions and certain planned gifts, Saint Louis University does not list legal gift dates on receipts. Processing dates may be included only if clearly labeled as such.
5) The IRS does not require the inclusion of gift-in-kind values on receipts. It is the donor’s responsibility to substantiate the value of any gift-in-kind. Except in the case of stock contributions and certain planned gifts, Saint Louis University does not include these values in receipts. For insistent donors, the phrase “…which you have valued at $X.XX” may be inserted into the standard receipt text.
6) Gifts are generally processed within 24 hours of receipt of all necessary information (legal donor, designation/restriction, amount, etc.). Legal receipts are subsequently mailed (or otherwise delivered) within 48 hours of gift entry.
Impact of Pension Protection Act of 2006
Under section 1217 of the Pension protection Act of 2006, a donor may not claim a tax deduction for any monetary contribution made on or after 1/1/07 without a record of the contribution in the form of either a bank record (e.g., a canceled check) or a written communication from the charity (e.g., a receipt) showing the charity name, contribution date, and contribution amount. This provision is generally not held to change charities’ disclosure requirements detailed in IRS publication 1771.
Substantiation and Disclosure Requirements
Two general rules guide substantiation and disclosure requirements for federal income tax return reporting purposes:
1) The donor is responsible for obtaining a contemporaneous written acknowledgment from a charity for any single contribution of $250 or more before he/she can claim a charitable contribution on a federal income tax return.
a) An organization can provide either a paper or an electronic copy of a receipt, such as via an e-mail addressed to the donor.
b) Separate contributions of less than $250 need not be aggregated for the purposes of this requirement. Each payment may be considered a separate contribution.
2) The charitable organization is required to provide a written disclosure to a donor who receives goods or services in exchange for a single payment in excess of $75 (including gift and non-gift components).
Contemporaneous Receipting Requirement
A donor cannot claim a tax deduction for any single contribution of $250 or more without a contemporaneous, written acknowledgment (legal receipt) of the contribution. For the receipt to be considered contemporaneous, it must be received by the donor by the earlier of:
1) The date on which the donor actually files his or her individual federal income tax return for the year of the contribution, or
2) The due date (including extensions) of the tax return.
Required Receipt Components
1) Name of organization,
2) Amount of cash contribution,
3) Description (but not the value) of non-cash contribution,
4) Statement that no goods or services were provided by the organization in return for the contribution (if this is the case), and
5) Description and good faith estimate of the fair market value of substantial benefits, if any, that an organization provided in return for the contribution
a) A written disclosure must inform a donor that the amount of the contribution deductible for federal income tax purposes is limited to the excess of money (and the fair market value of property other than money) contributed by the donor over the value of goods or services provided in return by the organization
b) The fair market value of benefits is unrelated to their cost to the charitable institution
IRS Safe Harbor Rules for “Insubstantial” Gifts to Donors
IRS Safe Harbor Rules state that donors need not reduce their claimed charitable deductions by the value of small items or “insubstantial” benefits received. By extension, these insubstantial benefits need not be described or itemized on gift receipts. Goods and services received in exchange for contributions made in tax year 2007 are considered insubstantial if:
1) The fair market value of the benefits does not exceed the lesser of 2% of the payment or $89, or
2) The payment is at least $44.50, the items provided bear the organization’s name or logo (e.g., calendars, mugs, or posters), and the cost of these items is within the limits for “low-cost articles,” which is $8.90. Free, unordered low-cost articles are also considered to be insubstantial.
For more information refer to IRS publications 1771 and 526, as well as Internal Revenue Bulletin 2004-71 (“Rev. Proc. 2004-71”).
Events
Receipting for contributions made in whole or part in exchange for event attendance must comply with all related IRS guidelines. The fair market value of dinners, entertainment, and other quid pro quo associated with such events must be detailed in receipts as described in this policy.
Event-related benefits (including cultivation dinners) which were not promised in exchange for charitable contributions need not trigger the issuance of amended receipts. (Such a policy would effectively prohibit all donor cultivation involving meals, entertainment, etc.)
Membership Fees and Benefits Exceptions
Donors may be able to deduct membership fees or dues paid to charitable organizations. However, as with all other donations involving quid pro quo, only the amount exceeding the fair market value of substantial benefits is deductible. These benefits must be described on legal receipts.
An annual membership benefit is considered to be insubstantial if it is provided in exchange for an annual payment of $75 or less and consists of annual recurring rights or privileges, such as:
1) Free or discounted admissions to the charitable organization’s facilities or events,
2) Discounts on purchases of goods or services from the organization,
3) Preferred access to goods or services,
4) Free or discounted parking, and
5) Free or discounted admission to members-only events sponsored by an organization, where a reasonably projected per-person cost (excluding allocated overhead) is within the “low-cost articles” limits published by the IRS
Example: A charitable organization offers a $75 annual membership that allows free admission to all of its weekly events, plus a $20 poster. The receipt need only mention the $20 value of the poster, since the free admission would be considered insubstantial.
It is important to recognize the distinction between memberships (where quid pro quo is promised in return for payment) and recognition societies (where donors at certain levels are periodically recognized with the provision of benefits such as celebratory dinners, which have not been promised in return for their gifts) when assessing the impact of such benefits on receipting.
Athletics Tickets and Rights (“80/20 Rule”)
If, in return for a gift, a donor receives the right to buy tickets to an athletic event in the athletic stadium of a college or university, he/she may only claim 80% of the payment as a charitable contribution. If any part of the payment is for tickets (rather than the right to buy tickets) or any other substantial benefit, that portion is subtracted from the full gift amount and only 80% of the remainder may be claimed as a charitable contribution. Gift receipts should reflect these benefits and their impact.
IRA Charitable Rollovers (per Pension Protection Act of 2006)
Distributions of nontaxable assets via PPA 2006 charitable rollovers do not qualify as charitable distributions – i.e., they are not gifts in the technical sense, and donors cannot exclude such gift amounts from income. However, recipients of such rollovers are obliged to provide donors with contemporaneous written acknowledgements of their contributions as described in Treas. Reg. section 1.170A-13(f) – just as they would with any other outright contribution. Charities are advised to clarify that the gift is not being used to fund a donor advised fund or supporting organization.
Sample verbiage:
Thank you for your gift in the amount of $______from your Individual Retirement Account. We are writing to acknowledge that we received your gift directly from your plan trustee/administrator and that it is your intention for all or a portion of your gift to qualify as a qualified charitable distribution from your IRA under section 408(d)(8) of the Internal Revenue Code.
In that connection, we warrant to you that our organization is qualified under section 170(b)(1)(A) of the Internal Revenue Code and that your gift was not transferred to either a donor advised fund or a supporting organization as described in section 509(a)(3).
We further warrant that no goods or services of any value were or will be transferred to you in connection with this gift.
Please retain this letter with your important tax documents and provide a copy to your tax preparer.
Payroll Deductions
When a donor makes a single contribution of $250 or more by payroll deduction, the donor may substitute both of the following documents for a legal receipt when claiming their tax deduction:
1) A pay stub, Form W-2,Wage and Tax Statement, or other document furnished by the employer that sets forth the amount withheld by the employer and paid to a charitable organization, and
2) A pledge card that includes a statement to the effect that the organization does not provide goods or services in consideration for contributions to the organization by payroll deduction.
Each payroll deduction is treated as a separate contribution for purposes of the $250 threshold requirement for receipts.
Saint Louis University has adopted the industry standard practice of issuing individual receipts for each payroll deduction of $250 or more and itemizing others on calendar year-end consolidated receipts. Donors making a *single* gift, as opposed to a series of payments, via payroll deduction are receipted in the same manner as with other outright gifts.
Electronic Funds Transfers
Scheduled EFT contributions (i.e., those made in series, rather than one-time-only) are receipted in a manner identical to payroll deductions.
Unreimbursed Expenses
If a donor makes a single contribution of $250 or more in the form of unreimbursed expenses (e.g., out-of-pocket transportation expenses incurred in order to perform donated services for an organization), the donor must obtain a written acknowledgment from the organization containing:
1) A description of the services provided by the donor
2) A statement of whether or not the organization provided goods or services in return for the contributed services
3) A description and good faith estimate of the value of goods or services, if any, that the organization provided in return for the contribution
Saint Louis University provides these acknowledgements only upon request.
Gifts From Married Couples
When gifts are made by married couples, “legal credits” and “soft credits” are allocated pursuant to Saint Louis University policy. Regardless of the allocation, receipts are issued in both spouse’s names (unless the couple has requested otherwise).
Last Updated: 9.28.07 1