Expert: Harvey Mechanic - 11/4/2009

Question
We are raising money for our childrens ministry and giving away T-shirts. In our announcement we stated:
               "New Vineyard T-Shirts"
Available at the media center suggested donation for adult sizes $20 & $15 for children. Donations support our Children's Ministry.

People have donated $20, $15, $10 & $1 and some who couldn't donate and asked were given T-Shirts. Some people donated more. Is all of the donations tax deductible?

Answer
See the IRS Publication "Charitable Donations --- Substantiation
and Disclosure Requirements"
www.irs.gov/pub/irs-pdf/p1771.pdf

on pdf page 13 details of the "quid pro quo" rules.  Your presentation puts the solicitation squarely in the situation where someone is expecting something of certain value in return for the monetary gift.  Therefore, not all of the donation is deductible.

Note, from  IRS Publication 526 "Charitable Donations"
www.irs.gov/pub/irs-pdf/p526.pdf
on pdf page 2 first column:
"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 expect-
ing to get, anything of equal value."

Now, if the church or ministry stated that it had a bunch of t-shirts and anyone who requested would receive one and we also would like donations for the childrens' ministry, then that would result in all of the donation being deductible, even if you added that we suggest a $20 donation.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com