Charitable Contribution
A charitable contribution is a donation of money, property, or goods to a qualified nonprofit organization. Contributions to 501(c)(3) organizations are typically tax-deductible.
A charitable contribution is a voluntary donation of money, property, or goods made to a qualified nonprofit organization. When the recipient is a 501(c)(3) organization, the contribution is generally tax-deductible for the donor under IRS rules.
Why It Matters for Fundraising
The tax-deductibility of charitable contributions is a meaningful incentive for many donors, especially those who itemize deductions. Nonprofits need to understand the rules so they can properly acknowledge gifts, issue tax receipts, and communicate the deductibility of donations accurately. Getting this wrong can create legal issues and erode donor trust.
Key Rules
Cash contributions are deductible up to 60% of a donor's adjusted gross income. Gifts of property are typically deductible at fair market value. Nonprofits must provide written acknowledgment for gifts of $250 or more. Quid pro quo contributions (where the donor receives something in return) require disclosure of the value received.