Charitable Contributions

[Lion]

Our church has an Advent Giving Tree to benefit families identified by the town social worker; social worker gathers holiday wishes, mostly gift cards to grocery stores, pharmacies, Wal-Mart, etc., from those on her "watch list." So, a parishioner buys a $50 gift card at a grocery store and puts it under the tree; I deliver the gifts to the social worker who delivers them to the qualifying townspeople. How does that parishioner deduct his $50? His "bank record" has the name of the grocery store, not the charity. Our church doesn't show it on his pledge statement, since no money passed through the church's accounts. If he gave a used winter coat (which we also collect for a different agency) or used books to our annual fair, the church has a form for contributions of used goods. But, the $50 gift card is new and he received no goods nor services in exchange, so I guess the church has no responsibility to provide an acknowledgment? So, how does the parishioner deduct his $50?

[ChEAr$]

Xmas giving

He doesn't. It' a Christmas gift.

[Lion]

Hope there's another way...

That was one way I was looking at the situation. Hopefully, to help with local holiday giving, there's another way to look at it, legally.

[WhiteOleander]

No donation has been given to an organization. It is a gift to an individual. The social worker is only a go between delivering the gift. So, I don't see how this can be a deduction.

[Bees Knees]

A charitable deduction must be to an organization. A donation to an individual, even when it seems as though it is for a charitable cause, is not deductible.

The donation would have to be to the church, which in turn purchases the $50 gift cards for needy individuals in the community. Since religious organizations often provide food, clothing, and shelter for needy individuals, I see nothing wrong with the church doing the same through grocery gift cards.

[Lion]

So...

So, an individual can give $50 to a church and get a deduction or give $50 worth of used winter coats to a church and get a deduction, but if they give a $50 gift card to a church they get NO deduction. As much as I don't like that conclusion (I'm the one making this Sunday's announcement for our outreach committee!), I wasn't able to find anything more favorable to donors in my research.

[BOB W]

What if you bought food at the grocery store and donated the food to the church? You wouldn't have a receipt from the church would you> could you? What if the church received the gift card and gave you a receipt for the gift card????? Let the church give them to Social Services. Since the gift card does not have a name on it it may be considered a contribution to the general fund of the church.

Ask your church to be the "go-between".

[Lion]

Yes

The process is exactly that. I'm a member of the outreach committee at my church. The chairman asked the town social worker what she needed to help residents celebrate the holidays. She gave us a list, sad really, with requests for gift cards from Stop & Shop, CVS, Toys R Us, Wal-Mart, etc. We asked parishioners to bring in gift cards to our church. Since there's nothing to deposit into the church's bank account, the church accounting system doesn't put anything on parishioners' pledge statements to acknowledge their donations. So, do parishioners save their Wal-Mart receipts, for example, to deduct on their tax returns? Or, should the church be issuing a receipt for this kind of thing? Cash/checks/charge card donations go through the accounting system and give parishioners a record on their pledge statements. Gifts in kind, like the used winter coats for our coat drive, have a special receipt similar to the ones given by Goodwill. But, this is a third kind of item, not cash but not used; it's new and has a definite dollar value, but doesn't travel through the church's bookkeeping system. What does a parishioner need to satisfy the "bank record" or charity receipt requirement? The church would be buried in forms if they had to supply a receipt every time someone dropped a can of soup in the basket for the county's food bank or a new toy in the basket for group homes. But, is that what the new, tighter contribution rules require? It'll be sad if it's harder to raise donations. Cash doesn't mean much to a two-year old who was removed from his home due to abuse; a teddy bear is what he wants. But, if it turns into two steps -- parishioner gives money, then someone has to shop for the item -- we'll run out of volunteers as well as donations! Thanks for letting me vent.

[Chief]

some giving you write off

Some types of giving you simply give for the simple joy of giving. No regard to taking a tax credit for.

[Bees Knees]

I agree with Bob. If the Church is the go-between, a charitable donation deduction would be allowed. You didn't make that clear in your first post.

[Zee]

I agree with Bob. If the Church is the go-between, a charitable donation deduction would be allowed. You didn't make that clear in your first post.

I also agree. So, why not simply have the gift cards provided to the church and the church issue a receipt indicating the type & value of the card before distributing the cards to the volunteers? The taxpayer would also have his purchase receipt for the card to substantiate the deduction.

[SunTaxMan]

"Structuring" gifts to the Church

I agree with Zee and others. The Church, specifically the Church Treasurer, needs to do the leg work here, i.e., (1) tabulate the contributions for this "social" distribution and (2) produce a receipt for the contributor and (3) add this to the annual receipt prepared for the contributor. It may be wise here to show the contribution of tangible items separately from "cash" contributions, for the benefit of both the Church's and the contributor's records. The produced receipt(s) would have documention in comparing the receipts to the bank deposits.

Restrictions? The "gift," whether it is cash, a cash card, personal or real property, needs to have no restrictions in the Church's possession - it must not be "designated" to any specific person as it is received by the Church. The fact that it is not "visible" in the Church's records as part of a deposit to a bank account is not relevant. The Treasurer's records will document the gift in the Church's records - both INto and OUT of the Church.

The receipt for the direct purchase of the item contributed and its value is the responsibility of the contributor, not the Church. Advice on the appropriateness of keeping any receipts would be worth an "attaboy" to the Treasurer and should be appreciated by the parishoners. This same advice might also mention that IF, and this is a big IF, the PRIMARY purpose of the trip to the Wal-Mart, or wherever, was to purchase this gift for the Church, then those miles would also be deductible as Contribution miles. If the trip to the Church was specifically to bring the donation to the Church, and not to attend a regular service or other "regular" function of the Church, these miles would also be deductible, in that the miles are directly related to the gift. For example, I am involved in the audio/visual content of regular services at our Church. Just because I am doing this work, does not make the trips to the Church deductible {because I would be going for the service(s) anyway}, BUT, if I make a special trip to the Church to set up, take down, rehearse, or do something that is otherwise directly related to this function in the audio/visual work (and NOT to attend a regular service), these miles are also deductible (along with any tolls, parking, etc., involved).

[Lion]

Thank you, all

A big thanx to Sun and all who discussed this issue. Our treasurer is retiring to AZ, a nice thought during this nor'easter that's still sleeting and covering roads with ice; so this is a great time to get our documentation updated. We've had receipts for the used books, etc., that we accept for our annual fair; and, of course, cash/checks/charge/securities go through our bookkeeping system when they get deposited into a church account and ultimately show up on a parishioner's contribution statement. But, we haven't had a real tracking of gift cards, new toys, etc., that physically travel through our church other than lists kept by the committee involved with each project. I'll nudge the outreach chairman to sit down with the new treasurer to make sure we're supplying the acknowledgments we should. And, provide some education to our parish about things like mileage rules. Thanx for all the good ideas. Happy Holidays!