If your PA/PTA is a 501(c)(3) organization, it should provide written acknowledgment of donations it receives (known as donation receipts) so that donors may claim a tax deduction for their contribution.* There are two types of donations that need to be acknowledged: one in which the donor does not receive anything in return (such as a standard cash donation), and one in which the donor receives goods or services in return for the donation (such as tickets to a school gala or auction). A donor can deduct only the amount of the contribution that exceeds the value of any goods or services he or she received in connection with the donation. Thus, if your PA/PTA provides goods or services to a donor in exchange for a contribution, your PA/PTA’s donation receipt should include the value of those goods or services, as described below, so the donor knows the correct amount to deduct. You should provide the donor with the donation receipt at the time of the contribution, or shortly thereafter.
Your PA/PTA can choose to have two separate standard donation receipt forms (one for each type of donation), or it may use a single standard receipt form. If you choose to have a single receipt form, the form should state:
- The name of the PA/PTA
- The amount of any cash contributed
- A description (but not the value) of any non-cash property or services contributed
It should also include the following language:
__ No goods or services were provided in exchange for this donation.
__ Goods and/or services were provided in exchange for this donation, and the fair market value of such goods and/or services is $____________.
For each donation, your PA/PTA should check the relevant box, and if the donor received goods or services, it should include the fair market value of those goods or services on the line above.
If your PA/PTA chooses to use a separate form for each type of donation (i.e., a form for donors who contribute and receive goods or services in return, and a form for donors who contribute without receiving anything), each form should include the three bullets above. The form for donors who do not receive goods or services should contain the “no goods or services” language shown above. The form for donors who received goods or services should include the “goods and services were provided in exchange” language shown above, as well as the value of the goods and services that were provided in return for the contribution.
*Federal tax law imposes two general disclosure rules: 1) a donor must obtain a written acknowledgment from a charity for any contribution before the donor can claim a charitable contribution on his/her federal income tax return**; and 2) a charitable organization must provide a written disclosure to a donor who makes a payment in excess of $75 partly as a contribution and partly for goods and services provided by the organization. While the only legally required disclosure action on the part of a charitable organization is the latter, it is considered best practice to provide a donation receipt for all donations.
**This is effective for tax years beginning after December 31, 2016, per the repeal of Section 170(f)(8)(D) under the new tax law.