Booster Clubs may receive monetary or non-monetary contributions from individuals or businesses. These are tax-deductible because of the Booster Club's 501(c)(3) status. In order to allow the individuals or businesses to deduct these contributions on their tax returns, the Booster Club must send them a copy of the Booster Club’s Determination Letter indicating that the Booster Club is a 501(c)(3) organization.
For contributions received, the Booster Club may want to send a thank you note along with a copy of the Determination Letter. The thank you note may indicate what was contributed or donated. If the gift is monetary, the dollar amount may be indicated. If the gift is not monetary, the estimated value should not be included in the thank you note. It is the responsibility of the individual or business that provided the gift to determine the value that they would report on
their tax return.
Note: Even though contributions or donations received will ultimately support the student group at a school, the gift is still considered to be a gift to the Booster Club and not to the school or to the District.
Checks to the Booster Club can be made out to : Valencia Vikings Choir Booster Club
Quid Pro Quo Contributions Received
According to the IRS, a 501(c)(3) organization must provide a written disclosure statement to donors who make a payment, described as a “quid pro quo contribution,” in excess of $75. A quid pro quo contribution is a payment made partly as a contribution and partly for goods or services provided to the donor by the charitable organization. An example of a quid pro quo contribution is where the donor gives a Booster Club $100 in consideration for a concert ticket valued at $40. In this example, $60 would be deductible. Because the donor’s payment (quid pro quo contribution) exceeds $75, the disclosure statement must be furnished, even though the deductible amount does not exceed $75. Separate payments of $75 or less made at different times of the year for separate fundraising events should not be aggregated for the purposes of the $75 threshold.
The required written disclosure statement must:
inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the value of goods or services provided by the charitable organization, and
provide the donor with a good-faith estimate of the value of the goods or services that the donor received.
The Booster Club must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when the associated contribution is actually received. A penalty is
imposed on charitable organizations that do not meet the disclosure requirements. For failure to make the required disclosure in connection with a quid pro quo contribution of more than $75, there is a penalty of $10 per contribution, not to exceed $5,000 per fund-raising event or mailing.
Many of our Choir parents work at companies that have a corporate matching program. This is a program in which the company matches donations made by employees to eligible nonprofit organizations. Some companies will match an employee’s donation to a charity one-to-one, but others match donations two-to-one and some even match three-to-one. Find out if your company has a donation matching program and learn the rules and details. Easily make your donation be worth two to four times as much as you donate.
When the Booster Club contributes directly to the student group, the Club should receive a Tax-exempt Status/Donation Acknowledgment Form from either the school or the District. A District employee should complete the form when the donation is made, which can be obtained from the school site office.
Example: The Booster Club is funding a portion of a student group’s trip for a competition. The trip costs $50,000, and the Booster Club has agreed to pay $35,000 of the expense. Therefore, the students must pay the remaining $15,000. The $35,000 that the Booster Club donated is considered a contribution to that particular District student group and should be documented on the Tax-exempt Status/Donation Acknowledgment Form.
The Tax-exempt Status/Donation Acknowledgment Form should be kept with the Booster Club’s financial records. The form can be used as substantiation to the IRS that the Booster Club is using the funds raised in the manner approved by the IRS as a 501(c)(3) organization.