Essential Guide to Quid Pro Quo Reporting for Nonprofits

ARTICLE | July 24, 2024

Authored by Vasquez + Company

Understanding "quid pro quo" arrangements is crucial for nonprofits to ensure proper tax handling and compliance. The article "Quid Pro Quo: When Donors Receive Something in Return" explains IRS rules on quid pro quo contributions, including disclosure requirements, valuation of goods and services, and exceptions to the rule.

Key Points:

• Disclosure Requirements: Nonprofits must disclose the tax-deductible portion of contributions over $75 and provide written acknowledgment detailing the amount donated and the value of the goods or services received.
• Valuation Challenges: Properly value goods or services provided in return, including donated items and auctioned goods.
• Exceptions: Includes membership benefits, token exceptions, and intangible religious benefits where quid pro quo reporting may not be necessary.
• Penalties: Fines for failure to provide proper acknowledgment and the potential loss of donation deductions for donors.

Ensuring accurate reporting and valuation helps maintain compliance and avoid penalties.

For more information, read the full article here.

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