Google Answers Logo
View Question
Q: Personal Deductions Allowed for Contributions to a Non Profit Organization ( Answered 4 out of 5 stars,   0 Comments )
Subject: Personal Deductions Allowed for Contributions to a Non Profit Organization
Category: Business and Money > Small Businesses
Asked by: brianhlee-ga
List Price: $40.00
Posted: 13 Nov 2006 17:05 PST
Expires: 13 Dec 2006 17:05 PST
Question ID: 782511
For a non profit organization, people who contribute to the
organization are able to take that contribution as a deduction.
However, my question relates to the deductions allowed given that a
person purchased a product or service from the organization.

An example of what I am talking about is when I purchased show tickets
from a non profit organization. I paid $70 for the tickets even though
the face value of the tickets were $40. I was then able to legally
take a personal deduction of $30.

Given that these tickets had a very clear face value, it was easy to
figure out how much additional was tacked onto the price and how much
my deduction would be.

My question is basically for someone to illustrate this policy out to
me. Where does the corporation code mention this policy for California
based non profits?

More specifically, I am interested in the policies that allow
deductions to take place based off of a product sold as well as a
service performed.

A tangible example is if the organization hires a person to perform
personal finance consulting to an individual. The organization pays
this employee $30.00 an hour to do this job. However, the customer
pays $60.00 an hour for the service rendered. Of course the non profit
orgnanization takes an amount of the remaining $30.00 an hour to cover
overhead and other administrative expenses, but how much will the
customer be able to deduct?

I hope to tip another $20 for an answer that is clear and
understandeable in plain english.
Subject: Re: Personal Deductions Allowed for Contributions to a Non Profit Organization
Answered By: sublime1-ga on 13 Nov 2006 18:22 PST
Rated:4 out of 5 stars

The California Corporation Codes for a variety of non-profit
corporation types can be found on this page:

Donations are not mentioned in any of the major headings.
Browsing the codes under various headings that might seem
pertinent produces no results, nor does a Google search of
the entire site discover any mention of donations under the
relevant sections of the site:


For this reason, I was inclined to believe that the statutes
you seek are not regulated by, or found within, the California
Corporation Codes, but would be regulated only by the US tax
code. This turned out to be the case.

In searching on the IRS site, I discovered that the type of donation
you're referring to is called a 'quid pro quo contribution' and is
explained quite thoroughly on the following page from the IRS site:

"Charitable Contributions - Quid Pro Quo Contributions
 This is a payment a donor makes to a charity partly as a
 contribution and partly for goods or services. For example,
 if a donor gives a charity $100 and receives a concert ticket
 valued at $40, the donor has made a quid pro quo contribution.
 In this example, the charitable contribution part of the payment
 is $60. Even though the deductible part of the payment is not
 more than $75, a disclosure statement (below) must be filed
 because the donor's payment (quid pro quo contribution) is
 more than $75.  Failure to make the required disclosure may
 result in a penalty (below) to the organization.",,id=123201,00.html

As for the proper amount for the customer to deduct for a
service performed by the company, this is covered under the
topic of 'Good Faith Estimate of Fair Market Value':

"An organization may use any reasonable method to estimate
 the fair market value (FMV) of goods or services it provided
 to a donor, as long as it applies the method in good faith.
 The organization may estimate the FMV of goods or services
 that generally are not commercially available by using the
 FMV of similar or comparable goods or services.  Goods or
 services may be similar or comparable even if they do not
 have the unique qualities of the goods or services being

 Example 1. A charity provides a one-hour tennis lesson with
 a tennis professional for the first $500 payment it receives.
 The tennis professional provides one-hour lessons on a
 commercial basis for $100. A good faith estimate of the
 lesson's FMV is $100."
More examples on the page:,,id=123201,00.html

So if the FMV of the tennis lesson is $100, the donor
can claim the remaining $400 as a donation.

Other pertinent parameters are discussed on the page.

In the tangible example you cited, involving the donation
of financial consulting, since the payment which includes
the donation will amount to less than $75, a Disclosure
Statement is not required to be given to the donor. The 
donor, of course, is entitled to ask for the Fair Market
Value of the service being performed, and to claim the
difference as a deduction.

Everything the IRS has to say on the topic can be found
in the 31 unique results found on this Google search of
the IRS website:

"quid pro quo contribution"

I hope that's clear and understandable!


Additional information may be found from an exploration of
the links resulting from the Google searches outlined below.

Searches done, via Google:

california corporations code


fee donations

"quid pro quo contribution"
brianhlee-ga rated this answer:4 out of 5 stars and gave an additional tip of: $20.00

There are no comments at this time.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy