Fundraising efforts must follow specific guidelines to stay in compliance with IRS regulations. Below is a comprehensive overview of the rules to consider when conducting fundraising activities for non-profit organizations:

1. Tax-Exempt Status

Before engaging in fundraising, ensure that your organization has been granted 501(c)(3) status by the IRS, which qualifies the organization as tax-exempt. This status allows donors to make tax-deductible contributions and exempts the organization from federal income taxes on revenues generated through fundraising.

2. Contributions and Acknowledgments

• Donor Acknowledgments: For donations of $250 or more, the organization must provide a written acknowledgment. The receipt should include:

  • The organization’s name.

  • Donation amount.

  • Statement of any goods or services provided in return for the contribution (and their estimated value), or a statement that no goods or services were provided in exchange.

• Quid Pro Quo Contributions: If a donor receives goods or services in exchange for their donation (e.g., gala tickets, auction items), and the donation exceeds $75, the organization must provide the donor with a disclosure statement that includes the value of the goods or services received. Only the portion of the contribution that exceeds the value of goods/services received can be deducted by the donor.