Each year, local communities around the country hold fundraisers in support of libraries. Other organizations raise money in support of both emerging and established writers. In this post, let's discuss a fundraiser that is both practical and imaginative: let's call it The Total Write-Off.
The Practical Side
A write-off is a deduction of the value of a good or service. When applied to income tax statements, a write-off equals the amount of the expenses required to produce the income minus the amount of taxable income.
Certain contributions to fundraisers qualify as income tax write-offs. The IRS rules: “If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive.”
In other words, when we buy candles, cookie dough, car air fresheners, or wrapping paper in support of a fundraiser for a recognized non-profit organization, we can deduct onlythe amount of the purchase that is over and above what we would have paid at a retail outlet.
Examples of Tax Write-Offs
If you donate $20 to a non-profit organization and receive nothing in return, then the entire contribution is tax deductible. On the other hand, were you to purchase popcorn or Smencils for $20, then you could not claim it, since you received something with a market value in return.
If a local business contributes some good or service worth $50 towards a fundraiser, the business can deduct the total amount of $50 fromits income tax. If that item is then auctioned off for $75, then the successful bidder can claim $25 as a tax write-off, since they received $50 value for the price of $75, with the intention of contributing the extra $25 towards the fundraiser.
The Total Write-Off
Two centuries ago, the English Romantic poets used to have competitions to see who could write the best poem within a certain time limit. Fifteen minutes to write an ode to the moon: Ready – set – go! In 1816, Percy and Mary Shelley, Lord Byron, and John Polidori decided to have a contest to see who could write the best horror story. Most would agree that Mary won that challenge with her novel Frankenstein.
Now, imagine a modern-day Write-Off. Everyone who wants to participate enters the competition. Local businesses contribute food, drinks, and prizes; all of which they can write off as donations to the fundraiser.In recognition of their contribution, they choose the subjects for the various Write-Offs that proceed all afternoon between small groups of participants.
Donation containers could be installed in front of each booth in recognition of the contestants who will each read their poems, short stories, and essays when their time is up. The supporters can claim all of those donations on their income tax. Who knows – maybe two centuries from now, scholars will recount how a literary classic was born in a fundraising drive in the local park…
At Fundraising.com, we’re full of nifty ideas that we're eager to share. Visit our website at Fundraising.com where you can download our fall fundraising guide (for free!)