Smith on the face of the check, but would accept those accompanied by a
separate note *asking* that the funds be used to help Mr. Smith. I was
church treasurer for 20 years, and it's a very close call sometimes.
Chuck
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of
Debbie Breedlove
Sent: Wednesday, September 17, 2008 11:30 AM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Restricted donations
The charitable organization is correct. A donation that is given with
specific instructions, that it is to be given to an individual, is not
deductible. Donations to individuals are not deductible, and funneling it
through a charitable organization doesn't change anything. The key point is
that the donor specified that it be used for one particular girl. Sometimes
a church will take up a special collection, saying "We want to help Mr.
Smith because he lost his job. Please make a special donation to help with
this." Those donations are deductible because the church still has the
right to spend the funds as they see fit. It so happens that they see
fit to use the donations to help Mr. Smith. Donors may protest if the
church decides not to give Mr. Smith all that they collect, but they still
have the discretionary power to do that. That is not the same as when a
donor gives money with strings attached, saying it must be used for a
certain person. It's not an unconditional donation. They are really giving
a gift to an individual, and the church is just serving as a "middle-man".
Remember when the Red Cross solicited donations for 9/11 victims, then used
some of the money to refurbish their own offices and buy new computers.
People got really mad, but I'm sure that somewhere, there is some fine print
that says they have the right to spend the money however they want.
From: Donna L Loeffler CPA
Sent: Wednesday, September 17, 2008 8:25 AM
To: taxchat@yahoogroups.com
Subject: [taxchat] Restricted donations
If someone donates to a 501(c)(3) charitable organization and specifies
that the donation is to be used for an individual, would that be a tax
deductible charitable contribution for the donor? A taxpayer donated $
to a choir to be used to offset expenses for one of the girls in the
choir and specified that it be used for that one girl. The choir wrote
a receipt that said it was not tax-deductible.
--
Donna
Donna L. Loeffler, CPA
936 Church Avenue
St. Charles, MN 55972
(507) 251-8119
dllcpa@hbci.com
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