Special Fund / Silent Auction

[LL-EDENCOB]

We have started a restricted "fund" for one of our church members who had to have his leg amputated, and now can't afford a prothesis. Can we print a year-end contribution report without starting a new envelope number, for persons outside of the church who donate $ to this fund, if they give us their name and address?

Also, we will have a silent auction fundraiser in which we will take bids from donors on merchandise that has been donated by local businesses, etc. From the standpoint of the people who receive the merchandise and pay for it (donate to the fund), are those $ amounts tax deductible?

[NeilZ]

We have started a restricted "fund" for one of our church members who had to have his leg amputated, and now can't afford a prothesis. Can we print a year-end contribution report without starting a new envelope number, for persons outside of the church who donate $ to this fund, if they give us their name and address?

Also, we will have a silent auction fundraiser in which we will take bids from donors on merchandise that has been donated by local businesses, etc. From the standpoint of the people who receive the merchandise and pay for it (donate to the fund), are those $ amounts tax deductible?

On the first part, in order to track money in the Contribution Module, you must use an envelope number. The standard practice in many churches is to create a number outside the normal range of envelope numbers.

For example: Normal range is 100 to 999, Visitors (and other without membership in the church) have the range 2000 thru 2999. This separates envelopes who may get a quarterly report, from those that would only get a year-end report. In addition, IRS rules are that if the church solicits donations that go into a general fund, the amounts are tax deductible. If they go to support a specific person, they are not. I would check with a CPA on the exact rules in your case.

On the second part of your question, the rules here are the same as the rules that are in place for donations given to support a local PBS station that gives a 'premium' in return for a donation. That is the amount of the donation is offset by the value of the item you get in return. So if they donate $25 on an item valued at $10, their deductible donation is only $15 not $25. Again, I'd check with a tax expert in your area to get the exact rules.