The Challenges of Processing Gifts to

AthleticsBob Sylvain,

Director of Gift & Records SystemsBoston College

2007 JAA National Conference

Presentation Goals

What do our Students, Alumni, Parents, and Friends expect?

What is best for the University? What does the law require?

The Gift Receipt in General

First, secure the gift! A personal communication to our most engaged,

committed supporters. Among the most meaningful contacts they receive.

– A fundraising appeal– A stewardship document– A communication opportunity

Athletics Background

Over 7,000 Boston College student-athletes participate in a varsity or intramural sport.

Boston College offers 31 sports – the most in the ACC.

Boston College funds 260 athletic scholarships. 5,000 donors gave $7 million to The William Flynn

Fund (Athletics unrestricted) in fiscal year 2007.

The 80/20 rule

“If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution.

If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. In that case, subtract the price of the tickets from your payment. 80% of the remaining amount is a charitable contribution.” Source: IRS Publication 526 “Charitable Contributions” (Rev. December 2005), page 4

Our receipt says:

IRS guidelines state that if you make a payment to Boston College and, as a result, you receive the right to buy tickets to an athletic event at BC, you can deduct 80% of the payment as a charitable contribution.  You will receive further information at calendar year end summarizing any additional non-deductible benefits once the value of these are determined.

What is Donor-Based seating?

Donor-based seating is an allocation system that takes into account gifts to athletics when making seat assignments. It requires those in the most highly sought seats to maintain a minimum level of giving.

Commonly referred to as: Priority Seating, Priority Points, Personal Seat Licensing, Preferred Seating.

Rolling out Donor-Based seating

Communication strategy for season ticket holders is critical.– Letter from the Athletic Director

– Donor-based seating brochure

– BC Athletics web site

– This was a UNIVERSITY decision, examined and supported at the Presidential level.

BC started with Men’s Basketball in 2006. Season ticket holders are passionate.

From The Boston Herald (part 1):

Boston College’s latest fund-raising technique - hitting up those football fans with the best seats with a mandatory, $1,000 seat “donation” - has triggered a growing furor. State Sen. Michael Morrissey (D-Quincy), who oversees a panel on ticket sale regulations, yesterday threatened legislative action and is calling upon the state Attorney General’s Office to launch a review. Meanwhile, James Athanus, a retired Boston lawyer and BC alum, said he may file a complaint against BC based on the state’s consumer protection statutes. For starters, Athanus said he plans to send the school a letter demanding that it “cease and desist” with its seat donations, which he likened to “extortion.” Failing that, Athanus said he might consider more drastic legal action. Athanus, who earned his doctorate at BC in 1982, says he can’t afford to shell out $2,000 a season for his two seats, in addition to the cost of tickets.

From The Boston Herald (part 2)

The Herald earlier this month reported that BC officials unveiled plans to require a $1,000 seat “donation” from season ticket holders with rights to some of the best seats at Alumni Stadium. The new charge covers 6,000 seats, or 16 percent of the stands. “This is a straight, stick-up scheme,” Athanus fumed. Morrissey questioned why the college doesn’t simply roll all the charges into a single ticket price - though he noted that could make it one of Boston’s most expensive sports He said he may call upon BC officials to testify at an upcoming hearing on sports ticket sale issues. A BC spokesman declined to comment. In previous interviews, BC officials, including Athletic Director Gene DeFilippo, say the “donations” are needed to pay for ever-more expensive athletic scholarships and a constantly growing athletic program. Fans who decline to pay the fee will be guaranteed seats in other parts of the stadium.

Wednesday, January 31, 2007

Special Cases

IRA Distributions

Implications for IRA DistributionsImplications for IRA Distributions

No benefits whatsoever may be given in exchange for an IRA roll over. The receipt you issue must state explicitly that there were no associated benefits.

Special Cases

IRA Distributions Booster Clubs

Implications for Booster ClubsImplications for Booster Clubs

Is the Booster Club a separately incorporated organization with its own tax ID? If so, gifts made to the Club should be receipted by the Club.

– Agency accounts

– CASE says gifts to institution-affiliated foundations, alumni associations, athletic associations, and the like should be reported with and in the same manner as gifts to the institutions themselves.

Special Cases

IRA Distributions Booster Clubs Donor Advised Funds

Implications for Donor Advised Implications for Donor Advised FundsFunds

Many donor advised funds will not allow their gifts to confer an impermissible benefit on a donor. Fidelity, for example, explicitly states that they “will take remedial action upon any discovery that improper grants have been made”.

To conform with this requirement, Boston College we will accept donor advised fund gifts to an athletic designation only when the donor declines any benefits in writing, or an authorized representative of the BC Athletics office confirms they will receive no benefit as a result of the donor advised gift.

Special Cases

IRA Distributions Booster Clubs Donor Advised Funds Matching Gifts

Implications for Matching GiftsImplications for Matching Gifts

For example, if a donor gives $2,500 to Athletics and submits a matching gift form for us to verify, and we confirm the donor has basketball parking only, we would:

subtract the value of parking:  $2,500 - $200 = $2,300

apply the 80/20 rule to the remainder: $2,300 x .8 = $1,840

We would thus confirm to the matching gift company a charitable gift of $1,840.  Assuming the company does a 1:1 match, and will match gifts to athletics, we would expect a matching gift from the company of $1,840.

Athletic Benefits – Donor Benefit Athletic Benefits – Donor Benefit Calculation Spreadsheet with DetailCalculation Spreadsheet with Detail

Directions: You fill in the blue, Excel calculates the yellowMill ID / Name :  

Donation Amount:  

Football Parking Ded. ('X' if yes)   =IF(NOT(ISBLANK(B9)),175,0)

Basketball Parking Ded. ('X' if yes)   =IF(NOT(ISBLANK(B10)),200,0)

Donor-Based Seating Ded. - 80/20 rule ('X' if yes)  =IF(NOT(ISBLANK(B11)),((B7-C9-

C10)*0.2,0)

Tax-Deductible Gift Amount: =IF((E7-F9-F10-F11)>=0,E7-F9-F10-

F11,”NO TAX DED AMOUNT”)

To clear all data, press Ctl + L

Special Cases

IRA Distributions Booster Clubs Donor Advised Funds Matching Gifts Raffles

Implications for RafflesImplications for Raffles

CAREFUL!

– Unless anyone can enter the raffle at no cost, there is no charitable gift.

– Beware individual state gaming laws.– You may have to issue a 1099.

IRS Resources

Publication 561 - Determining the Value of Donated Property

Publication 1771 - Charitable Contributions: Substantiation and Disclosure Requirements

Publication 4221 Compliance Guide for 501(c)3 Tax-Exempt Organizations

Revenue Ruling 86-83

Thank You!