Donation receipts for fundraising events and auctions
When a donor gets a dinner, a ticket or an auction item in return, only part of what they paid is a gift. Here is how to work out that part, and three free templates that say it the way the IRS requires.
A whole event's worth of receipts? Put each payment on a row with what the donor received and its value. Upload the spreadsheet and every letter shows the amount paid, the value received and the deductible amount, with the IRS disclosure. The first three letters are free.
The rule: only the amount above the value is a gift
When someone pays you and gets something back, the deductible amount is what they paid minus the fair market value of what they received. A $150 ticket to a dinner worth $65 is an $85 gift.
If the payment is more than $75, you are required to tell the donor this in writing, with your good-faith estimate of the value. The IRS can charge $10 per contribution, up to $5,000 per event, when an organization does not. The statement can go on the ticket, the invitation or the receipt, as long as the donor gets it in writing.
How to estimate the value
- Dinners and galas: what a comparable meal and evening would cost at a restaurant or venue, not what you paid the caterer. A donated meal still has a value to the guest.
- Auction items: the normal retail price. Publish the value of each item in the catalog or on the bid sheet before bidding starts.
- Golf outings: green fees, cart, meals and any gifts the player receives.
A reasonable estimate made in good faith is what the IRS asks for. Write down how you arrived at it and keep the note with your event records.
1. Ticket to a dinner, gala or other event
[Date] [Donor name] [Street address] [City, State ZIP] Dear [Donor name], Thank you for supporting [Organization name] at the [Event name]. This letter is the written acknowledgment of your contribution for your tax records. Date received: [Date of payment] Amount paid: $[Amount paid] Goods or services provided: [For example "Two dinner tickets to the Spring Gala"] Estimated value: $[Value] Total cash contribution: $[Amount paid] Less estimated value of goods or services provided: $[Value] Deductible amount of cash contribution: $[Amount paid minus value] In exchange for your contribution, [Organization name] provided the goods or services described above. Our good-faith estimate of their total value is $[Value]. For federal income tax purposes, the deductible amount of a contribution is limited to the amount by which it exceeds the value of the goods or services received in return, which for your contribution is $[Amount paid minus value]. [Organization name] is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Contributions are tax-deductible to the extent allowed by law. Our federal tax identification number (EIN) is [EIN]. Please keep this letter with your tax records. With gratitude, [Signer name] [Title]
2. Winning bid at a charity auction
A bidder can deduct only what they paid above the item's fair market value. Someone who paid $400 for a weekend stay worth $600 has no deduction, and their receipt should show a deductible amount of zero.
[Date] [Donor name] [Street address] [City, State ZIP] Dear [Donor name], Thank you for your winning bid at the [Event name] in support of [Organization name]. This letter is the written acknowledgment of your payment for your tax records. Date received: [Date of payment] Amount paid: $[Winning bid] Item received: [Description of the item] Estimated fair market value of the item: $[Value] Total cash contribution: $[Winning bid] Less estimated value of goods or services provided: $[Value] Deductible amount of cash contribution: $[Winning bid minus value, or 0.00 if the bid was not above the value] In exchange for your payment, [Organization name] provided the item described above. Our good-faith estimate of its value is $[Value]. For federal income tax purposes, the deductible amount of a contribution is limited to the amount by which it exceeds the value of the goods or services received in return. [Organization name] is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Contributions are tax-deductible to the extent allowed by law. Our federal tax identification number (EIN) is [EIN]. Please keep this letter with your tax records. With gratitude, [Signer name] [Title]
3. Event sponsorship
For a business or individual sponsor. List anything of real value they received, such as a table or tickets. Simply displaying a sponsor's name or logo is recognition, not a benefit that needs a value.
[Date] [Donor name] [Street address] [City, State ZIP] Dear [Donor name], Thank you for sponsoring the [Event name] in support of [Organization name]. This letter is the written acknowledgment of your payment for your records. Date received: [Date of payment] Amount paid: $[Amount paid] Goods or services provided: [For example "One table of eight at the dinner"] Estimated value: $[Value] Total cash contribution: $[Amount paid] Less estimated value of goods or services provided: $[Value] Deductible amount of cash contribution: $[Amount paid minus value] In exchange for your payment, [Organization name] provided the goods or services described above. Our good-faith estimate of their total value is $[Value]. We also recognized your sponsorship by displaying your name and logo at the event. For federal income tax purposes, the deductible amount of a contribution is limited to the amount by which it exceeds the value of the goods or services received in return. Please consult your tax adviser on whether to treat this payment as a charitable contribution or a business expense. [Organization name] is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Contributions are tax-deductible to the extent allowed by law. Our federal tax identification number (EIN) is [EIN]. Please keep this letter with your tax records. With gratitude, [Signer name] [Title]
Special cases
Raffle tickets
The price of a raffle ticket is not a charitable contribution. Do not include raffle purchases on a donation receipt.
A donor who buys a ticket but does not come
Buying a ticket and staying home does not make the full price deductible, because the donor still had the right to attend. If a donor tells you when they pay that they are declining the ticket, for example by ticking a box on the reply card, you can treat the full payment as a gift. Keep a record that they declined.
Donated auction items
The person who gave you the item gets an in-kind receipt that describes it without a value. See the in-kind donation receipt template.
Token gifts and favors
Low-cost items such as a logo mug or a program book can usually be ignored. The IRS sets the limits and changes them each year, so check the current figures before relying on this for anything substantial.
A straight donation made at the event
A paddle raise or a "fund a need" gift, where the donor gets nothing back, is fully deductible. Use the plain wording in the donation receipt letter template.
Common mistakes
- Receipting the full ticket price.
- Leaving auction item values off the bid sheets, so bidders cannot show they knowingly paid more than the item was worth.
- Including raffle tickets on a receipt.
- Using your catering cost as the value of the meal.
After the event
Export your ticket sales and auction results with one row per payment: name, date, amount paid, what they received and its value. Upload the file here and download a finished letter for each person, with the subtraction done and the disclosure included. A donor who also gave during the year gets one letter covering everything. The first three letters are free.