You may have heard about the recent report released by the Treasury Inspector General for Tax Administration which found that the Internal Revenue Service and charities were not doing enough to ensure that donors of motor vehicles avoid taking unsubstantiated tax deductions. The report found that in 2007, over 92,000 taxpayers took unsubstantiated motor vehicle donations totaling $204 million—which may have resulted in tax avoidance by taxpayers to the tune of $17 million in taxes in 2007.
The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector® states that nonprofits should follow the law at all levels and should also have a policy in place to govern the acceptance and disposition of charitable gifts that are received in the course of its fundraising activities.
For some organizations, this report may encourage them to consider refusing gifts of automobiles, boats, or airplanes if they are not in a position to appropriately handle the requirements and paperwork. For others, it may mean taking a much more serious look at what is required when the organization accepts a car, boat, or airplane as a charitable contribution from some well-meaning donor. At any rate, nonprofits should do their best to ensure that they are following the law—which includes making sure that their receipts and acknowledgements for gifts are properly handled.
Did you know? The Standards for Excellence® program’s educational resource packet, “Acceptance of Gifts” includes a sample acceptance of gifts policy. The packet is free and available to Standards for Excellence Institute® members. It is available through the members only section of our website. Hard copies are also available upon request. Not a member? Join now!