Fundraising Policies: What Members Need to Know

Local Donations: Assume that donations to the branch that come without stipulations from the donor are given to support mission-based activities of the branch. If in doubt, verify the intent of the donor. Caveat: Such donations are only tax-deductible to the donor if the branch is designated by the IRS as a 501(c)(3) charity or if the gift is forwarded to AAUW National, which is a 501(c)(3) charity. Donor intent is the key.

AAUW Donations: If a donation is made to AAUW without any stipulations attached, assume it is intended to be used for AAUW’s crucial programmatic work. In this regard, the donation will be directed to AAUW Funds and used to support AAUW’s mission.

AAUW reviews each donation it receives to determine the intent of the donor. For example, gifts made by check are examined to see if the donor has made a notation that clarifies intent. If there is any reason to suspect the donor may have intended but not specified a particular use — for instance, if that person typically gives to support a particular kind of AAUW work — staff will call the individual to verify the intent. If a donor receives an acknowledgment letter that does not specify the donor’s intent, the donor should call AAUW for an adjustment.

Branches often work closely on programs and projects with college or university (C/U) partner institutions in their area. Many of the C/U member representatives participate in branch activities or are members of the branch. While there is no requirement for branches and C/Us to collaborate, it is nice to see that happen.

Many collaborative activities include mutual fundraising. A good example is when states or branches raise some of the funds needed to send students to the National Conference for College Women Student Leaders, and the C/U partner schools they attend raise the balance. Often, campuses provide space for AAUW programs, such as Start Smart, Legal Action Fund outreach programs, Campus Action Projects, and so on.

Of course, many branches collaborate with local colleges to offer scholarships and/or awards to students. We strongly recommended that such collaborations involve schools that are C/U partner members. If the schools have not yet joined, branches can leverage the collaboration as a means to recruit them as AAUW C/U partner members.

Yes, as long as the organization is not supporting an initiative contrary to the public policy of AAUW and is not using the announcement to solicit donations. AAUW members are active in their communities, and that requires being knowledgeable about all kinds of local and national issues. Maybe branch members will want to volunteer for the activity you feature. And perhaps these other organizations will return the favor and announce some of your branch activities in their newsletters so their constituents can learn about AAUW.

Notifying donors of how their donations will be used is a fundamental obligation that the IRS expects from the organizations it designates with nonprofit status to fulfill. It is also an ethical issue. If you are not forthright about how a donation will be used, you could undermine the trust of the donor or cause hard feelings from those who most want to support our work.

Likewise, gift acknowledgment must identify the use of the donation, whether for general support of the organization or for a specific program. This gives the donor an immediate opportunity to correct any misunderstanding of intent. According to Charity Navigator, the best known of the charity-rating organizations, high-quality charities subscribe to the standards of the Donor Bill of Rights. The fourth of these 10 rights states that donors have the right to be assured that their gifts will be used for the purposes for which they were given. AAUW adheres to each of the 10 rights in the Donor Bill of Rights.

Donor Intent. Donor intent is a fundamental principle of nonprofit status. At all times, we are obligated to determine and fulfill donor intent with respect to investment of the gift and to make every effort to ensure that the donation is used as intended. Donations to AAUW or to an AAUW-affiliated entity are presumed to be used for general or program support of the entity to which it is given — not to be given to another organization for its use of the funds. (This does not preclude the branch from having an arrangement with a college to provide scholarships to its students on behalf of and in the name of the branch.)

Donor Intent Unknown. If the donor’s intent is unknown, the receiving organization must take steps to determine the intent. Even if the donor has passed away, it is essential to try to fulfill the intent of the donor. If that is impossible, then the money must be used specifically for the mission-based work of that branch or state or by AAUW National. This situation sometimes arises when branches find themselves reduced in membership but with significant assets to manage. AAUW staff often works with members to help them establish a self-managing process for fulfilling donor intent while furthering the mission. (To discuss such assistance, e-mail connect@aauw.org.)

Acknowledging Use of the Gift. Donations should be acknowledged with specific reference to the use of the gift — such as for general AAUW support and therefore allocated to AAUW Funds or for a particular project like Tech Savvy. This is true of any donation, whether it is given to an entity that is a nonprofit 501(c)(4) or 501(c)(3) organization. The donor, therefore, is immediately able to tell if the donation is being used as intended — or if there is a misunderstanding that needs correction.

When a branch officer collects funds for donation to AAUW national, it is imperative that the donation is sent to AAUW immediately, along with the name of the donor and the intended use of the gift. This will ensure that the donor receives a timely acknowledgment verifying the gift for tax purposes.

The donation must be forwarded to AAUW national within the tax year in which the donation was made unless the donor specifically states that this does not matter to her or him. For example, if the donor wants the money to go to the Legal Advocacy Fund, this should be specified so that the gift is applied as intended by the donor and acknowledged by AAUW national appropriately.

No, branches are not automatically 501(c)(3) organizations through their affiliation with AAUW. They are subordinate organizations of AAUW, but each must get its own nonprofit status designation directly from the IRS. Any change in nonprofit status must come through an IRS application. Branch or state leaders are responsible for undertaking this approval process with the IRS.

All AAUW affiliates must submit requested documentation to the national office in order to be recognized as an entity officially affiliated with AAUW. For complete information, visit the page on AAUW affiliate agreements.

The IRS views AAUW as the 501(c)(3) charitable “parent” organization of a group of “subordinate” nonprofit 501(c)(3) and 501(c)(4) entities. The Affiliate Agreement is the basic contract between AAUW national and each nonprofit entity that is part of the AAUW nationwide organization. In the application for AAUW’s 2009 national organizational restructure, AAUW was required to submit for IRS approval two versions of the AAUW Affiliate Agreement, one for 501(c)(3) organizations and another for 501(c)(4) organizations.

The IRS requires that every nonprofit entity that is part of AAUW’s nationwide organization sign the appropriate AAUW Affiliate Agreement and send it to be permanently housed at AAUW headquarters for random IRS inspection. This is not optional; it is one of the ways that the IRS regulates nonprofit organizations.

The IRS regulates what is eligible for a tax deduction. For the donation to be deductible, the book must be donated to an organization that is qualified to receive deductible contributions. For example, if the book sale is raising funds for AAUW, which is a 501(c)(3) organization, the donation is eligible for a tax deduction. If the sale is to raise funds for 501(c)(4) branch, the donation is not eligible for a tax deduction. If proceeds will be split between AAUW and the branch, the branch must tell donors what percentage of their donation will go to each entity and the percentage eligible for a tax deduction.

The donor may only deduct the current fair market value of the book. The receipt does not need to show the value of the book; the donor will make that determination unless the entity has set a fixed price, such as for non-collectible books, in which case donors must be informed of the sale price placed on it by the organization. Likewise, donors must be informed if the organization sets prices categorically; for example, all paperbacks are priced at 50 cents. Receipts for non-cash donations valued at less than $250 should show:

• the name of the charitable organization.
• the date and location of the donation.
• a reasonably detailed description of the item(s). For example, you might write, “10 paperback books published in the 1990s.”
• IRS publication 526 is a handy reference guide. See page 7 for rules about contributions of property.

This is governed by IRS regulations. Neither dues nor donations to any 501(c)(4) are eligible for a tax deduction as a charitable donation.

If the charity meets all the IRS charitable donation acceptance requirements, you may deduct the donation in the same year you made it. It is not uncommon for a charity to award a scholarship in a different year than the one in which the scholarship funds were received. For example, since many people make charitable donations on December 31, it is extremely unlikely that a scholarship would be awarded that same day.

Gift Acknowledgment. Whether or not a donor will receive a tax deduction for a donation, it is good practice to acknowledge each donation in writing. This grateful stewardship will help the donor remember you kindly in the future. When a donation of $10 or more is forwarded to AAUW national, the donor receives an acknowledgment from the Washington, D.C., office.

Gift Documentation. Please be aware that donors cannot take tax deductions for gifts of $250 or more unless they have documentation from the charity that received the gift. Of course, you will probably want to acknowledge smaller gifts as well. For monetary donations, the IRS requires that the acknowledgment include the name of the charity, the amount of the donation, the date of the donation, and a statement that no goods or services were received in exchange for the gift.

If goods or services were received, the acknowledgment should state the fair market value of those goods or services and any other amount of the donation that is not tax deductible. It is always appropriate to advise donors to see their tax adviser for specific questions about their personal returns. See page 9 of IRS publication 1771 for examples of acknowledgment language.

It is important to send AAUW contributions collected locally promptly after they are received in order to respect and protect the tax deductibility of the donation. When a donation is held into another calendar year, the donor will receive a written gift acknowledgment showing AAUW’s receipt of the gift in a different tax year than the donor had intended. This can have adverse consequences for the donor’s tax filings, because the IRS permits a tax deduction only in the recorded calendar year of filing.

Even if the gift was given earlier, the fact that AAUW did not receive it until the following calendar year makes the donation deductible only in the year in which AAUW received it. This disparity both violates the intent of the donor and may cause the donor to lose the tax benefits planned for that deduction.

For these reasons, donations should be sent promptly to AAUW upon receipt or immediately after a fundraiser to ensure that the donor is recognized and thanked for the donation in the year it was made. This protects the donor’s right to claim the deduction in that year and prevents unintended tax consequences to the donor.

Fiscal Year. AAUW manages its business on fiscal year that begins on July 1 and ends on June 30, similar to many other corporations. We are currently in fiscal year 2013–14, abbreviated to FY2014. On July 1, 2014, we will begin fiscal year 2014–15, abbreviated to FY2015. AAUW business and deadlines, audited financial statements, budgets, 990 forms filed with the IRS, and so on are all based on the AAUW fiscal year.

Calendar Year. The tax deductibility of donations to AAUW is based on the calendar year because that is the requirement of the IRS. So a donation received in December 2013 can only be deducted on your personal federal income tax for 2013. A gift in January 2014 can only be deducted in 2014.

AAUW Donation Acknowledgment “Year.” The IRS considers gifts made in December 2013 and January 2014 to have been made in different calendar years. But since both of those donations were made in the same AAUW fiscal year, 2013–14, and people usually think of their charitable giving based on a calendar year, they are sometimes surprised to see their giving listed at a higher or lower amount than they expected in annual reports or elsewhere.

Giving Recognition. Fund pins that are given to individuals in recognition and thanks for their donation to AAUW of $100 or more are based on the calendar year. The Top 10 lists of the most generous branches and states are also based on the calendar year.