Non profit- fundraising - benefit to attendees

[ILLMAS]

If a church or an organization hosts a fundraiser event and sells tickets for $400.  The cost of the meal has an approximate value of $150 and the remaining $250 is the donation.  In the same event, they hired a motivational speaker and a genius employee or board member suggested that $100 should be allocated to the cost because they feel the attendees received a benefit, another employee suggested they should include $50 more to the cost because the DJ provided entertainment and people were dancing.  Another employee not wanting to be left out, suggested they should add another $25 because the attendees received pictures from the photobooth  that are shareable their on social media etc…. and can be used for personal marketing.

Fast forward to the end of the year, attendees will be receiving their donation letter with the following:

Cost benefit: $425

Deductible donation: $75

 

Does anyone know of an IRS publication that specific to what the IRS considered to be a benefit to the attendees?  From the research so far, I only see mentions of meals and the rest.

Thanks

[jklcpa]

 

https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions-quid-pro-quo-contributions

 

https://www.nolo.com/legal-update/irs-changes-thank-you-gift-rules-35445.html

[Patrick Michael]

You would have to determine what the motivational speaker usually charges the general public to attend one of his presentations.  If the speaker does not normally charge for his presentations, then no value would have to be included.  I believe the DJ and photo booth have a insubstantial value, and do not have to be included.  The attendee's didn't receive any tangible benefit, good, or service and would probably would have attended even if the DJ and and photo booth were not included.    I would make sure I documented the information that was used to make the "good faith estimate" of the FMV of the goods or services received.  

[ILLMAS]

Thank you everyone.

[Abby Normal]

This is why I almost never support fundraising events. I'd rather just donate cash.

[Sara EA]

What kind of meal has a value of $150?  I could see it with the political fundraisers that charge $1k+ per person, but $400 seems excessive unless there was an open bar and aged steaks.

[ILLMAS]

It was just a hypothetical example only.

[DANRVAN]

 

On 9/27/2023 at 6:31 PM, ILLMAS said:

Fast forward to the end of the year, attendees will be receiving their donation letter with the following:

I believe the nondeductible amounts should be disclosed before hand.

On 9/27/2023 at 6:31 PM, ILLMAS said:

board member suggested that $100

The amounts should be based on fmv using any reasonable method per reg 1.6115-1.

It is the entity's responsibility for making the estimates, but I would ask about the reasonableness.  For example, what would the speaker normally charge per person and did the attendee's really receive a benefit?  Same with music and dancing.