The decision to establish an endowment may be prompted by the acceptance of a particular gift, a desire to establish a perpetual fund in honor of the organization’s founder, or the need to ensure the organization’s financial sustainability. The principal of an endowment fund – the original gift or gifts that comprise such fund – …
Donor-advised funds (DAFs) are an increasingly popular way for individuals to manage charitable donations while providing an excellent potential funding source for charities. As nonprofit leaders and fundraisers look to diversify revenue, understanding how DAFs work, their benefits, and their challenges can empower organizations to build long-term donor relationships and financial stability. What is a …
Any organization that has received an IRS determination letter recognizing it as a 501(c)(3) organization may offer donors a tax deduction for their donations. However, for your donors to receive a tax deduction, your nonprofit must properly acknowledge charitable contributions it receives by following the requirements described below. What is a Donation Acknowledgment? As summarized …
It’s time to think about year-end charitable contributions. For 2021, there are a plethora of enticing incentives for donors looking for a tax deduction for their donations. 100% Deductibility 2021 is the last year that cash donations to public charities (other than donor advised funds) will be deductible in amounts up to 100% of the …
Charitable contributions are a main source of funding for most non-profits. In order for your donors to receive a tax deduction for making charitable contributions, they must be properly and appropriately acknowledged by the nonprofit. You may be surprised to learn that there are several important things your organization must do to ensure that donors …
Most new charitable organizations are looking to become tax-exempt under Internal Revenue Code section 501(c)(3). However, before making the decision to incorporate as a nonprofit corporation and apply for tax-exemption, it is important to know the pros and cons. Operating a nonprofit corporation with 501(c)(3) status comes with significant advantages, namely income tax-exemptions for the …
