Question on payments to an organization counted as donations

Kellie DeMers

I've been in development for about 20 years and have never run into a situation that our business office just put in place so I am hoping someone can provide me with some guidance. Our organization runs a disabilities camp year round. We do fundraise specifically for the camp from corporation, foundation and individual donors. However, our business office has just informed us going forward that they are going to count camp services payments as donations. Now, I am not sure what they mean by ‘camp services’ so I am getting clarification on that, but we do receive third party payments for specific camper tuition (money is used to pay for the camper to come to camp.) I'm pretty sure any payments targeting specific individuals runs afoul with the IRS, but I can't remember how specific it is. Any help is greatly appreciated.

Karen Tuecke

Hi Kellie,

In response to your organization accepting payments for camp, I would refer to the IRS for guidance. The campers are receiving a service and that is something that Internal Revenue Code section 170(f)(8) prohibits, as someone is receiving a service in return, therefore it is not a gift.

What is Section 170 of the Internal Revenue Code?

Under IRC 170, if the donor receives something of value for a payment, all or part of the payment will not be a gift and a deduction in whole or in part will not be allowed. Further, if the payment is a gift, but is not made for charitable purposes, a deduction for the payment will be disallowed.

I would consider sharing this with you business department.