Stipend payment for participation

@Jenny Marquardt My understanding is that the donor has to receive the gift first as income before it can be a deductible donation. It would be easier and cleaner if they just deposited the stipend and made a donation for the same amount.

@Jenny Marquardt, seconding @Dariel Dixon's comment. The check must be made out to the nonprofit, not the individual, in order for it to be tax deductible.

It's a battle I've had to fight frequently, as the individual who received the money can become upset when they find that their friends don't get a tax deduction. We have frequently run into this with memorial gifts (someone makes a gift out to the deceased's spouse and then the spouse passes it along to us, expecting us to acknowledge the gifts). We've also run into it frequently with gifts to our monks, for masses, weddings, etc. As far as the IRS is concerned, the gift goes to whomever's name is on the recipient line, and the recipient then becomes the donor when they forward the money to your organization.

We still issue a nice thank-you letter, minus the tax language. I even had a printed insert I once used, saying, “If you would like future gifts to be tax-deductible, please make them out to [our organization name] in honor of [individual name].” It was the nicest way I could think to nudge people to change their giving habits. Must have worked … we haven't needed to include one in a while.

@Jenny Marquardt Yes, it's a donation. The question seems to be who is the donor. My over simplification: the party controlling the $.
If stipend is a check made out to coworker, coworker is donor, either by endorsing check to you or depositing/cashing it and making separate transaction.