Tax Deduction Info

Tax Deduction Info

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These are general guidelines that are for informational purposes, for NPOs, churches, causes, and individuals to know about, regarding raising money via affiliate programs and their taxes.  We always recommend that you consult a qualified professional in your jurisdiction as we are not able to give specific tax advice.

Are there any limits to tax-deductibility?

The IRS has specific rules about tax-deductibility and charitable giving. We always recommend that you consult a qualified professional in your jurisdiction as we are not able to give specific tax advice.

However, here are some guidelines to consider:

–  You can choose to give money to as many causes as you wish during the year.
–  You cannot give more than $250 to any single cause in a given month, to make sure that you stay within the IRS limits on gifts without a receipt directly from the cause.
–  A cause must be eligible for tax-deductible donations in order for you deduct the amount given

Are you qualified to give tax advice?

We are not tax attorney’s, accountants, or anyone officially qualified to give tax advice – that’s why we always suggest you contact a local financial adviser.

Do all of my purchases count for deductions?

Let’s start with a reminder, we are not tax professionals and we suggest you consult a qualified local adviser to ensure that your purchases meet the requirements for a tax deduction.

A few guidelines:

  • The cause to which you donate must qualify under Section 170 of the IRS code as a nonprofit organization. Good news, many small causes do NOT have to be 501(c)3 registered. Your donation to your small cause may qualify for a tax deduction, even if it isn’t registered.
  • You may not take a deduction until the cause receives their commission payment.
  • The tax year reflects the year funds were sent to your cause
    (which may not be the same as the year you made your purchase).
  • You must have provided your mailing address, prior to making a purchase.
    • Beginning in 2007, the IRS has changed the documentation rules for charitable deductions. You may need a receipt from your cause in order to satisfy IRS requirements. We provide your donation information to your cause so that they may issue a receipt.

Do you need my name and address for my donations to be tax-deductible?

Yes. According to the IRS regulations, for a donation to be credited to you, we need your name and address on file. We will not reveal your information to third parties without your prior permission.

How do I get a tax deduction from shopping?

When you make a purchase for a cause, the vendor sends the cause back a portion of your purchase amount, the “affiliate commission.” If you’re donating to an organization that qualifies under section 170 of the IRS code as a nonprofit, your donation may be considered tax-deductible. If your cause is small, it is possible that it doesn’t need to be a “501(c)3”. To ensure that your donations through purchases are tax-deductible, the IRS has defined a set of requirements, which you can learn from the IRS.gov web site.

The donation would occur when the cause receives the commission, not when you make the purchase.

 

How do I report this to the IRS, and how do I find out all of this for myself?

We recommend that you consult with a qualified tax adviser in your state to confirm that your purchases are eligible as a tax-deductible contribution. You can bring them a copy of your “Shopping Activity Report” as an itemized list of your purchases and the cause(s) they benefited.

The IRS currently doesn’t require anything more than a listing for a donation under $250 to any one cause.

 

What causes are eligible for tax-deductible donations?

We recommend that you consult a local financial adviser, as each jurisdiction varies in their rules and laws.

If you’re donating to an organization that qualifies under section 170 of the IRS code as a nonprofit, your donation may be considered tax-deductible. If your cause is small, it is possible that it doesn’t need to be a “501(c)3”. To ensure that your donations through purchases are tax-deductible, the IRS has defined a set of rules on IRS.gov

Ultimately it is your responsibility to know for sure if the cause you choose to support qualifies, or not, for a tax deduction.

For more information, see IRS Private Letter Ruling 9623035. Remember, ultimately your personal tax situation affects your ability to take any tax deductions, so you should consult your tax adviser.

What doesn’t count for a deduction?

To be tax-deductible, the IRS wants to make sure that:

  • You’re giving away your money and that your donation is voluntary.
  • Your donation is going to a cause of your choice.
  • Your money is being donated to an entity that qualifies under section 170 of the IRS code.
  • You get a written receipt from the cause for donations over $250 and have an itemization of donations less than $250.
  • No deduction is taken prior to the money actually being disbursed by your agent.
  • Only donations through purchases count towards tax deductions.

Unfortunately not all funds raised are eligible for tax deductions.

  • any bonuses you may earn through a vendor do not count for deductions
  • funds donated to causes that are not eligible under the tax regulations.

We recommend that you consult a local financial adviser, as each jurisdiction varies in their rules and laws.

Why do you provide this service?

We believe that enabling tax deductions helps to encourage some individuals to use our service.

For more information, see IRS Private Letter Ruling 9623035. Remember, ultimately your personal tax situation affects your ability to take any tax deductions, so you should consult your tax advisor.

The Affiliate Program

The Affiliate Program

In previous posts, I wrote about whether your fundraising is friendly to mobile devices, and mobile internet statistics.

Then, I wrote about Fundraising Mobile Apps: Still Having Problems? This included how, for a time, Apple wasn’t allowing charities to receive donations using apps through their web store. This also included the problems and costs of developing apps. Natives, which are designed to run on one OS, and hybrids, which can run on multiple, and how the costs can be several or tens of thousands of dollars.

From there, I went on to discuss Challenges for Fundraisers: Fundraising Operation Costs, Investing in New Technology, Use of Donor Data, Keeping Engaged with Donors, Sagging Public Trust, and how Nonprofits can succeed.

Finally, I wrote about The Drain of Fundraising. This include 5 parts, outlined, from WikiHow, how your members and community may grown at “not another fundraiser,” or how people simply can’t, because they don’t have any spare funds. Now, I present solutions.

One of the best options is The Affiliate Program. You may be rolling your eyes, thinking of all the spammers that try to get you to buy something you may or may not want, invites to dating sites, or even to get you to spend money on an adult site. All of these happen, but aren’t shouldn’t discourage you from looking into setting up an affiliate program for your organization.

One of the most well known is Amazon Associate program. You can sign up for an account for your organization. You provide Amazon with your tax information. Then, you can link to specific products, or just to the site or search, yourself. When someone makes a purchase, your organization gets a commission. Set up a section on your site, and create the links from there. You can do the same thing on your Mobile App. If you don’t have either, we can help.

Another option is to join up on Ebay’s Partner Network. While there are many other auction sites out there, Ebay continues to be the most well known, around the globe. Having members of your group, as well as the community, to shop through your affiliate link to do their regular Ebay shopping, with commission rates that range from 40% to 80%.

Shopify Affiliate Program is also an option, for people looking to start their own online store.

Clickbank is one of the largest and longest affiliate market programs around. It makes it fairly easy for both sellers and affiliate marketers to make money. ClickBank is a privately held Internet retailer of both physical and digital products. ClickBank was founded in 1998.

CJ Affiliate (formerly Commission Junction): Another large company and one that has been around for years. Likewise, it was founded in 1998.

ShareASale.com has over 2,500 merchants to choose from, real-time stats, and on-time payments. Founded 2000.

You can find affiliate programs for just about anything, and for many companies. Decide what companies you want to have for your affiliate programs. Then, put the links on your site, and create that section in your App. If you don’t know how to do these, talk with your site and app developer. If you don’t have a site or app developer, we can help.

The Drain of Fundraising

The Drain of Fundraising

The process of fundraising can be very exhausting for your fundraising team. Here are the steps, as outlined on WikiHow. Feel free to click the link, to see the details.

Part 1: Planning Your Event.

Set objectives.
Identify your audience.
Decide on a fundraiser type.
Identify a deadline.
Study other successful fundraisers of a similar type.

Part 2: Building a Team.

Seek out volunteers.
Delegate authority.
Split up tasks.
Think about other professionals you will need to have on site.

Part 3: Figuring Out Your Finances.

Define your fundraising goal.
Think about cost.
Solicit sponsors.
Figure out how you will accept money.

Part 4: Planning Logistics

Pick a time and date for the event.
Find a good location.
Create schedules.
Plan for following through.

Part 5: Getting the Word Out

Make use of the internet.
Advertise.
Get help from local businesses and organizations.
Enlist the help of your team.

That is 21 steps to a fundraiser! Other sites may use less steps, or may focus on the parts as steps, without breaking down the individual steps. But no matter how you splice it, fundraisers can be a drain on your organization and members.

Many times, there comes the groans of people (internally, if nothing else) about having to do “another fundraiser.” Fundraisers take time. While there are some high energy people that help run some fundraisers, not all fundraisers have these, and even if they do, they may not make up the majority of the team. Many organizations can’t afford to hire a professional fundraising company, and if they’re small or just starting out, they may no be willing or able to pay a part of their raised funds to pay for the professionals. And if your fundraiser falls short of its goals, this can discourage the members, and make it harder to find people willing to commit time to future fundraisers.

I recall my first school candy fundraiser. Everyone in all my neighborhoods bought from their kids, nieces/nephews, grandkids…and I lost interest. There were all these prizes for if we got x-number of sales. I put in a lot of effort, and for a 1st grader to find all their effort yields nothing, and the rewards promised were denied, despite my best efforts, really turned me off for wanting to have much to do with fundraisers on a whole, more than 20 years later. Others dislike, year after year, of having overpriced goods hounded on them by neighbors, for things they simply don’t need, and often, don’t even want. Even events like walkathons can turn off people, with all the hustle and bustle. They have to readily make plans, and shape their near future plans to revolve around the event. There can be countless things, weather being just one of them, that can go wrong, and when it does, you can loose interest in people attending. Depending on what happened, people may decide not to go to future fundraisers, even though what happened may not have been something that you could have controlled.

“I need to save money for myself and for my family.” How many people are living paycheck to paycheck? Student loans? Rent/mortgage? Automobile expenses? Clothes? Food? Even having some personal expenses, like TV, internet, toys (for kids or adults)? With all of that, “I’m being pelted everywhere to ‘give, give, give!’ and I just don’t have the funds,” or “I’m sorry for those people, but I’m trying to live and enjoy life.

With all of these issues, both on the fundraising team’s side, and on the individuals making donations (or not making donations), what options are there? That will be covered in the next post.

Challenges for Fundraisers

Challenges for Fundraisers


There are several challenges fundraisers face. This post outlines some of them. Look to future posts for solutions.

Fundraising Operation Costs:

Some sponsorships are paying attention to npos’ ability to run operations, not just dollars that go to programs from fundraising efforts, but also of back-office efficiencies and operations costs to make every dollar go farther. Expectations can be huge when it comes to operational activity.

Investing in New Technology:

It’s said that sometimes you have to spend money to make money. Nonprofits often deal with limited budgets for new donation processing technology. One challenge that keeps some fundraising operations team up at night is budget restraints that they face. How much money can be invested in having the operation up to speed with new technology?

Use of Donor Data:

Today’s the era of Big Data. For many organizations, this is a good thing. Nonprofits, in particular, have many ways to collect donor data and can learn about the interests, preferences and values of the people who fund them. But how integrate this data in a way that makes sense.

Keeping Engaged with Donors:

All nonprofits are operating in competition in a crowded media landscape where lots of different causes, companies, and brands are vying for attention, time, funds, and energy. The challenges of the fundamental need to keep donors engaged in creative new ways presents many sleepless nights for fundraisers.

 

Sagging Public Trust:

1:3 people express distrust in charities and 4:10 believe nonprofits do not spend their money wisely. With the Clinton Foundation and the Trump Foundation being seen in negative lights in the 2016 election season, earning public confidence will be an on-going challenge for other charities.

Nonprofits can succeed by:

Building credibility with donors, being as transparent as possible, show a strong ROI and cost efficiencies, and find new ways to engage with donors. There is always challenges with this, but in focusing your efforts to improve your fundraising operations, and overcoming these hurdles will become easier.

Fundraising Mobile Apps: Still Having Problems?

Fundraising Mobile Apps: Still Having Problems?

For a long time, from as far back as 2010, Apple wasn’t allowing for donations on its iOS platform. Even Google has limits. Recently, Apple has allowed changes. Google does, but check through Google for non-profits. Also, be aware that both iTunes and Google Play charges 15% for any money you make through your App. It is advised that your contact them directly, as information online is constantly changing, and in this case, going directly to the source would be your best option.

The Salvation Army Headquarters for Bermuda and Canada deployed an app, called iKettle. It lets them create and share “kettle” web pages and invite others to donate to support The Salvation Army’s work. It’s friend-to-friend fundraising. iKettle includes a “Donate Now” button, but when users click it, a new browser window opens outside of the app, so that they’re not restricted by possible issues from Apple or Google.

Traditionally, one would need a native app that would run on Apple or Google. At a time, there would also be one for Windows and Blackberry, but combined, they make up less than 2% of the mobile market, today. The problem is that to create a native app, which runs on one mobile device or another, is that it would cost $30,000 per system! To get around this problem, hybrid apps came to be. Ymedia Labs has infographics to show the advantages of each, and how they’re different. It should be noted that while a native can function “offline,” hybrids can, as well. When it comes to certain features, such as sending a donation, the app will need to connect, to conduct the transaction. Also, through growing developments, plug-ins, and a multitude of options, security can be enhanced on natives and hybrids.

As mentioned above, Apple and Google charge 15% for money made through your apps (at this writing, I was unable to find out if Apple and Google offer discounts for charities). For non-profits, PayPal charges less, 2.2% + $0.30. Square’s 2.75 percent is also lower, although for regular transactions, PayPal can be higher than square. Do note that fees for swiping a card, manually entering it, and even having a reader varies by company, so read all of the details. Remember to ask!

Romney aides said the campaign used Square for “community engagement,” rather than fundraising. The small contributions it facilitated could make it more cost-effective than either direct mail or phone solicitations.

There are options, and exploring these, to help your organization with fundraising, should be consider!

Are your fund raising pages friendly to mobile devices?

Are your fund raising pages friendly to mobile devices?

With more and more people using mobile devices (smart phones, tablets, etc.), is your donation opportunities taking advantage of the mobile niche? If not, here are some statistics for you to consider:

  • There are more mobile Internet users than desktop Internet users. There are 3.5 billion global mobile Internet users as at August 2017.
  • Mobile devices influenced sales to the tune of over $1.4 trillion in 2016.
  • Mobile commerce revenue was $170 billion in 2016, and it is estimated to be $694 billion by 2019.
  • The average order value for online orders placed on Smartphones is $115.52 while the average order value for orders places on Tablets is $106.98.
  • 90 percent of the time spent on mobile devices is spent in apps.
  • Mobile traffic is responsible for 52.21 percent of internet traffic — compared to 42.16 percent from the previous year.
  • Engagement is up to four times better on mobile apps than on mobile web.
  • About 400 million mobile users use ad blockers to avoid seeing ads on their mobile devices.

This article has more data on internet, including mobile stats, as of August 2017.

With this information, it would be imperative for you to reach these users in your fund-raising efforts. Here are some tips.

  1. Is your donation page optimized for mobiles? Many sites may look ok on a mobile device, but may not be optimized. If your site is built on a platform like Word Press, then this shouldn’t be a problem. Otherwise, you may want to check your page analytics, such as via Google Analytics or similar tools. If you see a huge abandon rate on your donation page by mobile users, then you’re not optimized for mobiles. Make the redirect mobile users to that page with a simple JavaScript redirect. Your web developer should be able to do this.
  2. Fundraising through textingText To Give campaigns can raise donations in a short time. Often they are donations that are one-time and are simply added to users cellphone bills. A better idea: Use mobile fundraising services to handle the payments and offer people monthly giving amounts.
  3. Give supporters the option to receive text-based updates. Statistics show an 85% retention rate for donors who receive regular monthly text updates. They also likely make additional year-end donations.
  4. Mobile-optimized website – At least your online forms – volunteer signup, donations, email or newsletter – need to be optimized for mobile devices, or you will loose a lot of people. If your site isn’t mobile optimized, hire a website design company to update your existing website to automatically resize it to be device specific. Again, if you designed your web site on a platform like Word Press, then this process has already been done.
  5. Your own mobile app – Get new content into the hands (litterally) of your supporters. You can use a push notification, alerting them of updates. They can view new information without having to switch devices, get online, check email, go to Twitter, visit Facebook page, get on Linked In, etc. With your own mobile app, it’s all in one spot. If you need a mobile app, and without having to spend thousands of dollars, there are options, and you can always search the web.
  6. Use QR codes – Adding QR codes to marketing materials lets smartphone users connect with your organization by scanning your code block. Gain access to additional supporters and future donors with minimal cost.

With these tips, you open up your fund-raising options to a wider audience, and increase the opportunities for fundraising.