Are Donations to School Fundraisers Tax Deductible?

Donating to school fundraisers supports educational initiatives and local communities. Donors often consider whether these contributions offer a tax benefit. Understanding Internal Revenue Service (IRS) guidelines for charitable donations is important to determine if your support is tax-deductible. This involves specific rules regarding the recipient organization, the nature of the contribution, and any benefits received in return.

General Deductibility Rules

For a donation to be tax-deductible, it must be made to a qualified organization. The IRS defines qualified organizations as those that are religious, charitable, educational, scientific, or literary in purpose. Most public schools are considered governmental units, and contributions made to them exclusively for public purposes are tax-deductible. Many private schools operate as 501(c)(3) charitable organizations, which also makes donations to them eligible for deduction.

Donors should confirm the status of any organization before making a donation. You can ask the school directly about its qualified status or use the IRS Tax Exempt Organization Search tool to verify eligibility.

Specific Types of Contributions

Cash contributions, which include checks, credit card payments, or online transfers, are generally deductible for the full amount donated. Keeping clear records, such as bank statements or canceled checks, is important for these donations.

Non-cash property, such as goods for a bake sale, auction items, or school supplies, can also be deductible. The deductible amount for non-cash property is typically its fair market value (FMV) at the time of the donation. For example, the value of donated used clothing or household items should reflect prices at thrift stores for similar items.

The value of personal services, such as volunteering time to chaperone a field trip or coach a team, is not tax-deductible. While the expenses incurred while volunteering, such as mileage or the cost of supplies, may be deductible, the value of the time itself cannot be claimed.

Conditions Affecting Deductibility

The deductibility of a donation can be affected if the donor receives a benefit in return, a concept known as “quid pro quo.” If a donor makes a payment to a school fundraiser and receives something of value in exchange, such as tickets to an event, merchandise, or a meal, the deductible amount must be reduced. The donor can only deduct the portion of their contribution that exceeds the fair market value of the goods or services received. For example, if a $100 donation yields a concert ticket valued at $40, only $60 is deductible.

Schools and other charitable organizations are required to provide a written disclosure statement for quid pro quo contributions exceeding $75. This statement should include a good faith estimate of the fair market value of the goods or services provided to the donor. However, if the benefit received is of insubstantial value, such as a small token item like a coffee mug, or falls within certain low-cost limits, the deduction does not need to be reduced.

Donations earmarked for the benefit of a specific individual, such as contributions for a particular student’s tuition, field trip, or band uniform, are not tax-deductible. Even if made to a qualified organization, the IRS views these as private benefits rather than charitable contributions to the organization as a whole. Such contributions lack the necessary charitable intent to be deductible.

Substantiating Your Donation

For any single cash or non-cash donation of $250 or more, the IRS requires a written acknowledgment from the school or charitable organization. This acknowledgment must be obtained by the earlier of the date the donor files their tax return or the due date (including extensions) for filing that return.

The written acknowledgment should include the amount of any cash contribution and a description (but not the value) of any non-cash property donated. It must also state if the organization provided any goods or services in exchange for the contribution. If goods or services were provided, the acknowledgment needs to include a description and a good faith estimate of their value. For cash donations under $250, reliable records such as bank statements, canceled checks, or credit card statements are sufficient.

If the total deduction for non-cash property is more than $500, donors must complete IRS Form 8283 and attach it to their tax return. For non-cash contributions valued at over $5,000, a qualified appraisal of the donated property is required, and Form 8283, Section B, must be completed and attached to the return. IRS Publication 526 provides further guidance.