Dear FundSvcs & Advance-L colleagues,
The following e-mail message, sent this time every year, has been verified and validated by attorneys and IRS representatives. A Canadian colleague has repeatedly confirmed the Canadian references.
As a reminder, the IRS released the 2009 allowable benefit levels, below which no receipt disclaimer is required, several months ago. You will find that information both in the FundSvcs & Advance-L archives as well as at the download site at
www.FundSvcs.org. In fact you will find copies of what I consider all the relevant IRS forms and publications (some mentioned below) at the same site.
With that, here's the "traditional" Annual Date of Gift message, with a few updates:
Annual Date Of Gift Message
In the United States the IRS does not require any date of gift on acknowledgments/receipts. In Canada two dates are required: the date you received the gift and the date you printed the receipt. NOWHERE IS A "DATE OF GIFT" REQUIRED IN EITHER COUNTRY. In the most recent version of IRS Publication 1771, however, the IRS does suggest providing a "date received." My personal preference, however, remains "date processed." The acceptability of reflecting a processed date has been confirmed with the IRS.
We are often faced with the dilemma of donors sending in last minute end-of-year contributions and being frustrated when they get a receipt mentioning a "gift date" in January. I would be too. In fact, it is not the donee's responsibility to assign a date of gift. That responsibility clearly falls on the donor. Were you, as a donee, to state a gift date on a receipt you could, in theory, be required to produce evidence supporting that date during an IRS audit of one of your donors. Stating gift dates on receipts would necessitate your keeping envelopes with postmarks, for example, for the required IRS statute of limitations. That is why the only time I suggest mentioning a gift date is for gifts of securities IF you feel like providing a value for them (not required per IRS Publication 1771 as securities are gifts of property). However, if you choose to do so, make sure that you include a disclaimer advising the donor that the value - and date - are being used for internal purposes only and to seek official guidance from their tax advisor. My suggested receipt language for these instances is as follows:
"Thank you for your gift of X shares of Y stock, which we have valued for our internal purposes only at $Z as of MM/DD/YY. For tax purposes you will want to seek guidance from a tax professional in determining your deductible amount."
Duke University, during my nearly 15 years there, rarely received a complaint from a donor about showing a processed date and not a gift date. The phone calls literally went away 15 years ago when, for the first two weeks of January, Duke began including the following message on receipts in lieu of the normal fund, department, or school-based message and/or signature (I believe Duke no longer even needs to add this reminder):
"May we remind you that the date above reflects when we processed your gift, and does not imply the date your gift was made. While you should consult with your CPA or tax preparer to determine the tax consequences of your donation, the date you delivered or mailed your donation is generally recognized as the gift date. The determination of the
contribution date is entirely your decision. Should you have any questions concerning this matter, please contact me."
Don't get caught up trying to ascertain gift dates for your donors. But, since I am asked "When is a gift a gift?" every year, here are some common answers, and misconceptions:
The date on the check HAS NOTHING TO DO WITH REALITY. It's not a legal date of anything. Why some institutions find a need to record this date in their system is unclear (although many software packages include this field). Entering this date is a waste of time, IMHO, and certainly cannot be used to represent the date of gift, the date received, or the date processed. To save data input efforts, and to standardize gift processing, the only date I suggest you reflect for most gifts is the date the gift was entered on your system - which is usually automatically inserted - hence the phrase "processed date" recommendation I offer.
The customary "legal" date of gift for mailed contributions is the date of postmark. This, however, is not true for metered mail. Nor does a postmark reflect the legal date of gift for some other, non-cash, forms of gifts like credit card and stock donations. For credit cards, regardless of when or how the donor tells you to debit their account, the legal gift date is the date the charge hits their account. For stock, things get a bit more complicated. If the donor mails it in, the gift date is the later of the two USPS (not metered) postmarks for the certificate and stock power. If DTCed, it's the date of DTC and NOT THE DATE THE DONOR TOLD THEIR BROKER TO TRANSFER THE GIFT. For the gift to be consummated the stock MUST be registered in your name or in the control of you or your legal agent.
For items sent via third parties, like FedEx and UPS, the gift date is the date you sign for, or take into your possession, the package, not the date it was sent (a donor can recall items "mailed" this way until you have signed for it - thus the item is still in their control until control is yours).
From Crescendo regarding gifts by check: "These "check" rules apply despite the fact taxpayers could hypothetically stop payment on the check and negate the actual gift. One word of caution: postdated checks are not deductible when hand delivered or mailed. A postdated check is a promise to pay in the future and, thus, not deductible at time of delivery."
From Crescendo regarding credit card gifts: "Gifts by credit card are deductible in the year when the charges are made on the card owner's account."
From Crescendo regarding electronic delivery of stock gifts (dealing with a broker not acting on a transfer request when it is made): "Stocks are frequently transferred by electronic delivery. For instance, stocks are usually held in "street accounts" with financial services firms. While a taxpayer may irrevocably instruct his or her broker to
transfer the stock to charity, the gift is not complete until the stock is delivered to the charity's account. This means that the gift date for tax purposes may be days and possibly even weeks after the taxpayer's instructions to transfer. This poses a potential problem to last minute charitable contributions."
I hope everyone has a happy holiday season and few, if any, frustrated donors! Feel free to call/write if you have specific questions. A more "official" source than me for this topic is IRS publication 526 as well as IRS Publication 1771.
John Taylor
Associate Vice Chancellor, Advancement Services
North Carolina State University
Box 7474
Raleigh, NC 27695-7474
919.513.2954 (o)