We have both a golf outing and an auction. I would like to know how others determine the estimate of the fair market value of a ticket to these events - the value of the "goods & services" or benefit received in return for the purchase of the ticket. How to determine the amount that you must report on your receipt or solicitation for the event is what I am looking for. I have spoken to some other non profits who have told me that they use the cost of the meals & golfing fees. Some include the cost of prizes purchased. I think that an estimate of all of the costs involved in staging the event....printing, donated prizes, hole-in-one prize insurance, table decorations etc is a valid estimate of the fair market value of the ticket.
Hi. For the FMV (fair market value) to be IRS compliant, you must include anything that the participant "walks away with". This means the golfing fees (the person walks away with having played golf), the goody bag items (even if these items were donated, you need to inc. the value of the items, regardless of if you pay for them or a sponsor does), any food and beverages, etc. Unless you're giving away your table decorations (which you could "sell" at the end of your event for extra $$), you should not include those or any printing, insurance, etc.
For your sponsors, it's the same situation. Let's say you have a $10,000 sponsor. For that $10k, the sponsor gets 2 foursomes, 8 nice goody bags with premium items, and 8 meals. You have to deduct from the $10k the fmv of those things for the sponsor's actual tax-deductible donation.
I hope this helps.
Good Golfing!
Cindy Hess, Broward Health Foundation, Fort Lauderdale, FL
As the accountant for the Southwestern Illinois College Foundation, I refer to IRS Publication 1771, Charitable Contributions- Substantiation and Disclosure Requirements as well as the IRS's Compliance Guide for 501 (c) (3) Public Charities. As Cindy Hess stated, it is the value of what the donor walked away with, but not necessarily supplies necessary to conduct the event.