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Donated raffle winnings

Last post 04-04-2007 12:24 PM by Kim Gajewski. 8 replies.
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  • 04-04-2007 9:34 AM

    Donated raffle winnings

    Hello all, Our school recently had its annual gala and (token) raffle drawing. The winners declined the $50,000 prize and asked our Director to instead direct it back to the school for two specific projects. We understand from our accountant that we cannot provide these folks a tax letter since they did not actually take possession of the winnings. (Fear not, they will be recognized for their generosity via handwritten note from the Director of Schools.) Anyway, any suggestions for how to make note of this in RE? Obviously it can't go in as a gift. Perhaps just in the Notes section? Has anyone dealt with a similar situation? Thank you! Erin Lockley Annual Fund Coordinator Sacred Heart Schools Chicago, IL
  • 04-04-2007 9:57 AM In reply to

    Donated raffle winnings

    GIVE THEM THE MONEY. Give them the money and ask them to gift it back to you. It is income they may need to claim (I am not a tax attorney so they will have to seek tax advice) and if they are simply refusing it then I believe it should go to another raffle ticket buyer. I can not imagine why your accountant is making it difficult because they should be able to transfer the money with the proper documentation and consider it a gift. It is just as if I asked part of my paycheck to be considered a gift. I never took posession of the money but it is still a gift. Post this question on the listserv on www.fundsvcs.org where there are tons of advancement/development services professionals who specialize in gift accounting, etc. who can answer this for sure for you. Melissa S. Graves Director of Development Services The Village for Families and Children mgraves @ villageforchildren.org www.villageforchildren.org GET ON THE BUS! Check out what the Blackbaud User Society is talking about today at www.blackbus.org!
    Melissa S. Graves
    Annual Fund Development Services Manager
    Pathfinder International
    Watertown, MA - United States

    *please do not send RE questions to me in private messages or emails unless they are too "private" for public eyes. The point of a forum is to get multiple opinions and also to share the answers with the group.
  • 04-04-2007 11:01 AM In reply to

    Donated raffle winnings

    Melissa and all, The winners were quite clear they didn't want the money in their possession in order to avoid the tax penalty. We are grateful for their generosity, of course, but it does make things much more complicated! --Erin
  • 04-04-2007 11:29 AM In reply to

    • Gail Fitzgerald
    • Not Ranked
    • Posts 3
    • Organization: Community Foundation of Frederick County

    Donated raffle winnings

    If they don't want the income then they shouldn't get the deduction so make sure your note doesn't have tax language. You could treat it as income from the gala or as an anonymous gift and soft credit them with a note so you can include them in any kind of recognition you may have. Gail
  • 04-04-2007 11:33 AM In reply to

    Donated raffle winnings

    If they do not want the income then they are refusing the gift. I would think that if the winner refuses the prize it should go to another raffle ticket buyer! You need to be sure you are following your laws in your state with regards to a game of chance. Keeping the money yourself because the winner refused it may not be legal - I personally don't think it is ethical. Melissa S. Graves Director of Development Services The Village for Families and Children mgraves @ villageforchildren.org www.villageforchildren.org GET ON THE BUS! Check out what the Blackbaud User Society is talking about today at www.blackbus.org!
    Melissa S. Graves
    Annual Fund Development Services Manager
    Pathfinder International
    Watertown, MA - United States

    *please do not send RE questions to me in private messages or emails unless they are too "private" for public eyes. The point of a forum is to get multiple opinions and also to share the answers with the group.
  • 04-04-2007 11:35 AM In reply to

    Donated raffle winnings

    Definitely post this on fundsvcs.org - or would you like me to post the question for you? Melissa S. Graves Director of Development Services The Village for Families and Children mgraves @ villageforchildren.org www.villageforchildren.org GET ON THE BUS! Check out what the Blackbaud User Society is talking about today at www.blackbus.org!
    Melissa S. Graves
    Annual Fund Development Services Manager
    Pathfinder International
    Watertown, MA - United States

    *please do not send RE questions to me in private messages or emails unless they are too "private" for public eyes. The point of a forum is to get multiple opinions and also to share the answers with the group.
  • 04-04-2007 11:37 AM In reply to

    Donated raffle winnings

    While this suggestion is of no use to you in the current scenario, it may help for the coming years. We have an anual sweepstakes, where the top prize is either an appliance or cash prize. On our entry form, we include two options. One is an opt out clause (i.e., the enclosed check is a donation only) the other is for only opting out of the top prize. This has really helped us avoid uncomfortable situations such as you describe. As an example, here are our options for this year's sweepstakes: _Please do not include my name in any of the drawings _Please DO NOT include my name in the drawing for the undercounter refrigeratr, but do include it for all other sweepstakes prizes.
  • 04-04-2007 11:50 AM In reply to

    Donated raffle winnings

    First of all, Erin - Where do you find donors/patrons like that? My concern is that the person does not want the money BUT wants to direct where it goes- doesn't that indicate ownership? The winner unfortunately shouldn't have it both ways. If for tax purposes they do not want the winnings (they may have tax limitations with charitable deductions) then I agree that another winner should probably be chosen and the details about the original winners should be documented in the Notes section. However, in Development nothing is as black and white as accountants see it and if this is a consistent faithful donor you may need to be in the "gray" area that only your organization can decide. Carol Galioto Development Database Manager Home Nursing Agency [Email Removed]
  • 04-04-2007 12:24 PM In reply to

    Donated raffle winnings

    We had the same situation this past weekend at our annual charity event, although the dollar amount was much smaller. The winner of the $200 immediately gave it back to the auctioneer as a donation. We will send an acknowledgment letter to the donor that includes the tax-deductible donation. While I am not an accountant, I understand that the winnings should be included on the winners tax statement as well as the tax deductible donation resulting in net income of zero. This may not apply in all tax circumstances. So my first question is, "Have the winners of the prize checked with their tax advisor on what they should do?" If they are clear as to the tax consequences and they must refuse the prize, it should go to the next person. Second (rhetorical) question, if they had this concern of claiming winnings, why did they enter the raffle in the first place? Lastly, by all means get them to accept and designate the gift rather than giving to someone else who may not gift it back to you! Kim Gajewski Wisconsin Lutheran High School [Email Removed]
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