Tax Deductible Donations Matching Gifts

Determining the Tax Deductible Component of Donations for Matching Gift Purposes

If your organization derives a significant amount of funding from membership programs, annual fundraising galas, or special events, you may have wondered whether those donations are eligible for corporate matching gift programs.

Well the facts are in; your organization may be leaving money on the table by not promoting matching gifts to these donors. In almost every case, the tax deductible component of nearly all cash and stock contributions are eligible to be doubled through employer matching gift programs.

Learn more about corporate matching gift programs.

Tax Deductibility for Matching Gifts

Nonprofit organizations that raise funds through events and memberships should let attendees know the dollar amount that is tax deductible for IRS income tax reporting purposes. The tax deductible amount of the donation, event ticket, or membership is also what donors should submit to their employer’s matching gift program.

The AFP (Association of Fundraising Professionals) states:

The tax-deductible or contributed portion of a ticket is the amount over and above the fair market value (FMV) of any benefits received. It is the responsibility of the organization putting on the event to determine the FMV and to inform the participants of the amount of the contributed portion.

View details on many of the largest national employers which offer matching gift programs.

Calculating the Tax Deductible Amount which can be Matched

It’s up to the nonprofit organization to determine the tax deductible amount of each contribution for tax and matching gift purposes. The first step is to determine the FMV of the benefits received.

One of the most common ways to determine this amount is to compare the benefits received by the donor to what those benefits would cost if it were not a fundraiser.

For example, let’s say you charge $1,000 for an annual Gala ticket. Included in the Gala is a performance by a well known band and a five course dinner. You may determine that the dinner would cost $50 from a local restaurant and a ticket to see the band would cost $100. In this case, the fair market value of the Gala ticket would be $15o which means the tax deductible component of the ticket would be $850.

Donors should use this fair market value, rather than the overall purchase price, on their company matching gift form.

While each organization has discretion in assessing fair market value, the key is to ensure the values you place on each benefit are reasonable. Is it reasonable for a steak and lobster dinner with salad and dessert to cost $10 at a five star restaurant?  Probably not. An appropriate method is to take a look at the menu of a local restaurant and use their pricing as guidance.

Calculating the FMV isn’t an exact science. It could vary by several dollars and any amount within a reasonable range would be acceptable for government reporting and matching gift purposes. The important part is that your organization is taking a fair and honest approach to estimating the FMV.

Bottom Line: Many different types of donations to your organization have a tax deductible component that can be submitted to corporate matching gift programs. Make sure you’re communicating this out to your donors and asking them to submit matching gift requests for this amount.

New York Matching Gifts

New York Companies with Matching Gift Programs

Since Double the Donation’s nonprofits clients come from across the country, we thought it would be beneficial to highlight a few select matching gift companies in key markets. New York City is the most populated metropolitan area in the country so we decided to highlight this city first.

Like most major markets, New York is home to many large employers who offer matching gift programs. With 45 Fortune 500 companies calling New York home, many employees in the New York metropolitan area work for companies with matching gift or volunteer grant program. Is your organization tapping into this source of corporate giving?

Statistics on New York Matching Gift Companies

If you dig into your organization’s database of corporate donors from the past few years, you’ll notice you received matching gifts from a variety of companies. Some are probably headquartered in your area while others may have a much smaller presence. Here are a few statistics on the New York market that may interest you:

  • 45 Fortune 500 companies call New York home.
  • 90% of Fortune 500 companies have a presence in New York
  • 65% of Fortune 500 companies match donations made by their employees
  • 40% of Fortune 500 companies offer volunteer grants for employees

Companies in New York with Matching Gift ProgramsTop 10 Fortune 500 Companies in NY: Matching Gift Companies Highlighted

While it’s impossible to dive into details on all of the companies in New York which offer matching gift programs, let’s take a look at some of the area’s largest employers.

Based on the recently published Fortune 500 list, Verizon (#15), JPMorgan Chase (#16), and IBM (#19)  are the three largest companies headquartered in NY and all three offer employee giving programs.

 

Verizon

Verizon Matching GiftsVerizon offers both a matching gift and volunteer grant program for employees. The company matches up to $5,000 to schools and $1,000 to all other nonprofits per employee each year.

Additionally, through the Verizon Volunteer Incentive Program, employees who volunteer for 50 hours in a calendar year can request a $750 grant for an organization.

Learn more about Verizon’s employee giving programs.

JPMorgan Chasejp-morgan-chase-matching-gifts

JPMorgan Chase offers both a matching gift and volunteer grant program. The company matches up to $1,000 per employee or retiree each year to pretty much any school or nonprofit.

The company also offers a tiered volunteer grant program where grants average $10 per hour volunteered. The grant amount varies based upon the number of hours an employee volunteers.

Learn more about JPMorgan Chase’s employee giving programs.

IBM

ibm-matching-giftsIBM also offers multiple types of employee giving programs. Not only does the company offer matching grants on donations and cash grants for volunteering, but IBM allows nonprofits to receive a significantly larger donation if the organization elects to receive IBM technology instead of cash.

For instance, IBM offers a 2:1 technology grant on employee donations which means if an IBM employee donates $500 to your organization, you can receive $1,000 in IBM equipment or $500 in cash.

Learn more about IBM’s employee giving programs.

American International Group (AIG)aig-matching-gifts

AIG focuses its philanthropic efforts on three main groups of giving:

  • Safety – auto safety, disease prevention, programs that help prevent improper use of prescription drugs
  • Security – financial and educational programs that drive safety
  • Disaster Relief – including support of disaster preparedness and repair of infrastructure in the wake of a catastrophe

AIG has a matching gift program with a minimum match of $25 and a maximum of $5,000 per employee per year.

Learn more about AIG’s employee giving programs.

Philip Morris (Altria Group)

philip-morris-matching-giftsPhilip Morris gives back to its community by donating to organizations with a presence in the areas in which its employees live and work, as well as in the farming communities where it sources its tobacco. The company focuses its charitable giving in five areas in particular:

  1. Hunger and extreme poverty
  2. Education
  3. Rural living conditions
  4. Domestic violence
  5. Disaster relief

Philip Morris has a matching gift program in place where the minimum amount matched is $25 and the maximum amount matched is $30,000. It also has a volunteer grant program that allows a $500 grant to be given to an organization after an employee has volunteered a minimum of 25 hours at that organization.

Learn more about Philip Morris’ employee giving programs.

Other NY based Fortune 500 companies with employee matching gift and volunteer grant programs include:

Additional Resources: Matching Gift Companies in Metropolitan Areas

If you’re like most organizations, you probably aren’t maximizing fundraising from matching gift programs. A great place to start is making sure everyone in your organization is familiar with the largest employers in your area.

If you want to take it a step further, consider providing donors and volunteers with detailed information on their company / their spouse’s employer. By raising awareness and making it more convenient for them to submit the grants, you’ll see an increase in fundraising from these sources.

Bottom line: Many of New York’s leading employers match employee donations to nonprofits. Make sure everyone in your organization’s membership and development offices is familiar major employers in your area that match employee donations.