Note regarding Sponsorship Payments

SVDP Treatment of Gala Sponsorships and Auction Items

For IRS purposes, a portion of each payment for the Friends of Seminary Gala represents the fair market value of benefits received (dinner and event admission), and only the excess, if any, is a tax-deductible charitable contribution.

• The fair market value (FMV) of each gala dinner seat is $100 per person.
• Any amount paid up to $100 per seat is not tax-deductible.
• Any amount paid above $100 per seat may be treated as a charitable contribution, subject to the donor's individual tax situation.

Your gift acknowledgment will state the FMV of benefits received and the portion of your payment that may be deductible, in line with IRS quid pro quo disclosure rules.

Payment methods and restricted funds

Under current IRS guidance, donor-advised funds and similar charitable vehicles may not confer more than an "incidental benefit" on the donor. Because attending a fundraising event provides such a benefit, these funds may not be used to pay for any part of an event ticket, including tickets bundled into sponsorships. To comply with these rules:

• The full price of each gala ticket, including the $100 per-seat FMV portion, must be paid from personal funds (e.g., cash, personal check, or personal credit card).
• Donor-advised funds (DAFs), IRA charitable distributions, private foundation grants, or similar restricted charitable vehicles may not be used for any part of the ticket or sponsorship amount that covers admission, meals, or other benefits.

You may still use a donor-advised fund, IRA charitable distribution, or private foundation to make a separate, additional gift to the Seminary that provides you and your guests no benefits in return. That gift must be entirely separate from your ticket or sponsorship purchase, and the full ticket price must still be paid from your personal funds. Because sponsor policies vary, we recommend confirming with your fund's administrator before recommending such a grant.

Auction items at the gala

Charity auction purchases are treated similarly for tax purposes.

• For each auction item, a good-faith fair market value will be displayed.
• If you successfully bid on an item, only the amount you pay above its listed fair market value may be tax-deductible, and the amount up to fair market value is a purchase, not a donation.
• As with tickets, DAFs, IRA charitable distributions, and similar restricted charitable funds may not be used to pay for auction items, because you receive more than an incidental benefit.

A written acknowledgment can be provided after the event, reflecting the fair market value and any potentially deductible portion of your payment, consistent with IRS substantiation rules.

This information is provided for general educational purposes and is not legal or tax advice. Donors should consult their own tax advisors regarding the deductibility of their payments.