In the charity business, we make a big deal about contributions being tax-deductible, but does it matter? In surveys too numerous to count over the years, donors constantly say tax-deductibility is not their first concern when deciding to make a donation. Belief in the cause remains the top priority. So why make a big production about contributions being tax-deductible?

Well, first of all, the federal government requires us to state whether all or part of a contribution is tax-deductible. Secondly, people do like to know that they will get a little benefit from making their donation. And finally, donors need to know this information so they can stay on the right side of the IRS.

The IRS says that if donors receive anything that has more than a nominal fair market value, the amount of that benefit must be subtracted from the tax-deductible amount. For instance, if someone buys a $1,000 ticket to your benefit, she gets dinner, wine, and maybe even some entertainment when she attends. Those things would all have a value if the donor were to get them at a local restaurant. If a restaurant in your area would charge $80 per person for the same thing, then only $920 is tax-deductible ($1,000–$80 = $920). But if you only give each person a baseball cap (which falls within the IRS guidelines of a nominal benefit), the gift is 100 percent deductible.

IRS regulations are fairly complex on what does and does not have more than a nominal value. If you feel so inclined, you can read the details for yourself on the IRS site at irs.gov/charities/article/0,,id=96102,00.html.

When writing grant proposals to individuals, always state very carefully whether you plan to give a valuable benefit in return; if so, you should also offer them the opportunity to decline that benefit. If they want the goodie, they might send you two checks: one from their foundation for the tax-deductible amount and one from their personal checking account to pay for the dinner and dancing.

Tax-deductibility is not the prime motivator, but it is an important part of any request for money. Handle it carefully and with respect, and your donors will appreciate your thinking of their best interests.

It’s seldom necessary to offer anything that affects tax-deductibility for a major gift. In general, major donors do not expect goodies, but they will want information and access when they make an important commitment to your charity. These things meet the IRS’s definition of having a nominal value, and fortunately, they are just what major donors want.

Here are examples of things with a nominal value:

And then there are also the warm and fuzzy things like having their pet’s picture printed in the animal shelter’s newsletter or putting the donor’s name on your building.