Does giving donors naming rights to buildings and programs make for good philanthropy? Careful evaluation and planning are warranted for charitable organizations and their donors. Along with protecting the donors’ tax-deductible gifts, other significant areas to address include manner of recognition, timing, reputational considerations, and changed circumstances.
As part of a large spending package to avoid a government shutdown, Congress passed legislation repealing the infamous “Nonprofit Parking Tax” – an income tax on the cost of parking provided by nonprofit organizations to their employees performing exempt charitable, religious, and educational activities. The repeal of the Nonprofit Parking Tax is retroactive – the legislation literally states that the effective date of repeal is as if the tax was never in the original law. The bill was signed by President Trump on December 20, 2019.
Recent presidential impeachment hearings have raised the Latin phrase quid pro quo to national attention. What does it mean? The literal meaning of quid pro quo is “something for something.” Put differently, a quid pro quo exists when something is given in exchange for something else. In Thanksgiving parlance, quid pro quo may mean a person better bring a dish (or two) to share at the holiday table! For nonprofits, this term applies to charitable contributions and payments for goods and services, with critical distinctions affecting tax deductibility, tax receipting, and potential “private benefit” tax issues. This article provides a helpful primer on these important tax issues with a special holiday spin.