0:04  
Good afternoon or late morning, depending on where you folks are speaking to us from or listening to us from rather. My name is Tim Sarrantonio, Director of Partnerships at NEON one want to welcome you to today's very exciting presentation. I think it's exciting. I had another member of my team go, yeah, cool, fun accounting stuff. And I'm like, I love that accounting stuff. Thank you. And actually, Gregg, you didn't put enough thank yous because the actual titles? Thank you, thank you. Thank you. The how when, what and why of donor Thank you's. So

0:39  
we're so thrilled to welcome back Gregg Bossen, coming off an amazing presentation at generosity exchange a few weeks ago for the neon one user conference. And we said, You know what, let's get him back. We got a lot of end of the year. questions coming up. So Gregg, without further ado, I'm going to hand it over to you and your team. Thank you again for joining us. All right. All right. And congratulations on generosity xchange also that that was so great. I thoroughly enjoyed

1:09  
enjoyed that presentation. Our first thing I want to do is say hi, how are you? And to let you know my name is Gregg Bossen. And I want you to say hi to me. So if you could put in the questions box. That's how you're going to talk to me and I'm going to talk to you over the next 75 minutes. I want you to put in the question box.

1:34  
Let's see. What time did you get to sleep last night? Put in the questions about Well, thank you, Robert. But putting the questions in and just type it about them time that you got to sleep. So see what time do you get to sleep? Nine o'clock? 10 o'clock? 11:30 3 in the morning. Let's see what we have here cares at midnight. 1030 1130 Let's see if anybody went crazy here. Let's like I love a Sarah 1130 Central Standard Time.

2:07  
Okay, my 1015 and then again at 7 I get a for sure.

2:13  
Hello, Marcia as ago. Cool. So um, and can everyone hear me on camera? Make sure you can hear me? Because if you can't hear me really clearly, then I have to do something else like follow on on my phone or something. So let's make sure could everybody hear but something in the questions to let me know that I sound good. Okay, this is audible but fuzzy Mike sentence anybody else?

2:36  
Because I think it's happened with GoToWebinar the last time I did this. Hey guys that are just joining us. Sounds like you're in a tunnel. Okay, so what I'm going to do is I'm going to call in. And

2:54  
so what Gregg calls in just a reminder, folks for housekeeping purposes. Because Gregg, you're talking but nobody can hear you right now.

3:04  
We are recording this. Because I Yeah, we like we know we lost Gregg, he's gonna switch over to a phone. So um, housekeeping purposes for today's webinar is being recorded.

3:17  
And the slides will be available, you just need to go to neonone.com. Under the events section, you'll be able to find this near the top.

3:27  
And that is something that will also email it out too. By the way, you'll get an email tomorrow, but but we actually try to get it up same day for you. And Gregg's team is here. I know he's going to introduce them very shortly. We got Bill and Paige joining us. So feel free to geek out when it comes to any of the accounting questions that you have and things of that nature. We we won't be going deep on neon CRM receding.

3:54  
Here now. Yes, you are and the end. Yeah, that actually sounds a lot better, Gregg. So hopefully it's okay that you're doing the phone. Okay, cool. So in that case, what I'm going to do is I'm going to take this headset off. Yep. So now everybody is better. You guys put in the chat. Let me know you can hear me and it sounds better because I think this is what Okay, cool. Jenny says good. All right. Yeah, you're getting I'm just doing some housekeeping items for people but we're done. So you can go. Okay, okay, cool. So, um, I am a CPA with an accounting practice in Atlanta, Georgia. We specialize in nonprofits. We do out on them. We probably have four or 500 nonprofits that we either do audits for tax returns, monthly financial statements and bookkeeping consulting on their QuickBooks. Additionally, I have a company called QuickBooks Made Easy for Nonprofits. And we teach people how to use QuickBooks but only if you're a nonprofit organization or an accountant that uses a number that does work for

5:00  
nonprofits. So we have streamable training products, we have tech support, and we have live seminars, and webinars. So I'm going to tell you real quick, we have a three day webinar series coming up in next week, and the following week. And it's two and a half hours a day for three days. All right, and we're going to learn everything you could ever imagine about using QuickBooks, if you are a nonprofit organization, and it's normally 249, we're going to give you 50 bucks off, okay? So it's only going to be 199. For you. Okay. And we'll talk more about it. I want to teach you first and see if you like the way that I teach, before you commit to doing something like that. Alright, so but I just wanted to let you know that right off the bat. Alright. So the other thing is, I have a poll that I want everybody to answer. Let me take a look and see here.

5:59  
So I'm going to launch this poll. And so the poll is basically asking kind of who you are. All right. So are you the executive director of your organization? Or are you an employee that does fundraising for the organization? Or you the person who does the accounting for the organization?

6:22  
Or are you a fundraising professional? Or are you an accounting professional? All right. So we are waiting for answers here. And let's see, we've got 81 people on the call right now 60% of you have voted, which always scares me, makes me think that you guys aren't really listening. I know, this is a free webinar, but it's really going to be valuable at current issue. All right. So let's go ahead and close the poll.

6:50  
And I will share the results. And as you can see, we do have five or six people that do the accounting, but most of the people that are here, right now are people that worry about fundraising. Alright. So that is good. Because we are going to be talking about when, how, why everything you need to know about thanking donors. Alright. And this is the agenda that we're going to be covering, we're gonna talk about, obviously, donor acknowledgments. In general, then we're going to talk about what to do with something called Pure donations. That's when somebody gives money to your organization and you don't give them anything back. Then we're going to talk about what to do if it's a quid pro quo donation. That's where somebody gives money to you. And you do give something back. Alright. See how those are two different things. Okay. So we got to talk about them separately, then we're going to talk about the letter itself, then what needs to be in it, what to include, when to send it, what the penalties are, if you don't send it. Alright. And then if we have time, you can get this letter out of QuickBooks. However, my guess is most of you are getting this letter out of Nia. Okay.

8:11  
All right. And then there are people I'm looking in the chat or the in the q&a, there are people that do both fundraising and accounting for the nonprofit. And I know there's a lot of you that do that. So that makes perfect sense to me. All right. I've got one more poll that I want to ask you before we get started. And the poll is, see,

8:34  
okay, here's the poll.

8:37  
How does your organization currently do thank you letters? Are you doing it in neon? Are you doing it in QuickBooks? Are you doing it somewhere else? And if it's somewhere else I'd like to know, which means put it in the questions where you're doing it if it's not in the or QuickBooks, or are you just not processing? thank you letters at all? Because yeah, I don't really care. But anyway. So let's see, we've got 65. Wow, this is better. See, you have to pay attention. I promise you. We're just about to learn. We got 73% of voted 75%. Let's see. Okay, Mary Ann manually processes a letter from a form. So that's, that's somewhat scary. That sounds like a lot. Tamra. Yep. You're getting them from another database. All right, cool.

9:30  
All right. So I'm going to go ahead and close this and show share the polls. And you might want to pay attention to this because it looks like 42% of you're getting them from Neon 3% are getting from QuickBooks, and over half of you're getting them from somewhere else. Which means I assume you're not using oh wow, I was assuming you don't use neon then. But Sarah uses neon but processes and letters and words.

10:00  
So that's a little odd. I wonder why you're doing that. If you're having me on, you should be processing your thank yous out of me. But anyway, so without further ado, I'm going to start talking about

10:15  
donations. Donation. thank you letters. So alright. So

10:21  
before I go any further,

10:24  
I want to make sure let me see same here using me on the process the letters in Word. I'm curious as to why there are people not using the neon letters. That's strange to me. But anyway, so I'm about to start. So I want you to not answer email, not get on the phone, not look at Facebook, not go to the bathroom. I know this is a free webinar, but do not multitask during this because it gets a little complicated, but I'm real good at explaining it. But you have to listen. Alright, and the seminar is 75 minutes, we'll see how we feel we may even take a break halfway through. Because I mean, I'm interesting, but I don't know that I'm interesting enough to hang for 75 minutes and listen to it. Alright, so without further ado, I'm going to start teaching but somebody in the questions tell me to go. I'm not doing anything. So somebody tells me to go, and then I will start teaching. Okay, thank you, Marian. Alright, here we go. So a few points to keep in mind.

11:25  
Because people get confused about this. Okay. The point of this webinar is to help charities, we're not worried about the donors. Okay. So what the purpose of this webinar is to explain the requirements for charities and what they're supposed to do when you receive donations. All right. We're going to talk about the what the when the why the how a donor thank you letters, some people call them donor acknowledgments.

11:56  
My talk about how to get him out of QuickBooks if we have time if you need to. But the important thing that I want you to understand is that the type of the donation

12:07  
that you get, it doesn't matter. It could be a one

12:14  
that we got, it could be money that you're getting, it could be a payroll deduction donation from an employee, it can be an in kind donation, okay? Doesn't really matter, even in unreimbursed expense paid by the donor directly. Okay. All four of those things. The rules for thanking them are basically the same. All right. So that's one thing I need you to understand. Okay. It's a rule and cost that hoping everybody got has that, as it covers all kinds, all these kinds of donations, okay, money, other stuff, as well as stuff that was paid directly. That doesn't even doesn't even go through your financial accounting package.

12:57  
All right.

13:01  
It says neon doesn't work well with our letterhead. And sometimes we need to customize with individual notes. So I'm a little surprised. But apparently,

13:15  
apparently.

13:18  
Apparently, you can't customize. I think I'm gonna have to throw that. But you can't you can't, Greg, I'm answering in the chat for the neon. Okay. Don't worry. Okay, per QuickBooks questions, though. So, yes, I have to stay in my lane. Right. Okay. So let's move. So first of all, why do you need to thank a donor at all? Well, what is the point of thanking besides like, making sure you get more donations? Why is the IRS concern that you think the donor Alright, well, it helps the donor comply with IRS rules on when donations can be written off. Okay.

14:02  
Now, here's the overall rule.

14:05  
Donations can only be written off on your donors taxes,

14:11  
if it's given to a real 501 C three charity

14:16  
and the person didn't get something back in return for the donation, okay. If they gave you a donation and you gave them back $150 item then they kind of bought $150 item. Okay, so not all what they gave you is donation. Okay. So

14:37  
now again, if they got stuff back, that's not part of the donation, it's more like a sale. Okay. So that's the overall rule. The extent that the donor didn't get anything back, that's the deductible part. So the reason why you're giving a donor a thank you letter is so that you can help them determine whether or not they can write something off and how

15:00  
much they can write off. Okay, that's the overall reason. All right. So just kind of keep that in your head. Okay. All right.

15:08  
And I'm going to ask you to keep this in your head. As we go through this teaching. The only part of a donation is, that's deductible is the part they didn't get anything back for. Okay?

15:22  
In last, there's always an exception with the IRS. And last they thing that got in return was not a big deal, and not why they gave. So if I give $100 to your organization, they give me back a coffee mug, I'm probably going to be able to write off the whole donation. Okay, now I'm going to get into the specific rules. But this is a general theme here, okay. They can always write off donations has to be to a traditional 501 C three, charity, and they can't send anything back in once it's tiny. Okay, so that's kind of the deal with that. What about when they receive membership and exchange? So I'm going to tell you, we're going to get into the details of it. Right now. This is just a general overall understanding. Okay. So the first thing that we're going to cover is not if I'm going to tell you how they define tiny, I'm going to get there. Okay, right now, I just kind of wanted to give you the general overall idea. But before I get into the specifics of what they give back, what do you how do you define tiny? What's the membership? How that works? I want to cover something first. Okay, what about a pure monetary donation? We're going to cover that first, then we're going to do the quid pro quo. Okay, maybe I should have not even discussed quid pro quo until I got this done anyway. So forget about if you give something back to them. Let's just talk about a pure monetary donation that gauges something, okay. Now, I have two columns here. This is pure donation, nothing ever return. I have two columns. Here, I have one column that is going to discuss what the donor has to do. And another column, what the charity has to do, and this is what matters what the charity has to do. But I'm gonna go ahead and have this too, just to kind of show that it's different. Okay? You'll see what I mean. All right, if a donor gives you some gives you a donation, and this is a single donation, okay, not the total of all of the donations for the year, but an individual donation of up to $249.99 in a year, okay.

17:36  
That means on an individual donation, then

17:42  
the donor does not have to have a thank you letter from you. Okay, now, they always have to have some proof a cheque or something like that canceled, check, whatever, receipt, not a receipt, because you don't have to give a receipt but a canceled check, or like maybe their credit card bill showing where they made the donation. But they don't have to have a thank you from you. Okay, that's first thing I want you to understand. And, and again, their bank records good enough, but you, you don't have to give them anything. Okay, so first thing I want you to understand.

18:18  
Now, the second thing I want you to understand, and this is where people get confused is

18:23  
if they give you an A single donation, more than $250 to $3 or more, then they do have to get a thank you letter from you, in order to write it off on their taxes. Now, of course, they're gonna write it off anyway. It's just if they're audited, the IRS will ask for the thank you letter. And if the person doesn't have a thank you letter from you, then they may deny the deduction. Okay.

18:51  
But let me just tell you, the IRS didn't have the money to worry about any of this. So hardly anybody's getting audited these days. I'm just saying but anyway. Alright. So get this though. The donor if it's more than $250 they have to get a written acknowledgment from the charity.

19:10  
This is the big thing.

19:12  
You don't have to give them one. Okay. It's really kind of weird. But they in order to write it off on their taxes, the onus is on them to get a thank you letter from you. But you if you don't get the thank you letter lash out, you are not going to be in trouble with the IRS. You'll be in trouble with the donor because they'll be mad at you. But you won't be in trouble with the IRS. Okay, so the onus

19:40  
is on the donor. Now, I'm not telling you this, because Oh good. I don't have to give thank you letters. Of course you should give everybody a thank you letter out. But for those of you listening that somebody is freaking out, or maybe you're freaking out because you're not getting thank you letters out for your regular donations.

20:00  
You don't have to worry about it. You haven't done anything wrong. Okay. Now, does that make sense to you? Does that make sense to you? Anybody want to answer that?

20:12  
And more if you do, okay, cool. So I just want to make sure that the whole point is that if you didn't give anything back to them, you do not have to thank them. All right. All right. So, uh, let's see.

20:29  
Now this thank you letter should contain if you are going to give them a thank you letter. Again, you don't have to, but if you're going to, it shouldn't contain seven things. It should contain, does it email letter count or paper I was going to get to that. But yes, email letter is fine, doesn't have to be paper, seven things that you should give in the letter. If it's now again, this is just a pure donation letter. And when I say pure donation, I mean, again, for the 15 times, you haven't given anything to them in return, okay, seven things need to be in there, the charities name, the charities, identification number, a declaration of your tax exempt status, again, only 501 C three charities

21:16  
are the kind where if you give to them, you can write it off on your taxes. So we need a declaration of the tax exempt status, that your 501 C three, and we need the name of the donor on the letter, we need the date of the contribution. Okay, we need the amount of the contribution. And we need a statement saying that no goods or services were provided by the organization in return for the donation so that they know didn't buy anything, dude actually just made a donation. Okay, so that's the seven things. Here is a sample and you'll get these slides, you can look at it. But here's a sample. And I'll just zoom in real quick. So name of the donor, here is the date of the donation. And actually, I want to say something about that a lot of times right at the end of the year,

22:11  
you're not open and you'll get these checks dated December 31, even though you received them the first few days, the next year.

22:19  
When you enter them into the software, be sure that you date them December 31, so that the person will get credit for it. All right, even though you didn't technically deposit them or even get them until the first week of the new year. But the intention was to give them to you on December 31, it says December 30, of whatever. Alright, this is the amount of the donation. So that's three of the things or seven things. Then we go down here and the rest of it's down here at the bottom, you'll see we have this big old letter with whatever and there's people that will help you decide what what kind of wording you should put in thank you letters always like to put a link to the website. But anyway, here's the name of my organization.

23:01  
Here is I'm a 501 C three. That's the the next thing.

23:07  
I need your federal identification number on there. And then the final thing, no goods or services were provided in exchange for this contribution. This is the letter if you do not give them anything back. Okay. So are we cool with that? Does everybody understand everybody? Cool? Because if so, I will move on. That's pretty basic.

23:28  
Again, this is voluntary.

23:31  
Now, let's move on to a non cash contribution where nothing is returned. Okay, so this is a pure donation, but it's a non cash donation. This is where people give you goods, you know, clothing, what have you about those, okay?

23:50  
Pretty much the same roles. The donor only needs to get a letter from you. If the value is greater than or equal than $250. You do not have to give it to them. All right. But it's good to do it anyway. Obviously, you should describe the gift in your letter. But you should not value it in the acknowledgement. That's next thing I want to tell you. Okay. You will get donors that will say can you please give me a thank you for this product that I gave you, this computer that I gave you and put in a letter that it was worth $20,000 And then they can write it off on their taxes. You see, when you value your income and contributions and book them and your accountant should be booking them what you value, it is your own business. It has nothing to do with what the donor is going to try and value at it when they write it off on their taxes. So you don't want to put a value on the thank you letter. You leave that to the donor to do alright, and then you value it yourself internally when you do your tax.

25:00  
When you do your 990, or the accountant probably doesn't. Okay. So and the reason why we don't want to do this is because if it's a product that they gave you a thing, we do not want them in front of an IRS agent with a letter on your letterhead saying thank you for a computer where $20,000 Because now you're basically colluding with your donor to help them cheat the IRS. Okay, so we do not want that. That's why if you go to Goodwill, and they are the Salvation Army or whatever, they don't they never give you anything with dollar amounts on it, they want you to fill it in yourself. Is it true for stock donations? Now a stock donation, that's an investment?

25:45  
And so, you know, what I would say is I would leave the value of that, too. It's the value on the date of the stock, but that's something that can be looked up.

25:57  
I mean, I don't I don't know that I'm as worried about it. They are because it's not something that's arbitrary. They can see what the value if it's a publicly traded company chest, so I guess I'm gonna say it's okay to put the value on that, but not on other things. Okay. All right. Here is what the noncash donation letter would look like. It looks exactly the same. The only difference is,

26:21  
why replace the dollar amount with a description of what they gave you. Now, if you get a lot of this stuff like Goodwill does, you probably want to have a bunch of these printed out somewhere, wherever it is, they're dropping off the donations, and then you give it to them. And they fill it in and you've seen this. Okay, you see it every time you go and drop off something at Goodwill, and they give you that little thing. Okay. Cool. All right. So that's it for that situation. Let's keep moving.

26:51  
Okay, now things get weird. Want to talk about what to do? If there is something that you give the donor? Back? All right. So let's talk about this now. Examples would be t shirts, coffee mugs, meal at a function, discounted entry. Memberships? Yes, I put it in here, but memberships. Alright. In fact, putting the questions. What are some of the things that you give to your donors? If there's anybody that has a special fundraising event where somebody comes and they get a meal, you're giving something back to the donor? So so what else do you guys give to your donor? Put it in the question. So raffle tickets? Are you giving raffle tickets to them? Or are they purchasing a raffle tickets?

27:43  
So a tote bag for sure. Yes, yes.

27:49  
Let's see what else here. Discounted concessions? Yes. A silent auction fundraiser for $500 worth of goods. Should we list that amount in the thank you letter in the thank you letter $500. They can't write off only the amount above that. So yes, you should list it in the thank you letter, purchasing raffle tickets for a fundraiser. So I don't think they've made a donation at that point. I think they purchased a chance to win. All right. And so that's not deductible as a donation of free coffee at shows. Yes, you've given them something back trading cards of our patients in our thank you notes, trading cards of our patients. Are you a medical facility giving out pictures of your patients? Are you showing them their ailments? What are you doing? a thank you card and a cookie delivered from a teacher a thank you card is not really a gift. A cookie is something

28:49  
anyway, alright, so that's good. Let's move on. Alright, so

28:55  
I don't else do we have here. Okay. So these are called quid pro quo donations, okay, where something is in return. So what it means is the donor received benefit in some form, either a good or a service, okay, the donor received something in return either a good or a service. Okay. Now, look at what I say here, the charity may be required to send an acknowledgement. So right away.

29:25  
If there's nothing in return, you're never required to send an acknowledgement but if there is a quid pro quo, you may not definitely but may have to send it to college. Okay. So when do you have to send acknowledgments and when do you not okay, so now I've got the same chart pulled up, but it's a donation where you give them something back, okay, and I have a column for if the donor needs something from you, and then a column for whether or not you need to give it to them. Okay. This is going to say whether the donor needs to thank you. This is going to say whether or not you have to give it to him. Okay.

30:00  
So any donation up to $75?

30:08  
Any donation up to $75. Even if you give something back to the donor, they don't need to thank you. Okay, they don't need to thank you. All right. And you don't have to give them a thank you. Okay. So if the donation is up to $75, you never have to give them anything, and they don't have to have anything. Okay? If the donation is between $75.02 $149.99, then they don't have to get a thank you from they don't need a thank you. Alright. But you have to give them one. Okay. In that weird, so for your purposes, if you get a donation more than $75, and you give them something back,

30:58  
you have to give them a thank you. Okay. But there's some exceptions to that. But anyway, now, if it's more than $250, they have to get something from you. And you have to give them something. Okay. So

31:13  
does that make sense to y'all? So the big thing you need to remember is, if the donation is more than $75, and you're giving something in return, it's time to give them a thank you unless exception. exception applies. Okay. So in summary, the IRS requires a charity to send a written acknowledgment only when all of the things are true below. It's a single donation cash or non cash that's greater than $75.

31:42  
Something is given in return to the donor. And that thing is not an exception. Okay, because there's some exceptions that we'll go over in a second. Alright. So let's move on. Alright, so I'm going to give you a poll. This isn't a poll that is in the polls. This is a poll where I'm just going to ask you to answer in the poll. Okay.

32:07  
Do you value their donation as the amount minus fair market value? $100 donation for $10? Shirt? $90? Yes, that's what you do, Jim, but we'll talk about that in a second. Alright, so here a charity gets a single pure donation of $1 million. Okay. Is the charity required to send a written acknowledgment? Yes or no? Yes or no? Charity gets a single donation. First few people already got the answer wrong, Christine?

32:40  
The answer is

32:45  
no. I've said this over and over again. I'll say it one more time. You are not required to give a thank you. They're required to get one from you. But you don't have to give it to them. Okay. And I say that not because I don't want you to give it to them. But just because I don't want you to be freaked out if you haven't given thank you letters when you think you should. Okay. Nothing was given back in, in the to the donor. You don't have to give them a thing. Okay. All right. Is the donor required to obtain a letter from you? Yes or no? Somebody put that in the chat or in the q&a? Is the donor required to get something from you? Is the donor required?

33:26  
Okay, the answer here is?

33:30  
Yes. Okay. Just just trying to hammer home the point I tried before, I wasn't successful with a few people. So how to get to try this again.

33:40  
If you don't give them anything that do not have to give them a thank you letter. But if what they gave us more than 250, they need to get a letter from you if they're planning on writing it off. Okay. And I'm sure you'll give it to them. But if you didn't, you wouldn't be in trouble with the IRS or anybody. Okay. So hopefully, now you understand that. All right. That's why I have these poll questions. Okay. A charity receives a donation of 85 bucks. A long sleeved t shirt is given in return. And it's not an exception. We haven't covered the exceptions yet, but it's not an exception. Is the charity required to send a written acknowledgment yes or no? Give me an answer. Yes or no. Get the answer is yes. Okay. because something was given back to the donor. And the donation was more than $75. Okay. So never have to give it while somebody gives you a million dollars. You don't have to give them a thank you. Somebody gives you 85 bucks and you give them back a t shirt. And now you have to give them a thank you stupid, but that's the truth. Okay, that's the rule. You got it. Okay, so

34:59  
Alright, let's move on.

35:01  
All right, is the donor required to obtain a written letter?

35:05  
What do you think? Is the donor required to written?

35:12  
To to get a letter from you? No, they're not. Because the donation is less than $250. It's really kind of weird. Okay. All right. But this is why you get confused because you're thinking in terms of the donors head, just think about you,

35:26  
you get something, you get a donation, it's more than $75. And you give them something back, you're going to have to give them a thank you, unless it's something small, which we're going to talk about next. Okay. All right. So when do you need acknowledgments?

35:47  
Say, single donation greater than $75, something's given in return. And it's not an exception, kind of repeating that. Okay. So let's talk about what the exceptions are. Okay. One of the there are three main exceptions that will say, you know, what, you don't have to give them a thank you letter, and they can write off all the code that because the reason why you're giving them a thank you letter is, so they know how much of the donation they can really write off, versus how much is them paying for the cost of the t shirt, the membership, the, the gifts that they auction for that kind of effect. Okay? So here's the three exceptions.

36:26  
These three exceptions, if any one of them are true, then you as the charity can avoid and just blow off giving them a thank you.

36:35  
Alright. So the first one is called the token exception. Okay. That means that the thing that you gave back to the donor, I use the word tiny before I use the word really small, not that big of a deal. It's insubstantial. Now, how do you define insubstantial? Somebody asked me that a little while ago, we'll get to that in a second. The second is the membership benefits exception. Somebody was asking about that. And the third one is an intangible religious benefits exception. Okay. All right. So we're going to start with the token. Okay. Here we go.

37:14  
All right. All three of these things must be true. If all three of these things are true. It's a token exception. All right. One, it's part of a fundraising campaign. All right. Hey, you know, and you see this on television all the time, when PBS is doing their fun drive, you know, for $100, we will give you a cup and a great t shirt or something, you know, so part of a fundraising campaign,

37:41  
the charity has to inform the donor, that the amount of the amount that's deductible ahead of time. So in your original fundraising campaign, you would say, hey, for giving $100, we'll give you a t shirt Delta that's valued at blah, as long as you say that somehow in your original fundraising campaign, you don't have to go through the backend and send them each individual thank yous telling them the specifics. And the finally, the final thing is, the benefit has to be a token. Okay, and a token means this is the thing that you've been asking about, the fair market value of the benefits received is smaller than either 2% of the money that they gave you, or $113. So what are we saying here? What is small, we're trying to decide what small, small is, either it's a lesser of 2% of the payment. So if I gave you $100

38:49  
as a donation, if what you gave me back was only worth $2, then I wouldn't have to do anything. And it's a token, okay.

38:59  
And if I gave you, if I gave you a million dollars, then you know, 2% of a million dollars is still a lot. So they're like, Okay, well, the cap will be $113. So this is kind of like saying,

39:15  
the smaller of the basically, it's either 2% of the payment or $113. So if you give more a big donation, then as long as what I give you back is $113 or less, and that's the fair market value, then I don't have to give you a donation. Now. I'm a thank you letter. This is very complicated, right? Isn't it kind of complicated. And so they have this thing. That's called

39:42  
a safe harbor. And here's the safe harbor.

39:46  
If the payment is at least $56.50 for 2020 With at least the donation and what I'm saying is if what they gave you is at least $56.50

40:01  
And the item given bears your name or your logo.

40:06  
And it costs the organization no more than $11.30. That's then it's called a low cost article. And it's considered small enough. Okay. So this is really important. So I think I want to keep this on the screen for a second. And I want to see if anybody has any questions. Because basically what we're saying here is, I can get out of doing it. Thank you if the thing is small. First of all, it has to be related to a campaign.

40:37  
Yes, have to tell them in the campaign, how much the thing they're getting into valued at. And then it has to be a token. And it's going to be a token, if for sure, they gave me more than 56 bucks, and the thing that you're giving them didn't cost you more than $11.30. And or you can go with this way of calculating whether or not it's a token, less than 2% of the payment, or $113. But this is a pain because it means you've got to do a separate calculation for every single donation. But if it's a standard dollar amount, you're asking that it wouldn't be hard to do.

41:16  
So does anybody have any questions about this before we move on? And I'm going to ask you to just say no, or yes in the chat, because I know this is a little complicated. Anybody got any questions about it?

41:28  
Anybody at all? Put something in the chat, put something in the questions, and so I made sure that you're even listening to me, and you're not bored.

41:38  
Alright, it looks like everybody is good. It looks like everybody is good. All right, cool. So everybody's listening. Everybody is alive. Okay, great. I like that. So let's see, I think I have a couple of questions here. Let's see.

41:52  
One thing to remember here is that on that $11.30, for what you're giving them back, it's whatever the organization, it costs the organization, okay? Because a lot of times, what you're given, you know, what you give out is pretty cheap for you. Okay. So it's the cost the organization, sometimes what you give out is being donated to you, in which case, you will need to figure out what the fair market value the donation is, and that's how you'll track it. But now, bio says it's clear as mud. Hopefully, you're not serious. Okay, we get a coffee cut to all donors over $100. So we're in the safe harbor. Yeah, exactly. You don't need to worry about that, of course. Okay. So, see, that's the token exception. And what that means is, not only do you not have to give them a thank you, but they can write the whole thing off, which is one of the reasons why you don't need to give them thank you. Okay, so that's what the dealio is. Alright, enough of that. Alright, so I think, let's see where we are here. We've got looks like we got a half hour left.

43:02  
I don't know what do you all think? Do you want to take a little break here? Or do you want to keep going?

43:08  
It feels like we should take a quick break. I'm going to take, I'm going to take just a real quick break. I'm going to do a five minute break. So you can go to the bathroom or something like that. Okay, please. We like to keep things interesting here. So let me open up something so that I can give you a nice little clock to go by and play music for you. But I can't play music on this platform. So here we go. So it's a five minute break. So I will see you in five minutes.

48:08  
Alright guys, I'm going to go ahead and turn my webcam back on. Okay, there we go.

48:16  
And

48:18  
him.

48:20  
I'm going to ask you to address this question. I want to make sure Tim that you are with us. Yeah. So

48:30  
yeah, Amy wanted to know I baited her question kind of is like how does me on handle this kind of thing? If you give someone a token gift you need to record that in neon somehow if you give someone a bigger gift that's big enough to need a letter

48:49  
How do you record that? So

48:52  
and I think this gets into question because we even got an email from someone who was like Oh, I thought this this was going to be on like creativity of thank you notes. Right. And Ryan, so one I would totally want to do that webinar and to you actually get address this URL. I know I'm not sharing my camera would you prefer if I share my camera real quick so Oh, that's fine. Doesn't matter to me. We don't you know what, we don't want to scare anyone off so I'm going to keep it off. So

49:20  
real the real question here is one Amy what you mean by token and you can drop me a line at Tim at NEON one calm so I don't want to take us off.

49:32  
He's referring to what I'm talking about, which is basically if you give somebody

49:39  
otherwise and the pro acknowledgement must be true part of the fundraiser, okay, token accepted. So

49:46  
Oh, yeah, this thing so okay, no matter what, when you are receding somebody through the system, you could do a few things.

50:00  
So one if you're giving them a physical gift,

50:07  
then

50:10  
yeah, I'm thinking about this a few different ways. So thank you that the thank you letter that you give them has to say what the value is of what you gave them? Because really the question is, how do you get that into neon? Is that something you manually put in? Or is there a field where it's say you do a fundraising campaign? Is there a field where you can put in their way anybody who signs up to become a platinum member? You know, the thank you letter needs to have X amount of dollars in the part where you say what was. So if you if you do this type of fund raising, and this is also one of the reasons why I don't necessarily find it to be an effective form of fundraising, because you're creating a transactional relationship with the donor where it's like, you get like your tote bag, right? Like you get a mug. And what you're doing is establishing that. And Greg and I can discuss the philosophical items here. But realistically, the answer is, if you need to track this, you can create donation custom fields, that addressed this type of item, or put it in the payment note field, as something like to insert into the receipt automatically, you could say, oh, you know, like, that's what I would do. So one, I did actually link earlier to the payment note, one of the most underutilized automation features of personalization or addressing these types of things in the system for an email. When it comes to something like a letter, you have a lot more flexibility, especially if you do use something like a push for merge fields into Microsoft Word for a little bit more personalization is you can include those in your your kind of push your mail, merge, or export, and do whatever you want with them. So if you're using random custom fields, like I'm going to insert the stock ticker, like, like information, right? Like, those are things you can do with the CRM through customization.

52:09  
And so that's, that's what I would do there for that flexibility, the vast majority of the gifts that are getting entered into the system, I imagine know, for folks are not having token elements tied to it. And it's just you're you're using the system to track good stewardship with them and and engaging them as a as a happy donor, basically, yeah, Amy, what I would say, and then we'll move on, if what you're giving them meets the token exception, then you don't even really have to give them a thank you at all, if you give them a thank you through neon, why bother putting in anything about the token, you don't have to say anything, it's already cool. Now, if it's more, and you do have to include it, then what he's saying is, you need to put it in there in your in the format of the letter, the receipt that you're planning on giving them Yeah, and you can use either a custom field or the what was the other table.

53:09  
And and even the end of the year receipts optimizations that we've come out with that look really good in the newsletter features that we've upgraded to, we basically built them to look better for your end of the year, and also give you a little bit more flexibility of what to include and what not to include. Like, if we did this webinar, like a year or so ago, like we wouldn't have that we realize that and built out that end of the year, like I want to show literally every single 12 gifts that somebody has given monthly, like it looks great. And there's a whole token, that's just a fancy word for the mail merging and the email and letters. And we built it to overhaul like how that display. So it looks really good in something like an email a letter and gives you flexibility of what to include there. And there's some flexibility that might apply to this token exception to so this is one way to set up time with your consultant though. Yeah, I mean, you know,

54:06  
one thing you could conceivably somebody could say, oh, well, why does it mean on do this, like, when you set up a fundraising campaign, you can put in a field and put what the value is, and then neon takes it from there because they know what the rules are for the toast reception. So then the thank you letter already has been I mean, that would be fancy. But anyway, just throw it

54:26  
out. Just make sure to focus on like the core basics that can be automated and free that time up. And then if a donor does need that more personalization, then take the time and have a process to do that potentially manually. Yeah. So let's move on. So this is a poll for you all to answer, not in the polls, but just put it in the q&a. A charity runs an ad, requesting donations and saying that donors that give more than $100 will get a coffee mug, a coffee mug, the coffee mug with a logo

55:00  
Go is given in return that costs the organization 11 bucks. Is the organization required to send a thank you. So go ahead and put that in the in the q&a? Is it a yes or no? What do you think? Yes or no? Okay, good. It looks Oh, my God demands she says.

55:20  
So, alright, so basically the answer is no, because the token exception applies, okay. Again,

55:30  
what you're giving them back is less than $11.30. And the thing that you're giving them has a logo on it. And you told them ahead of time, that they'll get a coffee mug, so we're good. Alright. So enough of that. Now, let's do the membership exception thing. So how many of you have memberships that you were I can become a member of your nonprofit? Put it in the q&a? Does anybody have memberships? I know somebody asked about it before. Yuko does? Sue does Kara does. Okay, so let's talk about this. Because a lot of times like the zoo, you know, I become a member of the zoo, right? And then I get a discounted entry fee, that kind of a thing. Okay. Would you consider that the same as giving society? Possibly? Depends? Let's assume yes. That now you are a member of the Giving Society? So I'm going to say yeah. Alright. So here we go. Memberships. Okay, you can blow off giving them a quid pro quo, which means basically, the donor can write everything off, if it's an annual membership, if the membership is $75 or less, all right.

56:46  
And the benefit is annual recurring rights or privileges, which might be free or discounted admission, like I said, for the zoo, or discounts at a gift shop,

57:00  
or free or discounted parking. All right. Now, um, let me see. Now, if you gave them other things besides these recurring rights or privileges,

57:14  
that aren't tokens, and then you'll mainly descend an acknowledgement for that other stuff. But this membership benefits exception. This is when it's like a membership to something where you're getting something like this pack. We're not talking about glorified donations, you know, where I'm becoming a member of PBS. When I'm not a member of PBS, I don't have there's nowhere to go and get discounted admission or anything like that. It's just a glorified donation. Okay. In that case, I'm not really getting anything. If I get a coffee mug, it's a token, then I don't have to get a thank you. We're talking about, you know, memberships more in the traditional sense. Okay. So let me make sure nobody has a question on that.

58:00  
I think we're good. All right. Cool. So and then the last exception is the intangible religious benefits exception. Is there anybody in the house of worship? Any that's in this session? Anybody a house of worship?

58:14  
Go ahead and put it in the chat. So this would be

58:19  
let's see.

58:22  
All right. So this would be a charity that's operated exclusively for religious purposes. Okay. And if you're giving them intangible religious benefits back, like admission to church, or, you know, the best seats in the house, for midnight mass, or, you know, for Passover, or something like that, or wind use during the mass or Bible study have access to these things.

58:53  
That is, okay. And you don't have to give them a thank you. And they can write off the whole thing as a donation. Unless, of course, you gave them other things as well, that aren't tokens, and then you still may need to sing an acknowledgement. So here's what you need to include in the letter for the quid pro quo, the charities name and the EIN, the charities tax exempt status, the date of the contribution, the amount of the contribution and a statement. Now, it's basically this is the same as the other things that you need to give. It's matter of fact, I need to change this a little bit. Hold on a second here. I'm going to go and change something real quick on this. Where is my

59:36  
cool, I did this, I need to fix this. So I'm going to fix this lie. So the other one was seven and it's going to be seven things as well. What I forgot was the name of the donor, you'll need that as well.

59:52  
Name

59:57  
and then

1:00:00  
Let's see, I think that's it 123456 The amount of contribution. And

1:00:06  
with the seventh thing was, Oh, I know, the octave, the EIN is its own separate thing here.

1:00:13  
Alright, there we go. All right, now it's seven things just like it was on the pure donation. So for a quid pro quo donation to make this a little bit easier for you to see.

1:00:25  
There we go, we've got the charities name, the EIN, charity, taxes and status on a 501, C three, charity, name of the donor data, the contribution, the amount of the contribution or description. And then instead of a statement saying there's no goods or services being given, you say what the goods or services were, and you give a good faith estimate, okay, here's a copy of the letter very much like the letter that we gave before, it has all the same information in it. But you know, this is, you know, thank you for reversing of VIP tickets to the synergy Gala, your VIP ticket purchased on blah, blah, blah, the amount $120, you know, blah, blah, this is maybe could be on the receipt that you're giving them out of neon or whenever your CRM is. But at the bottom here, here's the letter, actually, you know what I mean? Here's a little piece where you tell them what it was worth, let me go ahead and there you go. made it bigger for you. Synergy Now is an exempt organization as described, and bla bla bla, we estimate the value of the events, food and entertainment you received to be $45. The remaining amount of $75 can be considered a charitable contribution. For tax purposes, please check with your tax preparer trouble. Okay, so that's the letter. Okay. And then

1:01:44  
there's always a question as to how you determine what the fair market value is, right? I think I have a little bit yeah, what is the fair market value. So it's the cost that the donor would pay for the item commercially. So if it's a coffee mug, maybe five to 20 bucks to t shirt, maybe 10 to $20, basic buffet style meals, you know, at an event 15 to $20, sit down fancy fancy meals, 25 to $75. Now, you could have gotten the caterer to donate it to you doesn't matter, it's the fair market value of what they are getting. Okay.

1:02:21  
Let's say it's not the charities actual costs. The only time you're worried about the charities actual cost is if you're trying to meet the token exception. Okay. All right.

1:02:34  
And when should this acknowledgement be sent? It should be sent,

1:02:39  
try to do it? Well,

1:02:42  
the best would be to do it right after it happens, okay. But at a minimum, do it by January 31 of the following year. But the donors have to have it, just so you know, if they need it, they have to have it by when they filed

1:03:00  
and the due date, April 15 Plus extension, the earlier of those two, okay, so whenever they file, they need to have it if they file before April 15. They need it before April 15, which is like I like to say, let's get it to him by January 31. Now, ideally, you'd be thankful to them immediately. Okay, why wait months to thank them. That's crazy. You want to have a relationship with them ongoing, you know that. Okay. All right. What format is acceptable? Somebody already asked that has to be in writing

1:03:29  
a letter a postcard a form, it can be a computer generated for an email is fine as well. Right?

1:03:37  
You can also do it in QuickBooks. For those of you that don't have neon, you could do it directly in QuickBooks. Regarding the date of the contribution with the exception of the year and donation. Is it acceptable for the nonprofit to put the date of receipt of the donation? Yeah. Oh, yeah. Paige has already answered that. Yeah, that's perfectly fine. All right. Here's the penalties. So if they you don't give them a thank you letter. For a quid pro quo. Remember, thank you letter, nothing given back, no problem. But thank you letter quid pro quo, they'll lose the deduction. Okay.

1:04:13  
For a charity. This is the only thing you have to worry about. If it's a quid pro quo deduction. And you it's not a token exception. Okay. And the gift is more than what they gave us more than 75 bucks. Then. If you don't give them a thank you. It's $10 per contribution. The maximum penalty is $5,000 per event per mailing because it's for fundraising campaign. Okay. All right.

1:04:42  
And here's another poll, just to see now.

1:04:47  
Read this carefully. And this is not a real poll. This is on your q&a. Okay. A local nonprofit radio station, has a direct mail campaign and asked for donors to give 350

1:05:00  
dollars to become a sponsor. Okay. In return, they get a shirt that's valued at 40 bucks and cost the charity $10 each. Okay? The response was 100 people gave $100 100 People gave $300 and 100 people gave $350. The charity didn't send an acknowledgement and was later by the audited by the IRS, what was the penalty?

1:05:28  
There's no way you'll be able to. Actually, there is a way.

1:05:34  
So I'm going to let you just look at this for a second here.

1:05:38  
Let's see.

1:05:42  
Jen got it.

1:05:45  
Jim got it.

1:05:48  
Anybody else?

1:05:50  
T shirt valued at $40 cost to charity $10 each?

1:05:57  
Yes, you got it. I'll stop now to two people that have been bold enough to answer got it. There was all these numbers in here that made it complicated, but because the shirt costs the charity 10 bucks. Again, that's the only time you worry about the cost rather than the fair market value is if it's the token exception, Dale, you're trying to get it $0. Okay, so congratulations for the five of you that actually got that. That's really kind of cool. So

1:06:26  
I want to take you before and we'll finish up in a second, I'm going to give you some

1:06:34  
some stuff right here at the end. But I want you to go to QuickBooks Made Easy. Because if you like the way that I teach, and you want to learn more about QuickBooks, or you want to send whoever it is that does the QuickBooks in your organization, we are doing a three day webinar series.

1:06:54  
And we're doing it next week, the ninth 10th and 11th. For two and a half hours a day, we'll take two breaks and real easy, it'll be fun. I'll be the one teaching it, I'll be able to play music. And this is for those people that are using QuickBooks Desktop. And this is for those people that are using QuickBooks Online. The desktop three day series is next week. The following week is the online series. We only do this twice a year. So I'll click on this one. And you'll see this is everything that's covered in day one, day two, day three, in credit card activity, tracking pledges, tracking restricted grants, special fundraising events. Day two is entering income memberships, entering expenses, pointing, paying bills, day one is all about setting things up getting used to the screen sending up accounts. So if you have somebody that needs to learn about QuickBooks, we're going to give you $50 off. All right. It's normally 249. We're going to give it to you for 199. Here's the code neon five zero in e o n five, zero 50. All right. And I think that's all I have, you can get thank you letters directly out of QuickBooks. If you're using QuickBooks Desktop, I'll just show you.

1:08:20  
Were I've already done one. Let me see if I've got this in here. Yeah.

1:08:26  
I created this directly out

1:08:30  
of QuickBooks. Okay, a donor thank you letter, I can even add my logo to it, like formatting

1:08:38  
to my data layout, you can create these things directly out of QuickBooks. It's quite cool. We add my image I add a logo to go somewhere where my logos are. And let's see where my desktop is. Actually, I can go into pictures. There it is. Alright, let's see if I find a logo in here.

1:09:04  
Here's a nice little logo.

1:09:08  
And there we go. And then I can move it up there and I'll make it bigger

1:09:19  
and so Alfa preview, she can get it right adequate books. Look at that. Thank you domination for $1,500. You can also get it directly on the Online Edition as well. So I'm going to bring a

1:09:36  
page on if you are here still page. Say hello and let me know if there's anything that I missed.

1:09:45  
Low

1:09:47  
Yeah, hey, I don't pay I don't believe so. Got a smart class today. Not not too many questions.

1:09:56  
Cool. Cool. So the only other thing is in the questions

1:10:00  
I want you to put one word to describe how you're feeling at this very moment. All right? How are you feeling at this very moment? It can be happy, it can be sad, it can be excited. It can be scared, it could be constipated. Whatever it is, but I want one word here.

1:10:19  
Is there a certain role when it comes to donors covering fees on the donation desk? That yes, it's the same as the donation. Okay.

1:10:28  
Let's say, This is great. We've got new, we've got all kinds of honest answers. They're excited and formed better, better stress. Satisfied, hungry, ready, newbie, good surprise. Oh, calls a good one.

1:10:45  
Compliance.

1:10:47  
Alright, I'll let you take us out. Hopefully, I will see you at this webinar next week or the week after, I'd like to take us out Tim. Absolutely. The follow up email that will go out tomorrow, we'll also have a direct link to get you to all the webinars from our friends at QuickBooks Made Easy as well as today's recording, we're gonna start working on that for you today. And also, the feedback that I got is, is I need to make a SR version of this for the more creatives and the marketing people who want to write flowy copy in their things. And so well, you know, who can do that? I think I think I know who might be good. Who's that that your your, your friend, the one you just did a little conference with, she's probably a perfect person for Julia Campbell's good Mary Kalon Pamela grow Lisa Sargent, a lot of friends in the neon one ecosystem. To do that we're so bio, for instance, the slides will be included with this, we're gonna get all that work in. And so I don't want to add a bunch of extra junk at the end for the recording. So, folks, the only thing that this is our second last webinar that we have formally scheduled for 2021. Because people were about to go into that end of the year planning zone. So two things for you. If you want to continue to feel good supported, we also do have our year end connections, weekly prompts, weekly tips for fundraising going into giving Tuesday and things like that. So definitely check that out. We have a new Slack community, actually where we're, we're sharing tips and ideas and things like that with each other. And then what are you doing? The poll? What are you doing?

1:12:38  
Oh, I was gonna do a poll, but I won't go into your poll. Is this your for your quick?

1:12:44  
Yeah, I forgot to do you do your quick tips, Paul, this is if you want to get Greg's tips, we have our own tips. Maybe we'll combine all the different types of of suggestions too.

1:12:57  
But the if you go to neon one.com, that and this is a great newsletter, definitely check that out. We'll be we'll be making sure that folks who are opted in get over to Greg's team,

1:13:11  
once a month newsletter with a little tip on how to

1:13:15  
Yes, maybe that'll help the the numbers go up, which are which are quite high.

1:13:21  
So folks, to check out our next webinar, it's going to be in December, and it's a wrap up of Giving Tuesday results. And then we're also going to preview our donor behavior report that I'm currently working on with our partners at visa some amazing data on the changing landscape of donor behavior. And we got a fun surprise that will debut as well. So

1:13:48  
cool, Greg, I mean, I That's my thing. So

1:13:54  
all right, well, whenever you we can close this, whenever you're ready. It looks like everybody who's going to answer answered. So I'm going to go ahead and close the poll. Alright. And that's it. Thank you, folks. We're going to get to work on getting this to you. You'll see it no later than tomorrow. And with the slides and and actually the slides are in the handout by the way, I forgot I did upload it. So if you're like I'm going to give maybe people 30 seconds to be like where's the handout and go to webinar? And so it's under handouts, you can download that rest assure if you're like I do, I do not know where that is like you're gonna just be able to click it and download it not have to enter another email or anything like that. So,

1:14:36  
Greg, if I don't talk to you for the end of the year, happy holidays and all that, but I imagine we do. So. Definitely. Alright folks, rocket. You got this. Thank you so much for this. We love doing this type of stuff with Greg and we'll see you all soon.

1:14:56  
All right. Bye, guys. Bye.

Transcribed by https://otter.ai