Using Non-Tax Deductible Contributions toward Pledges

As promised in my most recent post, we are going to tell you how to use Non-Tax Deductible contributions to help satisfy pledges. If the contribution does not (and should not) display on the Contribution Statement, how can you do that? Very good question!

The reason we can do that is because of a couple of new features that we published during the holidays.

Let’s look briefly at two examples of using Non-Tax Deductible gifts to satisfy Pledges.

Foundation Gifts:

  • One donor gives through a Foundation to the fund to which he has already made a Pledge.
  • The gift from the Foundation will be recorded on his giving record as Non-Tax Deductible.
  • His Contribution Statement will display in the Pledge Section that he made a pledge and that the amount given through the Foundation (as a Non-Tax Deductible gift) has been applied to the Pledge.
  • The actual donation from the Foundation will not be displayed on his Contribution Statement in the ‘amount given’ by the donor.

Stock Gifts:

  • Another donor gives a gift of stock, with the money received from the sale to go toward the fund to which he has already made a Pledge.
  • The stock gift is recorded as a Gift-in-Kind. This will display on his Contribution Statement in that special section.
  • When the stock is sold, the actual dollar amount is recorded as a Non-Tax Deductible gift to the fund to which he has made a Pledge.
  • The dollar amount will not display as a contribution on his Contribution Statement (that is against IRS regulations), but his pledge will show that amount (from the sale of the stock) being given toward the pledge.

In both of these cases, the IRS regulations have been followed, because neither donor is being given a tax receipt from the church for the dollar amount of the donation. These gifts are not included in their giving for the period on their Contribution Statements. These Non-Tax Deductible donations will merely show as a reduction of the amounts of their pledges.

Remember, you must be very careful in recording donations in order to comply with the IRS regulations. Click HERE to read more and see samples of Contribution Statements which reflect these types of gifts.

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