Fundraising Q & A-5K Fundraiser

 

QUESTION   How should a 5K fundraiser be handled?  Is the registration fee a tax deductible contribution for the donor? 
ANSWER   Typical registration fees for a for profit 5K range from $25 to $100 depending on the amenities available to the runner.   A run that just provides a T Shirt usually is $25.  A run that provides a T Shirt, water bottle, other give away items and food may be $100.  Given those parameters, a nonprofit can determine the value of their run to the participant.   Typically registration fees to run in a nonprofit fundraising run will not be tax deductible to the participant.  Usually a nonprofit fundraising run will involve participants raising money from sponsors.  Those funds raised will be deductible by the sponsors.  A participant who sponsors themselves will be able to deduct that sponsorship portion that is over and above the registration fee.

Ex-Jane Runner pays a $50 registration fee to run in the 5K to benefit Community Nonprofit.  Her friends contribute $500 through sponsorships.   She also adds another $150 to her sponsorship beyond the $50 registration fee.   Her friends will receive a $500 charitable contribution and Jane will receive a $150 charitable contribution.  Jane cannot take the $50 registration fee as a charitable contribution.

The nonprofit needs to carefully word their thank you notes so that it is clear that the registration fee is not a charitable contribution.