Quid Pro Quo Donations: The $75 Disclosure Rule Explained

Your gala ticket costs $150 and includes a $40 dinner. Your auction winner pays $300 for a $200 weekend rental. These are quid pro quo contributions - part gift, part purchase - and they come with the one receipt rule that carries actual penalties for the organization.

The rule

When a donor makes a payment over $75 that is partly a contribution and partly in exchange for goods or services, the organization MUST provide a written disclosure that (1) tells the donor only the amount above the value of what they received is deductible, and (2) gives a good-faith estimate of that value.

The math

• Donor pays: $150 for the gala ticket
• Fair market value of the dinner and entertainment: $40
• Deductible portion: $110

The disclosure can be on the solicitation or the receipt - the receipt is usually easiest, because the numbers are final.

Template

Thank you for your payment of [$X] to [Organization] on [date]. In exchange for this contribution, you received goods or services with a good-faith estimated fair market value of [$Y]. Only the amount of your contribution that exceeds that value is deductible for federal income tax purposes: [$X-Y].

Why this one matters

Unlike most acknowledgment rules (which affect the donor’s deduction), the quid pro quo disclosure is the organization’s obligation, with a penalty per missed disclosure. It’s also the easiest one to get wrong by hand.

Let the math do itself

In DonorLedger, enter what the donor paid and the value of what they received - the receipt calculates the deductible portion and includes the required disclosure automatically. Try it free for 7 days, no credit card required.