Non-deductible funds allow churches to accept donations from givers in exchange for “thank you” gifts while properly accounting for the exchange in the stewardship portal and on the giver’s statements. For instance, you may encourage your people to give to a building project and provide t-shirts for each gift over $100.
The Internal Revenue Service (IRS) refers to this as a “quid pro quo” contribution with special disclosure requirements for churches who file IRS Form 990 and rules for givers who deduct charitable contributions on their federal income taxes.
When filing IRS Form 990 each year, churches can download a formatted report of all quid pro quo gifts over $75 given to their church. Givers’ statements will reflect their gift amount along with the fair market value of the good or service your church provided.
Note: You must be a member of your Finance Team to create a non-deductible fund.
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Create a Non-Deductible Fund
To create a non-deductible fund:
- Login to Faithlife.com and select your Finance Team in the sidebar. (You can also open your Finance Team from your parent church group on Faithlife.)
- Expand Settings in the team Admin panel and select Giving.
- Scroll down to the Funds section.
- Create a new fund (click Add fund).
- Check Non-Deductible.
Note: You cannot edit an existing fund to be non-deductible or change a non-deductible fund to a regular fund. If you need to make changes in either direction, create a new fund.
Non-Deductible funds offer three additional fields:
- Goods/Services provided (required): the name of the good or service your church provides to those who give to your fund. (Visible to givers on giving statements and in the Giver Portal at faithlife.com/giving.)
- Fair Market Value (required): the estimated fair market value of the good or service your church provides to those who give to your fund. (Visible to givers on giving statements and in the Giver Portal at faithlife.com/giving.)
- Minimum Donation (optional): the minimum amount you require givers to contribute to the fund in order to receive the “thank you” gift.
* Recurring gifts are not supported for non-deductible funds.
Note: Non-deductible funds do not currently support multiple gifts. If your fundraiser contains tiers of gifts at different fair market values, we recommend you create multiple funds named by tier (e.g., Legacy Fund - Silver (up to $499), Legacy Fund - Gold ($500–999), Legacy Fund - Platinum ($1000+)).
Managing Quid Pro Quo Gifts
Members of your Finance Team can view details of non-deductible funds and gifts made to those funds in the Finance Team. Individual gifts show the goods or services provided.
When filing IRS Form 990, your church can download a customized Quid Pro Quo Contributions report from the Gifts tab in the Finance Team.
- Navigate to your Finance Team and click Gifts in the Admin panel.
- Expand Export and select Quid Pro Quo Contributions.
- Enter a date range, and click Download to download the CSV.
Pro Tip: When you edit gifts and change its fund to or from a non-deductible fund, Faithlife will update all giving statements, church data, and reports to reflect the change.
Give to a Non-Deductible Fund
When a giver elects to give to a non-deductible fund, the goods or services provided will show below the amount input field.
Each Giver Portal (at faithlife.com/giving) will show the Fair Market Value (i.e., FMV) of the good or service received for any quid pro quo gifts made by the giver.
Each giving statement for givers will also show the Fair Market Value (i.e., FMV) for any Quid Pro Quo gifts received by the giver and a note at the bottom of the statement provides more explanation for federal income tax purposes.
Note: Givers to Quid Pro Quo funds can claim the full amount of their gift as tax deductible minus the fair market value of any goods or services they receive. Each giving statement reflects this calculation.