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Cancelled Fundraising Events, Written Notice Requirements

On March 10, 2020 MA Governor Charlie Baker declared a state of emergency for the Commonwealth of Massachusetts in response to the spread of the Coronavirus. The Governor’s administration offered guidance to the public to limit or eliminate attendance at large gatherings. As a result, several of AAFCPAs’ nonprofit clients have made the difficult decision to cancel their fundraising events in the coming weeks.  Fundraising events are a key component to a nonprofit’s financial success and maintaining their impactful operations. In order to lighten the impact, clients are encouraged to reach out to the donors to convert sponsorships and ticket sales to donations, rather than refunds.

Nonprofits are required to provide a written notice to donors when a quid pro quo contribution is received in excess of $75. If these notices have already been provided for sponsorships and ticket sales for cancelled events, they will need to be reissued. Donors who elect not to refund their purchases of tickets or sponsorships will need to be informed that their contribution is no longer a quid pro quo contribution. The notice to the donor should provide:

  • A statement that no goods or services were provided in exchange for the donation (if that was the case), or a description of the goods and services provided and a good faith estimate of their value;
  • The amount of the gift, or a description of a non cash gift;
  • The date of the donation;
  • A statement that the organization is a 501(c)(3) organization;
  • A statement that the letter does not contain tax advice; and
  • A statement that they should consult their tax preparer.

The Coronavirus outbreak is a human tragedy affecting hundreds of thousands of people.  Our thoughts are with all those impacted.

If you have any questions, please contact: Caitlin Harvey, CPA, MBA at 774.512.4057, charvey@nullaafcpa.com; Josh England, Esq., LLM at 774.512.4109, jengland@nullaafcpa.com; or your AAFCPAs Partner.

About the Authors

Caitlin Harvey CPA
Caitlin has been serving AAFCPAs’ clients since 2010 and is responsible for planning and executing financial audits for sophisticated nonprofit organizations, including: multiservice human & social services providers, behavioral health agencies, legal service agencies and community health centers. She specializes in audits in accordance with generally accepted auditing standards, Uniform Guidance/Single Audit and Government Auditing Standards, as well as the Massachusetts Uniform Financial Report (UFR). Caitlin develops a deep understanding of the client's business by examining operations and processes from the inside out; this enables her to view controls issues and concerns from the perspective of the Audit Committee and Senior Management.
Joshua England, Tax Attorney
Josh is a tax strategist with extensive expertise advising high-net-worth individuals, nonprofits, and business owners and investors on effective strategies to ensure tax efficiency, asset protection, well-executed succession plans, and wealth preservation. He has been practicing law since 2000 and focuses his practice on the areas of wealth transfer planning, fiduciary and individual taxation, business structuring to maximize tax efficiency, and advising tax-exempt organizations, foundations and charitable donors.