Fundraising in its various forms is often conducted as part of meeting a Team or Chapter’s need for additional financial resources. In the course of making public appeals or holding events designed to raise money, there are some basic facts, which must be considered. As stated before, these facts have important implications for the entire AFS organization and for the donor. The following sections highlight the areas that are of particular interest to AFS-USA.
Fundraising must be conducted in the name of AFS-USA, Inc.
AFS-USA, Inc. is the only legally recognized entity that is registered in the states in which we operate. Any group raising funds and using a name other than AFS-USA subjects itself, the organization and its donors to potential legal liability and loss of not-for-profit status within that state. AFS-USA is required to report all of its revenue and expenses on Federal Form 990 annually. We are also required to report all donations specific to each state to that state’s charitable registration bureau and tax authorities.
Any funds generated through fundraising activities are to be deposited in a Team’s local account or in the centralized NY account. They must NOT be co-mingled in accounts that receive and disburse co-support funding.
Types of Fundraising
Special fundraising events
If a fee or ticket price is charged to an individual who attends an event only the amount of the fee/ticket that exceeds the value of the benefit received by the attendee (dinner and/or dance and/or similar value) is tax deductible. The full amount of the fee/ticket is not tax deductible. The amount that is tax deductible must be disclosed in writing (on the ticket) thus fulfilling the organization’s responsibility in duly notifying the attendee of what can be considered tax deductible. For example: An event ticket is $100. The actual cost is $10 per person for the event. Only $90 can be considered a donation, the difference between the actual cost and the ticket price.
Contributions made to AFS-USA, Inc.
Gifts of $250.00 or more must be acknowledged in writing by each Team and the acknowledgment letter must indicate the amount of the gift received. Gifts of $1,000 and more must be acknowledged in writing by the Development Office of AFS-USA. A sample letter is located on AFS Wiki. All letters must include the following statement “AFS-USA, Inc. has not provided any goods or services in exchange for this gift. This letter serves as a receipt for your gift.”
Gifts in kind and Non-cash donations
There are occasions when someone will donate goods, services or out-of-pocket expenses that are utilized in the delivery of AFS programs. Such non-cash items could be food, meeting space, free air travel, or hotel rooms. Such non-cash gifts should be submitted on an expense form with a note that the expenses are to be recorded as a donation. If the donor asks for a receipt, a letter/form should be issued which lists the gift/s. No value is to be indicated by an AFS volunteer. The donor should seek the advice of a tax professional to determine the amount that may be deductible. The amount of the donated expenses should be noted in the appropriate field on the Expense Report form.
Restricted Contributions received by Teams/Chapters
Restricted contributions are those made by donors that are for a specific named purpose and which are also time sensitive. Most donations of this type that are raised in the field are to fund scholarships.
All restricted donations must be sent to the Field Finance Department, along with any supporting written documentation received from the donor. These donations should not be deposited into local bank accounts.
Fundraising Letters, Forms, and Thank You Templates
For copies of AFS-USA fundraising letters, forms and thank you letters for your team/chapter, please click here to access these templates.
Important Note: Payments made on behalf of specific program participants are not contributions and are disallowed as tax deductions.
Gifts made to AFS-USA, or a Team or Chapter, for a specifically mentioned participant are not tax deductible. In this instance AFS-USA becomes a conduit for a payment that benefits a specific person not AFS-USA. This type of transaction is expressly prohibited as a tax deduction by the IRS.
The only means by which a donor may assist in sending students abroad is through a gift to a scholarship fund. This fund must be administered by a scholarship “committee” which makes awards based on a specific set of criteria established by the fund and which are communicated to the donors.