When an individual or a volunteer group conducts fundraising activities or solicitations using the name of a fund or the Community Foundation name, in the eyes of the Internal Revenue Service (IRS), the fundraiser is being done on behalf of Berks County Community Foundation. The Community Foundation is legally responsible for all fundraising undertaken on its behalf, and the Community Foundation, as well as the donor, can face serious penalties if careful procedures are not established and followed. This causes a number of significant tax and accounting issues to arise. For example, if acknowledgement letters are not distributed or contain inaccurate information the IRS can levy a penalty against the Community Foundation. Similarly, the Community Foundation may be liable for penalties if proper solicitation disclosures are not used.

If the steps outlined below are not taken, donors may be denied a tax deduction; the fundraising group may find themselves unexpectedly subjected to tax on the funds raised; and either the Community Foundation or the fundraising group may be subjected to penalty.

The following guidelines are designed to protect individuals and volunteer groups from liability, provide the most advantageous method for donors to make contributions, as well as present the funds of the Community Foundation in the best light. In addition, these policies and procedures will help ensure that the Community Foundation serves as an effective and efficient resource for all of its donors.

Berks County Community Foundation Fundraising Guidelines

Advance approval
Fundraising to be performed on behalf of the Community Foundation requires advance approval. Allow at least 30 days for approval before beginning any campaign. Advance approval is granted in a timely manner upon receipt of these items.

Please click here for an application. Once completed, please mail or fax to:

Frances A. Aitken
Vice President for Finance and Operations
Berks County Community Foundation
237 Court Street
Reading, PA 19601
610.685.2223
610.685.2240 (fax)

Description
Describe the effort to raise money for the Fund. Briefly outline the fundraising goal, how this goal will be achieved, experience in conducting this type of campaign and why the fundraiser is sure to be a success.

Contact person
This person will serve as the main source of communication between the Community Foundation and the fundraising group. A contact person’s name, address, email address and phone number will need to be supplied. This will help facilitate the approval and acknowledgement processes.

Budget
An estimated budget for the fundraiser will need to be included with the application. Projected revenue, expenses, and a detailed list of both will need to be included.

Please click here to fill out the estimated budget. Once completed, please mail or fax to:

Frances A. Aitken
Vice President for Finance and Operations
Berks County Community Foundation
237 Court Street
Reading, PA 19601
610.685.2223
610.685.2240 (fax)

To be approved for a fundraiser, the individual or group must agree to review all printed and promotional material with Community Foundation staff prior to its release to the public. The Community Foundation retains the right to exercise discretion when approving applications for fundraising events.

In view of the Community Foundation’s role in the community and its desire to remain apolitical and effective in its role as a philanthropic resource, we have identified some activities to which the Community Foundation can not lend its name or that of any of its funds. Those include, but are not limited to:

  • Events that involve political speakers
  • Fundraisers that are expected to net less than $1,000
  • Fundraisers where the percentage of net income raised for a fund is minimal compared to gross revenue
  • Any event that involves activities that may be considered to be outside the standards of tastefulness

When approval is granted, fundraising can proceed according to the following guidelines:

Solicitation Disclosures
Solicitation disclosures are regulations governed by Pennsylvania State Law and primarily concern the type and content of information given to any prospective donor during fundraising activity. When asking for a donation of any type, the following needs to be included on all printed material provided at the time of solicitation:

The official registration and financial information of BerksCounty Community Foundation may be obtained from the Pennsylvania Department of State by calling toll free, within Pennsylvania, 1(800) 732-0999. Registration does not imply endorsement.

Quid Pro Quo Disclosures
If goods or services are provided in exchange for a contribution, sponsorship or fundraiser participation, certain disclosures are required and are most easily satisfied at the time of solicitation. For example, if the group is offering a gift in exchange for a donation at a specified level, the donor can only deduct the excess of the donation amount above the fair market value of the gift they receive. This limitation on the deductibility, known as “quid pro quo,” must be given at the time of solicitation and when acknowledging the gift.

The Community Foundation will assist in determining the fair market value of the goods or services and the appropriate disclosure language. The Community Foundation will work with the group prior to the solicitation activity, and will need information pertaining to the quid pro quo items such as the value of the goods the donors are to receive.

It is the responsibility of the fundraising group to use all disclosures as suggested by the Community Foundation.

Tax Deductibility
Contributions to a Berks County Community Foundation Fundraiser are tax deductible to the fullest extent allowed by law. The Community Foundation is a nonprofit organization, granted 501(c)3 status by the Internal Revenue Service. All donations received at the Community Foundation are acknowledged according to current substantiation regulations issued by the IRS in order for individual donors to qualify for maximum tax savings. Donors should contact their personal financial advisor for advice relative to their specific situation regarding contributions used as tax deductions.

Please note: Raffle ticket sales and rummage sale purchases are never tax deductible. The tax deductibility of items donated and bought at auctions will be determined on a case-by-case basis.

 

Publicity/marketing
All uses of the Community Foundation’s name, logo, or the name of the fund in advertising and promotion must be approved in advance by the Community Foundation.

All fundraising materials should make clear, where applicable, that funds are being raised on behalf of rather than by Berks County Community Foundation.

Community Foundation staff is available to assist with wording that will promote the purpose of the fund and the benefits of the Community Foundation’s involvement to assure the best possible outcome for the fundraiser.

Accounting Process
All proceeds should be delivered to the Community Foundation, along with an accounting of all monies received, expenses incurred (with invoices), and a listing of any outstanding donations and expenses, within one week after the event.

Submit invoices with the initials or signature of the contact person clearly marked, indicating their approval to pay. Invoices will be paid either the 1st or the 15th of a month and only when sufficient contributions have been received in order to pay the bill.

The collection of all money (donations, sponsorships, etc.) is the responsibility of the fundraising group and will not be considered a responsibility of the Community Foundation.

Checks related to the solicitation may be made payable to the fund or to Berks County Community Foundation.

Cash must be totaled and have an accompanying list of gift amounts by donor as well as each donor’s name and address.

Proceeds can be submitted to the Community Foundation as frequently as needed prior to an event along with an itemized list of gift amount and detailed donor records.

In-kind gifts will be acknowledged when company name, contact name, address, and description of gift is submitted. An invoice or statement listing the dollar value of the in-kind gift is also required.

Detailed donor records
The following information will assist us in issuing an accurate and timely acknowledgement letter to each donor. Each letter will contain the appropriate IRS language so the donor is assured the maximum tax deduction allowed.

  • The donor’s complete name and address
  • How the donor wishes to be acknowledged in the Community Foundation annual report or if the donor chooses anonymity
  • The date received and amount of the contribution
  • Whether the contribution was in cash, check, or property*
  • The goods or services the donor received in exchange for their gift

The Community Foundation has forms available that will assist in gathering all information listed above. Acknowledgement letters are mailed to donors within one week of receipt of all necessary information.

*Contact Berks County Community Foundation Properties, Inc. before the gift occurs if someone wishes to donate a gift of property (i.e. stock or real estate).

Payment of expenses
The fundraisers will be responsible for all expenses of a fundraiser and maintain appropriate financial controls and records related to fundraising events.The Community Foundation will directly pay the expenses associated with fundraising activities. Submission of all invoices representing expenses for a fundraiser should be submitted within one week after the event.

Use of the Community Foundation’s sales tax exemption is encouraged. Forms are available for distribution to vendors.

The individuals who undertake a fundraiser are responsible for all financial losses incurred. The Community Foundation will only pay invoices up to the gross amount (less administrative fee) of proceeds and will not be held responsible for losses.

Administrative fee
An administrative fee may be charged for the Community Foundation services that are provided to endorse the event, acknowledge gifts and administer the proceeds and expenses of the fundraising event. This fee will be determined in advance and discussed with the fundraising group. The fee will be deducted from the event proceeds.

Berks County Community Foundation Responsibilities

The responsibility of the Community Foundation will be to:

  • Manage contributions accepted into the Fund from donors, other contributors and sources
  • Distribute payment of all expenses at the direction of the contact person named, up to the amount of gross proceeds net the administrative fee
  • Transfer the net income of the event to the Fund and disburse it in accordance with the governing documents of the Fund of the Community Foundation
  • Provide tax-substantiation documents (acknowledgement letters) to donors
  • Serve as a resource of information on fundraising strategy