Q & A

Question
You are putting on a Gala with music dinner and drinks included. The ticket price is $175. Our venue and some of the other event expenses such as invitations and music have been donated. How do you figure out the deductable amount of the ticket price? Is most of the ticket price deductable because most of the event expenses have been under written?


Answer
Often charities use the deductable portion of a ticket price as a promotion for their event. “100% of the ticket price is deductable” This statement is false and in reality is not for a charity to determine. Instead the NPO should determine the fair market value of the evening. This has nothing to do with what it cost to stage the event. NPO’s are often reluctant to disclose the value of food, liquor, entertainment but the benefits that the ticket purchaser receives by participating in the event are the “fair market value.” The balance of the ticket price is the deductable amount

I was involved in a Charity ball that cost every penny of the ticket price to put on the dinner. This caused a lot of discussion. The individuals were purchasing a $250 and were also receiving $225 in amenities at the event. This is not to say the NPO did not raise money. We did in fact raise $100,000. this was realized through sponsorships and donated services.