I am posting this for a colleague who is not on Museum-L.  I will relay any
responses to him.  Thanks.
--John
[log in to unmask]


When a person makes a gift to one of our membership programs, we send a thank-you letter that documents the amount and date of the contribution. It also includes a (purposely vague) line about how the contribution is tax-deductible to the extent allowed by law. A member can deduct
the amount of the contribution minus the market value of any benefits he or she receives in exchange for the contribution. We've now been asked -- for the first time, surprisingly -- to provide documentation outlining the actual deductible amount of a member's contribution.

Our problem has been that we can't anticipate the value of the benefits someone might receive. The principal benefits (at least from this point of view) are discounts on workshops and in the museum shop. When a member makes a gift, I can't know what will be the value of such
benefits until the year ends, at which point we can, if we've tracked it, subtract the dollar value of the discounts received.

There are two problems with this, aside from the one of tracking the member's use of our services, which would be a bother. The first is that some, perhaps most, members expect the documentation of the deductible value of their gift when we acknowledge the gift -- not at the end of
the year. The second, more difficult problem, is that the membership year does not coincide with the tax year (the calendar year). So if I were to send statements outlining the value of benefits, how would I treat someone who, say, had a membership that renewed in December? I'd get,
say, $100 on Dec. 15. On Jan. 1, I'd send a statement showing, probably, that no discounts had been received -- because there would have been no workshops offered in which the person could have enrolled and the person is likely not to have made any purchases in the shop. Then,
during the next calendar year, the person or a member of his household might enroll in two or three workshops and make some number of purchases in the shop. The next December, I'd get another $100 as a renewal. I can scarcely deduct the value of the benefits received during most of
the year from a gift that I didn't receive until the end of the year. The benefits this person has enjoyed were the result of the previous year's gift, not the gift made during the tax year for which I'm reporting. And the gift received during the tax year for which I'm reporting
didn't arrive until after the benefits had been received, so they could scarcely be thought of as arising from that gift.

Some of this is a matter for out tax attorney, with whom we will consult. But before we do, I'd like to be sure I know the range of questions I need answered, and I'd like to know how other museums handle these problems.

*Do other museums track the benefits members are using and assign them dollar values? *Do they provide year-end statements to members? If they do, how do they ensure accuracy? (For example, if Jimmy Roberts enrolls in a workshop for 8-year-olds, how do I know to assign that benefit
to a membership listed as "the Roberts household," or to "Donald and Sherree Roberts"? What if Jimmy's name is Johnson but he's nevertheless a member of the Roberts household?) Must we ask members to provide the names of all members of their household, and must we remind them to use
the same names when enrolling in workshops or shopping at the museum?
*Do other museums assign membership numbers, as country clubs do, or do they have some other technique for ensuring that a member benefit awarded can be assigned to the correct membership?
*And how do other museums handle benefits during one year that arise from a gift made during a previous year?

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