When a donor gives more than $75 and gets something back, the donee
(i.e., museum) is supposed to assign a value to the benefit and inform
the donor.  Generally, free admission in exchange for a membership
payment does have a value.  However, in interpreting the law, the IRS
has granted relief under certain circumstances.

The IRS realizes that it can be difficult to value yearly free
admission, because some donors may use it a lot and some not at all.
Therefore, it has come up with the following formula:

If the donee gives free admission to donors who give $75 or LESS, then
it can disregard the value of the benefit of free admission for those
who give MORE than $75.  So if you give free admission to your $20
donor, you can disregard it when figuring the quid pro quo valuation for
the $200 donor.

The vast majority of museums offer free admission to members who pay $75
or less, so most of them can disregard it when figuring the valuation
for higher level donors.  However, for those who can't, the IRS allows
them to try to determine the average value of the donation; for example,
if you know how many free admissions you have in total annually, you can
divide it by your number of members to arrive at an average value.

Please note that this relief applies to unlimited free admission to the
institution, not free admission to a specific event.  In other words,
free admission to the planetarium show, or the Sunday concert, is an
easily valued tangible benefit, unlike a benefit that can be exercised
year-round.

More detailed information is available for a nominal fee through the AAM
bookstore ("Gifts of Property" has an addendum that includes the final
IRS regs on quid pro quo gifts).  Also, I'm happy to answer individual
questions to the best of my ability.

Andy Finch
AAM Government Affairs
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