Fundraising Rules: Receipts, Raffles, Online Giving and Restricted Gifts

Most fundraising trouble for small groups is not fraud. It is a gala ticket with no disclosure statement, a (c)(4) letter that implies gifts are deductible, a raffle with a $2,500 cash prize, or a grant for a trail map that quietly paid the rent. Each has a clear rule. This lesson collects the federal tax rules that apply to every exempt group, then the Idaho rules: the solicitation act, gaming law and the law on restricted gifts. For which status you are fundraising under, see lesson 5; for sales tax on items you sell and Idaho tax on business income, see lesson 8. Money raised to support or oppose candidates or ballot measures is campaign money with its own Idaho reporting rules, covered in Who Can Give, and How Much and lesson 9.

Receipts: the $250 acknowledgment rule

The rule lives in IRC 170(f)(8) and is explained in IRS Publication 1771. A donor cannot claim a deduction for any single contribution of $250 or more, cash or property, without a contemporaneous written acknowledgment from the charity. The duty is technically the donor's, but Publication 1771 says a charity "must assist a donor" by providing one, and a donor without it loses the deduction even if the gift was real.

"Contemporaneous" means the donor has it by the earlier of the date the donor files the return for that year or the return's due date, including extensions. Charities typically send acknowledgments by January 31 of the next year. The acknowledgment must include:

• the charity's name;
• the amount of cash, or a description (not a value) of property given;
• a statement of whether the charity provided any goods or services in return; and
• if it did, a description and good faith estimate of their value, or a statement that only intangible religious benefits were given.

There is no IRS form. One annual summary may cover several gifts. Separate gifts under $250 are not added together, so a donor who gives $50 a month needs bank records, not a $250 acknowledgment, though sending an annual summary costs nothing and builds loyalty. Payroll deductions of $250 or more each count as separate gifts. A volunteer who spends $250 or more of her own money on the group's work, say on supplies, needs an acknowledgment describing the services, because unreimbursed expenses count as gifts.

Quid pro quo: when the donor gets something back

When a donor pays more than $75 and gets goods or services in return, the payment is a quid pro quo contribution under IRC 6115. The charity must give a written statement, at solicitation or when it receives the payment, that tells the donor the deductible amount is limited to what was paid over the value of what was received, and gives a good faith estimate of that value. Publication 1771 warns that small print buried in a longer document may not count. The penalty for failing is $10 per contribution, up to $5,000 per fundraising event or mailing, unless the charity shows reasonable cause (IRC 6714).

Not every thank-you gift counts. The token and membership exceptions let a charity disregard small benefits:

Rule	Threshold	Source
Written acknowledgment required	Any single gift of $250 or more	IRC 170(f)(8); Pub. 1771
Quid pro quo disclosure required	Payment over $75 that is partly for goods or services	IRC 6115; Pub. 1771
Penalty for missing disclosure	$10 per contribution, up to $5,000 per event or mailing	IRC 6714
Token exception, 2026: benefit value test	Benefit worth no more than 2 percent of the payment or $139, whichever is less	Rev. Proc. 2025-32
Token exception, 2026: logo items	Payment of at least $69.50 and logo items costing $13.90 or less in total	Rev. Proc. 2025-32
Low-cost article, 2026	Items costing $13.90 or less	Rev. Proc. 2025-32; IRC 513(h)
Membership benefits exception	Annual payment of $75 or less for recurring rights like free admission or member discounts	Pub. 1771
Nondeductibility notice for non-charities	Gross receipts normally over $100,000	IRC 6113

The token amounts are adjusted for inflation every year; Publication 1771's printed figures are for 2023, and Rev. Proc. 2025-32, section 3.33, sets the 2026 numbers shown here. For token benefits to be disregarded, the payment must be part of a fundraising campaign in which the charity tells donors how much is deductible.

Noncash gifts

Donated goods follow their own paperwork. The charity describes; the donor values. Under the Form 8283 instructions, a donor claiming more than $500 for noncash gifts files Form 8283 with the return. For items or groups of similar items claimed at more than $5,000, the donor generally needs a qualified appraisal, and the charity signs Section B of the donor's Form 8283 to acknowledge receipt. Publicly traded securities are an exception to the appraisal rule. Signing is not agreeing with the value; it confirms the charity got the property.

Signing Section B creates a duty for the charity. If it sells, exchanges or otherwise disposes of that property within three years of receiving it, it must file Form 8282 with the IRS within 125 days after the disposition and give the donor a copy, with an exception for items worth $500 or less. A raffle prize or auction item that came in as a large gift is a common trigger. Publication 1771 points to separate rules when a donor claims more than $500 for a donated car, boat or airplane.

The (c)(4) solicitation notice

Donors to social welfare groups, trade associations and political organizations get no charitable deduction, and the law requires those groups to say so. Under IRC 6113, each fundraising solicitation by a 501(c) group that is not eligible for deductible gifts, or by a 527, must contain "an express statement (in a conspicuous and easily recognizable format)" that contributions are not deductible as charitable contributions for federal income tax purposes. The IRS's solicitation notice page adds that a fundraising solicitation is any request for gifts in written or printed form, by television, radio or telephone, but not a letter or call that is not part of a coordinated campaign soliciting more than 10 people in a calendar year. Notice 88-120 gives safe harbor formats.

Two limits matter in practice. The rule does not apply to an organization whose gross receipts are normally not more than $100,000 a year, though the IRS may treat related groups as one to stop splitting. And the penalty under IRC 6710 is $1,000 for each day a failure occurs, capped at $10,000 a year, with no cap and a higher amount where the failure is due to intentional disregard. Websites and emails are written solicitations; put the line on the donate page, not only on paper.

Idaho's Charitable Solicitation Act

Many states make charities register and file annual financial reports before they ask anyone for money. Idaho does not. The Idaho Charitable Solicitation Act, Title 48, Chapter 12, enacted in 1993, is a conduct statute with no registration, no financial filing and no limit on fundraising costs. The Attorney General's July 2026 board manual reminds charities that other states' registration laws may apply if they raise money outside Idaho, and it says paying a fundraiser a percentage of funds raised, while "generally considered unethical," is not illegal in Idaho.

What the act does cover is broad:

• A charitable organization under 48-1202 includes any IRS-recognized 501(c)(3) and anyone who holds itself out as established for a benevolent, educational, philanthropic, humane, scientific, patriotic, "social welfare or advocacy," public health, environmental, civic or veteran purpose, or for the benefit of police, firefighters and other public safety workers, plus anyone who engages in a charitable solicitation. An unincorporated advocacy group and a (c)(4) are both inside it.
• A charitable solicitation is any oral or written request, direct or indirect, for money, credit, property or other value on the representation that it will be used for a charitable purpose. No gift has to be made for a solicitation to have happened. That language reaches online donate buttons and crowdfunding pages.
• Section 48-1203 makes it unlawful for anyone, except a religious organization, to use any "unfair, false, deceptive, misleading or unconscionable act or practice" in planning, conducting or carrying out a solicitation, judged by Idaho Consumer Protection Act standards. Religious corporations, associations, schools and societies are held to a narrower standard: knowingly and willfully using a false, deceptive or misleading practice.
• Collection containers that offer a product for sale in a public place need a disclosure label stating the share paid to collectors and the share that reaches the charitable purpose, unless the container takes in under $100 a year, the charity raises under $500 a year, or 100 percent of receipts go to the charity.

Enforcement runs through the Consumer Protection Act. Under 48-1204, the Attorney General and the district courts have the same powers they have under Title 48, Chapter 6, which under Idaho Code 48-606 include injunctions, restitution and civil penalties of up to $5,000 per violation. Donors harmed by a deceptive solicitation have a private right of action with the same remedies (48-1205), which must be brought within two years after they knew or should have known of the violation (48-1206).

Idaho has used these tools against national schemes. In May 2015 the Attorney General joined a federal lawsuit against four cancer charities accused of taking in more than $187 million nationwide, Boise State Public Radio reported. Idahoans had given more than $134,000 to one of them and more than $322,000 to another; settlements required those two to dissolve. The Attorney General said most of the money "was used for the benefit of the individuals and their families" who ran them.

Raffles, bingo and other games of chance

Idaho's constitution starts from a ban. Article III, Section 20 says gambling "is contrary to public policy and is strictly prohibited," with three exceptions: the state lottery, pari-mutuel betting, and "bingo and raffle games that are operated by qualified charitable organizations in the pursuit of charitable purposes if conducted in conformity with enabling legislation." The enabling legislation is Title 67, Chapter 77, administered by the Idaho State Lottery. A raffle that follows it is not gambling under the criminal code; one that does not can be.

Who may hold one. Under 67-7702 an organization qualifies in one of two ways. A "charitable organization" has been in continuous existence in the county where the game is held for at least one year, conducts charitable activities, is exempt under section 501(c)(3), (c)(4), (c)(6), (c)(8), (c)(10), (c)(19) or 501(d), and is exempt from Idaho income tax. A "nonprofit organization" is one incorporated under Title 30, Chapter 30. The Lottery's guidance documents say both kinds need a year of existence in the county, proven by bylaws, bank statements, minutes or board lists, and state that "Political organizations, including PACs, do not qualify." Businesses and individuals may not run raffles even for a good cause.

Raffle rule	Requirement	Idaho Code
Number of drawings	No more than 12 per organization per year (schools exempt)	67-7710(2)
Where drawn	In Idaho	67-7710(2)
Cash prizes	Up to $1,000 in aggregate per raffle; no cap on non-cash merchandise	67-7710(2)
Use of proceeds	At least 80 percent of net proceeds (gross receipts minus cost of prizes) to charitable purposes	67-7710(3)
License needed	When the aggregate value of merchandise prizes exceeds $5,000 (bingo: gross annual sales of $10,000 or more)	67-7713
License fee	$100 for new organizations and those with $25,000 or less in gaming revenue; $200 up to $75,000; $300 above	67-7712
Annual statement	Licensed groups file a year-end raffle statement with the Lottery; audit by an Idaho CPA if raffle revenue exceeds $200,000	67-7710(4), (5)
Records	Keep the accounting of revenues and disbursements five years	67-7710(4)(g)
Who runs it	The governing board is responsible; no pay to officers, directors or their close relatives from proceeds; no contracting out the raffle	67-7711(3)
Penalties	Civil penalty up to $10,000 per violation; knowing violations may be charged under the gambling laws	67-7710(1)

The Lottery's guidance adds practical rules. A raffle runs from the first ticket sale to the drawing and may not last longer than a year. Unlicensed raffles must follow the same rules as licensed ones. Donated prizes are not recorded as prize costs on the annual report. Casino nights are not a charitable exception: the Lottery says casino-style games may be played for entertainment only, so a group must either drop the charge to play (and say "No Purchase Necessary") or drop the prizes. A drawing where anyone can get a free entry without buying anything is not a raffle at all, and any person or business may hold one. On online ticket sales, the Lottery's guidance does not say Idaho law allows or bans them, and warns that selling tickets online may conflict with the federal Unlawful Internet Gambling Enforcement Act of 2006 or the Interstate Wire Act of 1961, pointing groups to the U.S. Department of Justice for an answer.

Online giving and crowdfunding

Every rule above applies online. A donate button is a "charitable solicitation" under Idaho law, a (c)(4)'s email appeal needs its 6113 notice, and an online ticket over $75 needs the quid pro quo statement on the checkout page or the confirmation email. What changes online is who is holding the money.

• Your own donate page through a payment processor. The gift is to your organization. The processor takes a fee and deposits the rest. You send the acknowledgment. Make sure the account is in the organization's name and EIN.
• A crowdfunding campaign run by your group. Same as above if the money goes to the organization's account. Check whether the platform describes gifts as deductible and whether it issues its own receipts.
• A campaign a supporter runs for your cause. If the money goes to the individual first, the donors gave to that person, not to you, and generally get no charitable deduction. The IRS's 2024 crowdfunding fact sheet says the platform or its processor may report distributions on Form 1099-K, that whether they are income depends on the facts, and that organizers and recipients should keep records for at least three years. Ask supporters to send donors to your own page instead.
• Raffles online. See the Lottery guidance above before selling tickets on a website.

The 1099-K reporting thresholds have changed several times since 2021; check the IRS's current Form 1099-K page rather than relying on an older figure.

Grants and restricted gifts

A gift with a string on it is a promise. The Attorney General's board manual puts it simply: donors may designate a purpose, and if the charity accepts the gift, it "must comply with the donor's instructions." The Idaho Charitable Assets Protection Act makes it unlawful under 48-1906(1)(b) to knowingly use charitable assets inconsistently with "the restrictions contained in a gift instrument," with the remedies described in lesson 6. The Twin Falls YMCA matter in that lesson began with restricted gifts used for general operations.

Restrictions can be changed, but not by the board alone. Under Idaho's Uniform Prudent Management of Institutional Funds Act, Idaho Code 33-5006, an institution may release or modify a restriction if the donor consents in a record, and never for a non-charitable purpose. Without consent, a court may modify a restriction that has become impracticable, wasteful or impossible, after notice to the Attorney General. For small, old funds there is a shortcut: if a restricted fund is worth less than $25,000 and more than 10 years have passed since it was set up, the institution may release or modify a restriction it finds unlawful, impracticable, impossible or wasteful 60 days after notifying the Attorney General and the donor if available, as long as it uses the money consistently with the gift's charitable purposes.

Grants come with contracts. Read the grant agreement for allowed uses, reporting dates, rules on lobbying and political activity, and what happens to unspent money. A private foundation grant to a public charity usually bars the use of grant money for lobbying, and a grant to a (c)(4) requires the foundation to exercise expenditure responsibility, with reports you will have to supply (lesson 5).

When fundraising income is taxable: UBIT

Exempt groups can owe income tax on business income. The IRS's UBIT page defines unrelated business income as income from a trade or business, regularly carried on, that is not substantially related to the exempt purpose. An organization with $1,000 or more of gross income from an unrelated business must file Form 990-T, in addition to its regular 990, and must pay estimated tax if it expects to owe $500 or more.

Much ordinary fundraising is outside the tax. IRC 513(a) excludes a business in which substantially all the work is done by unpaid volunteers, a business carried on by a (c)(3) primarily for the convenience of its members, students, patients, officers or employees, and the sale of merchandise substantially all of which was donated, which covers most thrift stores and rummage sales. A once-a-year event is usually not "regularly carried on." Distributing low-cost articles (2026: $13.90 or less) with a solicitation is not a business either. Where groups get caught: a year-round advertising program in a newsletter, a store selling purchased goods unrelated to the mission, renting space to for-profit tenants on terms that create debt-financed income, or a paid staff running a regular commercial service. Idaho taxes unrelated business income on its own form, covered in lesson 8.