Changes were made to the Federal Internal Revenue Code in 1993 so that beginning January 1, 1994, no deduction will be allowed under Section 170 of the Internal Revenue Code for any charitable contribution of $250 or more unless the donor has received from the donee organization a written acknowledgment. This requirement applies to contributions made to UW Madison and processed as gifts to fund 133 or fund 161 accounts.

The responsibility for obtaining the substantiation, according to the Internal Revenue Code, lies with the donor. However, it is University policy and a good business practice for the University to acknowledge receipt of all gifts. The responsibility for acknowledgement remains with the unit receiving the gift. The following language should be included in all acknowledgments for all gifts of $250 or more.

According to the information we have available at this time, you made a gift of $____.

Unless otherwise stated on this receipt, you either received no goods and services in exchange for this contribution or the value of any goods and services received falls within the definition of "low cost articles" under section 513(h)(2) of the Internal Revenue Service Code.

Examples of low cost articles include bookmarks, key chains, and other items that contain the charity's symbol or logo.

The acknowledgment must be obtained by the donor no later than the date the donor files a return for the tax year in which the contribution was made. The acknowledgment format can be a letter, postcard, computer generated or other forms etc.

Also, beginning January 1, 1994 under Section 6115 of the Internal Revenue Code, when an individual making a charitable contribution in excess of $75 receives any goods or services in exchange for that gift, described as a "quid pro quo" (something for something) contribution, the University recipient must provide an acknowledgment that informs the donor of the amount of the original gift, a brief description of any goods and/or services provided by the University, the value of those goods and/or services and a net deductible contribution amount. The following language should be included in the gift acknowledgment letter in place of the language above if quid pro quo is relevant:

According to the information we have available at this time, you made a gift $____ and received goods and/or services briefly described as ______. The value of those goods and/or services has been determined to be $____. Thus your net deductible contribution is $____.

If you have any questions contact Robert Andresen, Assistant Director at 608-262-2896.