February 8, 2016

As tax filing season approaches, donors should make sure that they have the proper substantiation to support all of their charitable deductions. As explained in this industry alert, donors who incur expenses connected with their volunteer service activities may need an acknowledgement from the charity to properly deduct such expenses.


When an organization receives donated services, it may not typically provide an “acknowledgment” letter to the donor, as donated services are generally non-deductible. However, if the donor incurs any out-of-pocket expenses that are directly related to the donated services (e.g. mileage, air fare, and meals), these expenses are deductible.

These expenses are often incurred by Board members, who incur travel expenses to attend Board or Committee meetings. If the out-of-pocket expenses exceed $250, the donor needs to obtain substantiation from the charity in order to deduct these expenses as a charitable contribution. These expenditures are deductible if:

  1. the donor has records that substantiate the amount of the expenses; and
  2. by the appropriate date (the date the return is filed or the due date of the return), the donor obtains from the charitable organization an acknowledgement that contains the following:

a. description of the services provided;
b. a statement of whether or not the recipient charity provided any goods or services for performance of the services. If the charity provided services in exchange, the charity’s acknowledgement would be required to provide a good faith estimate of the value of the services received by the donor.