Tax-exempt organizations frequently grapple with how to report fundraising events on Form 990. The form requires them to separate event proceeds into two categories: contributions and other event receipts. However, for internal reporting, many organizations include contributions as part of their total event proceeds. This discrepancy can create a disconnect between internal records and Form 990 reporting, often leading to fundraising events appearing less profitable than expected. This article will clarify the proper reporting of fundraising events on Form 990, helping organizations bridge the gap between internal and external financial statements.

Form 990, Part VIII Statement of Revenue, reports fundraising event income components on lines 1 and line 8. Line 8a reports gross income not including contributions, which are reported on line 1c, labeled income from fundraising events. Breaking out donor contribution amounts on line 1c is an important distinction. Line 8a should only be income from fundraising events that represent the value of goods or services received. The direct expenses associated with the events are reported on line 8b, with the net income (loss) reported on line 8c.

If total fundraising income exceeds $15,000, Schedule G Part II is also required. Schedule G will disclose the top two fundraising events in the same manner as outlined above, as well as report the total of all other fundraising events. The total of all events reported on Schedule G will match Form 990, Part VIII reporting.

A Practical Example: Golf Scramble Event Finances

Player Contributions

• Entrance Fee (per player): $200
• Fair Market Value of Services Provided: $125 (Includes lunch, green fees, and cart fees)
• Donation Amount (per player): $75 (Difference between entrance fee and fair market value)

🚨 Note: The donation amount should match donor letters stating the fair market value of goods and services received is $125.

Event Financials

• Total Players: 40
• Expenses:
  • Course Fees: $4,000
  • Advertising: $1,200
  • Catering: $1,500
• Sponsorship Secured: $5,000
  • Includes 4 sponsored spots
  • These 4 spots are part of the total 40 players

The following summarizes the organization’s internal reports, along with Form 990 reporting:

At first glance, it may appear to the reader the fundraiser reported an overall loss. However, on line 8a, there is a parenthetical note of the total contributions from fundraising events reported on line 1c. The reader can then easily see what portion of the fundraiser(s) were included in Line 1c, contributions from fundraising events.

While the way Form 990 and Schedule G present financials may initially raise concerns about fundraiser profitability, experienced users of Form 990 can leverage its data to effectively communicate an organization’s fundraising success. By highlighting both contributions and event proceeds, they can provide a more complete picture of the impact of key fundraising events.

Want to ensure your organization is maximizing its fundraising impact while staying compliant with Form 990 reporting? The Blue Not-For-Profit team is here to help! Reach out to us today for expert guidance and personalized support.