Guidelines for Conducting Donor-Initiated Fundraising Events

What is a Donor-Initiated Fundraising Event?

Fundraising that is undertaken by third parties (referred to as "initiators") who are individuals or groups who are neither staff nor board members of Special Olympics Massachusetts, where the event is held for the purpose of raising funds to benefit SOMA.

Issues of Compliance:

When initiators undertake fundraising activities/solicitations for these events, for charitable tax deduction purposes, such fundraising is being done on behalf of Special Olympics Massachusetts. It is important that all activities be conducted in compliance with federal and state regulations regarding charitable organizations. Such activities/solicitations are to be conducted under the observation and fiscal guidance of Special Olympics Massachusetts. This is for the protection of donors, the initiators, and SOMA from the possible ramifications of non-compliance.

Approval of Activities/Events:

Before undertaking any public fundraising activity/event, initiators should contact SOMA's Development Office to define the solicitation, event, or other endeavor to raise funds. The initiators should submit a proposal and obtain written approval from the Development Office prior to instituting any fundraising activity.

All uses of the Special Olympics Massachusetts name and/or logo in any advertising or promotion must be approved by the Development Office in writing at least 60 days in advance of the event.

All fundraising materials should make clear, where applicable, that funds are being raised on behalf of rather than by Special Olympics Massachusetts.

If administrative or support services need to be provided by the Development staff, an agreement must be prepared in advance of launching the event defining roles and expectations of both Special Olympics Massachusetts and the initiators.

Responsibilities of Special Olympics Massachusetts are:

* Permission in writing to use Special Olympics Massachusetts' name and logo for event promotion in prescribed ways.

* Review and approve in writing all event related press and advertising Acceptance of raised funds by the initiators.

* Use of funds raised for the purpose promoted and designated by the initiators, if approved by the Special Olympics Massachusetts prior to raising funds for the event.

* Provision of appropriate acknowledgments to donors and initiators.

Responsibilities of the Initiators:

* Secure all required permissions from Special Olympics Massachusetts regarding holding the event, use of logo and media materials.

* Assumption of responsibility for all public fundraising activities/events and matters related to them which generally include payment of all costs and expenses, safety of participants, compliance with applicable regulations (including charitable gaming laws), reporting, and other requirements of every kind such as licensing and liability insurance covering the initiators and Special Olympics Massachusetts.

* Security, management and accounting of money and property accepted from donors and other contributors and sources.

Budgeting and Payment of Expenses:

The initiators will be responsible for all expenses, and will maintain appropriate financial controls and records related to fundraising activities.

Additional Initiator Responsibilities:

* Request SOMA establish a initiator designed account for all revenues

* Establish a budget of estimated expenses and revenue for submission to SOMA prior to incurring any expense or beginning any fundraising activities.

* Request reimbursement of appropriate expenses, as reflected in the event budget, from the designated account. Written requests include copies of receipts and invoices, following the event to assure proper financial management.

Designation of Checks and Receipt of Cash:

All contribution checks should be made payable to Special Olympics Massachusetts indicating the initiator's event and date. If contributions are not mailed directly by donors to Special Olympics Massachusetts, all proceeds, checks and cash should be delivered to SOMA along with a full accounting within one week after an event or other collection activity. Cash proceeds are to be deposited in full into the designated account, and not used to pay any expenses.

Tax Requirements and Acknowledgments:

The IRS has strict requirements regarding charitable fundraising. If the steps outlined below are not followed, donors can be denied tax deduction eligibility for their gift. The initiators might find themselves subject to tax on the funds they have raised, and either the initiators or SOMA might be subject to penalty and could put it in jeopardy of its non-profit status.

Donors who contribute $250 or more will need a written acknowledgment from Special Olympics Massachusetts in order to claim a tax deduction for the contribution. SOMA will provide the appropriate acknowledgment to the donor, but will require the detailed information listed below in order to do so.

Initiators will need to provide:

* Donor's complete name and address;

* Date and amount of the contribution;

* Whether the contribution was cash, in-kind services or property;

* Description of the type of property and a good faith estimate of the fair market value, and;

* Detailed description of any goods and services provided in exchange for the contribution.

If the initiators provide goods and/or services in exchange for a donation, certain disclosures are required to be made upon solicitation. For example, if the fund raisers are holding a dinner, the donor can only deduct the excess of the ticket price above the fair market value of the dinner. This "quid pro quo disclosure" must be made at the time of solicitation. When determining the proportion of a ticket price that may be tax-deductible, SOMA must have complete records from the initiators of all expenses, including the value of all goods and services received by attendees at the event. SOMA will work with the initiators to help determine the fair market value amounts and the appropriate disclosure language, but the initiators are to be certain that all necessary disclosures have been made.

In the case of solicitation letters or other fundraising materials disseminated, it is required that the following language appear, "Information concerning this charitable solicitation is filed with the Attorney General of the Commonwealth of Massachusetts and may be obtained by calling (617) 727-2200. Registration with the Attorney General does not imply endorsement."

Initiators should note:

* Raffles are regulated by the Commonwealth of Massachusetts under its rules and can only be run by non-profit organizations which are registered and licensed for the specific raffle in question. No raffle should be undertaken without assurance from SOMA that proper registration and licensing has been taken care of. Purchases of raffle tickets are not tax-deductible.

* Rummage Sale purchases are not tax-deductible

* Contributions of Services, while appreciated, are generally not tax-deductible

* Auctions are among the more complicated quid pro quo events to run and should be discussed with SOMA before any event plans begin.

Liability Insurance and Liability for Losses:

The initiators should contact the SOMA Development Office prior to planning a fundraising event to assess the need to secure liability insurance for the initiators and for SOMA. Insurance coverage must be reviewed and approved by SOMA.

The initiators are responsible for all losses incurred by events. SOMA will not be held responsible for such losses.

For more information please contact:

SOMA Vice President of Marketing and Development, Jay McGovern at 978-774-1501 ext 230 or via e-mail .