Basic
Premiums are gifts and giveaways offered for various levels of donations. Similar to public radio stations during fundraising campaigns where a $100 contribution qualifies the patron to receive a tee shirt and $50 donation qualifies for a coffee cup. Premiums may be customized through the Build Premiums tab.
Premium Name
The name identifying the premium on the checkout page. Example: Tee shirt, coffee cup, CD, etc.
Donation Assignment
Select the donation item for which the premium is used. The premium entered will be added to the specific donation item in a pull down menu. In the following example, the "Cat in the Hat" hat is a premium offered for a $10 donation.
Premium Price Qualifier
Enter the minimum donation for which the patron will qualify for the premium. In the above example, the premium price qualifier is $10.
Tax Deductible Amount
Since the patron is receiving a tangible gift with value, the total donation may not qualify as a tax-deductible contribution. In the above example, the hat may have a price of $2 therefore; the total tax-deductible amount is $8.00. Enter the total tax-deductible portion of the donation if the premium item is accepted. The system will automatically calculate the value of the premium item and deduct it from all donations above $10. For example if a patron donates $100 and chooses the hat as the premium gift, the system will automatically calculate the tax-deductible portion as $98, considering the hat was valued at $2.00.
Token Value
Values assigned to premiums are discretionary and typically should be the fair market value of the offering. In the above example, the hat with a value of $2 changes the tax-deductible portion of a $10 donation to $8. However, what if the donation is $1,000 and the premium selected is the hat, valued at $2? In a case of a large donation, a premium with little value (small value) is considered a token item and may legally be assigned no value relative to the donation. The Token Value is the value at and above which 100% of donation is tax deductible. The following example further illustrates this term:
Premium Offering:
- Premium Name: "Cat in the Hat" hat
- Premium Price Qualifier: $10
- Tax-Deductible Amount: $8
- Token Value: $1000
Case 1:
- Patron donates $10
- Patron chooses no premium
- Tax-deductible portion: $10 (100%)
Case 2:
- Patron donates $100
- Patron chooses "Cat in Hat" hat
- Tax-deductible portion: $98
Case 3:
- Patron donations $2000
- Patron chooses "Cat in the Hat" hat
- Tax-deductible portion: $2000 (100% is deductible since the donation is above the Token Value)