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Our 501(c)(3) is creating a new website and one of our donors has offered to pay the final payment. Can he pay the company directly, and, if so, can we give him a receipt for an in-kind donation for the amount he paid on the nonprofit’s behalf?
Obviously, the donor may make the payment. The question is whether he can claim a charitable contribution deduction for the payment, and the answer is yes. A donor may claim a charitable contribution deduction for a gift “to or for the use of” a charitable organization, and it is not unusual for a donor to make a payment directly to a vendor to pay for goods or services used by a charity.
You should provide an acknowledgment that he made the payment to the vendor on your behalf. (It is a payment and not an in-kind donation.) You should also state whether he received any goods or services in return, and, if so, the value of such goods or services.
He could also give a check to you and you could use the money to pay the vendor. That is a more usual way to do it, but either method will work.
11/24/2009
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