At best, charitable donations to a qualified charity are only 50% deductible. You're better off forgetting about that angle. Instead, take your normal business expense deductions which are 100% deductible as a business expense, and just "give" the finished product to the NPO. Overall, the transaction will show a loss since without them paying you for it, there will be no profit on this one specific transaction.
You could also just charge them your actual costs to produce the end product and break even with no loss or gain, but at a considerable savings to the NPO.
No matter what you do:
- you still have to pay your employees.
_ you still have to pay for the utilities consumed in producing the product (like electricity)
- you still have to pay for the materials used in the production of the product (such as the video tape)
Claim those costs as a donation, and it's 50% deductible.
Claim those costs as an actual valid business expense (which is exactly what they are), and they're 100% deductible.
