Is this a donation?
No. A donation is something that if not donated, you would be taxed on.
Or Just reduced capitol gain?
Yes, that's exactly what it is. But if you're thinking of selling for say $100,000 and returning $20K as a donation, it doesn't work the way you think.
When you donate to a qualified charity, it's either a 50% charity or a 30% charity. That means if you donate to a qualified 50% charity, then only 50% of what you donate is tax deductible.
So if you sell the property for the original $100K and then "donate" 20K back to the organization, at best only 50% of that $20K is actually deductible. It could be even less too, depending on your specific and explicit circumstances. No two situations are hardly ever alike.
For this to actually be viable, you'd have to sell the property for the original price and actually receive the money. Then you would write a completely separate check to the organization for your donation, and a receipt would be required because of the large amount. (It exceeds $500).
