Can a non profit deduct tranaction fees from my gift?

[scottyisaboomer]

I give to many charities via credit card and PayPal?  Usually, what I gift, I get a receipt from that charity for the full amount of the gift.  Last year I had a charity that I gifted $5000 via Paypal deduct the transaction fees from my gift and gave me a receipt for that deducted amount, rather than the full $5k.  Can they do that?

[tygrtchr · Accepted solution]

You are only allowed to deduct the amount that the charity actually RECEIVED.  If you went through Paypal,the charity did not receive the Paypal fee. 

[scottyisaboomer]

I think you misunderstood the question.  I gave $5k to stated charity via PayPal.  They may have their PayPal account goofed up or something, but PayPal charged them approx $150 in fees.  When I filled my taxes, I claimed the the whole $5k gift as a deduction.  The tax receipt the charity sent me was not for 5k, but rather 5k minus that PayPal fee, so basically $4850.  Can they do that?  No other charity has ever done that.

[ScruffyCurmudgeon]

If you paid through PayPal, see the attached to understand that the charitable organization lost $145.30 in the transaction to PayPal fees that happened solely because of your choice to use PayPal as opposed to a bank billpay function or a credit card or a check or a charity-initiated ACH withdrawal.

[scottyisaboomer]

That still doesn't answer my question if the charity can give me a receipt less the service charge.  As I stated, I have given to other charities via PayPal and I still get a giving receipt for the full amount of the gift.

[ScruffyCurmudgeon]

By Law, the charity can only report as a charitable deduction the value that they received.
For small donations, perhaps a charity might ignore the small fee imposed (on a small donation) but seriously - $150 cannot be ignored and be reported as if it was received.

[ScruffyCurmudgeon]

Just curious - if you were going to make a large donation, why not do it with appreciated stock or other investment assets, so that you receive full value of the donation but do not pay capital gains?

[tygrtchr]

Paypal is changing a lot.  If you give to a charity or person (not paying an invoice, etc.) the charity should get the full refund.  It is possible that the donation you made went through Paypal as payment for a service or something like that.  I'd call Paypal and explain this to them.  I would ask that the Paypal fee (.029% + $.30) either be refunded to you or given to the charity that you donated to in the first place.  Make sure you get the receipt for the fees if they were credited to the charity.