Making sure donations to me are all tax-deductible from the donor's end

[rebmaboss]

I'll be working with a 501c3 organization (let's call it "Help South America") that does missionary work in South America.  For this work, I am completely a volunteer.  I receive no salary, food or housing as payment for my work, and no W-2 forms or 1099s are issued.  "Help SA" has been telling me "We can feed you and give you a room so that you don't have to cook or find your own apartment.  But you must pay us for the food and room.  We are not providing you these services as a reward for the volunteer work you do for us."  Thus, I'm raising support.  

I'm asking donors to send the money to "Help SA" and not to me.  I want to make sure my donors are making tax-deductible donations and not simply "gifts."  So, let's say a friend donates to "Help SA," who now has complete control over the funds from my friend.  (Thus, I cannot decide what my donor is paying for.)  Let's say that "Help SA" tells me "We know that one of your friends gave us this money.  We are deciding that this money will pay for your food and rent for this month.  You don't owe us anything out of your own pocket." 

My biggest question: Is my friend still eligible for a tax-deduction, or is the donated money considered a salary / gift to me?

And, is "Help SA" doing a legal thing with the gift they've received by providing me, a missionary, the food / room I would have otherwise had to pay for out of my own pocket?  How does "Help SA" (or I myself, as the case may be) need to report this to the IRS?

[rjs · Accepted solution]

It sounds fishy, and it sounds like you are twisting the facts to try to get around the tax laws.

How does "Help South America" know that a particular donor is a friend of yours? If they normally require volunteers to pay for their own food and housing, with no reimbursement, what makes them decide to cover that cost for a particular volunteer? It sure sounds like a donation directed to a particular individual. It doesn't pass the "smell test." I don't think your friend could claim a tax deduction for the donation.

However, a charitable organization can pay your travel expenses, including lodging and meals, when you are performing services for the organization. If they choose to do that, it's not a gift to you, and it's not income that you have to report. But the question here is what is making them decide to pay travel expenses for one particular volunteer, when their normal policy is not to pay or reimburse the expenses.

So the bottom line, as I see it, is that you don't have to report anything, but your friend cannot deduct the donation.

It's essentially a gift to you from your friend, passed through an organization. Gifts that you receive are not taxable to you, and you do not report them anywhere. Gift tax is the responsibility of the giver, not the recipient. But if someone gives you gifts totaling less than $16,000 for the year, they do not have to file a gift tax return or pay any gift tax.