Making a Gift to Hanna Center Events from a Donor-Advised Fund or IRA

Making a Gift to Hanna Center Events from a Donor-Advised Fund or IRA

Thank you for considering a gift to Hanna Center in connection with one of our events. Donor-advised funds (DAFs) and IRA Qualified Charitable Distributions (QCDs) are wonderful, tax-advantaged ways to support our mission—but the IRS places specific rules on how they can be used when an event, ticket, or sponsorship benefit is involved. Here’s what to know, and several ways to combine a DAF or QCD gift with your own attendance.

Can a DAF or IRA QCD support a fundraising event?

Yes—a grant from your DAF or a distribution from your IRA can support a Hanna Center event, but only if you decline all benefits associated with the gift (tickets, meals, or gifts) before the grant or distribution is made.

The rule to know: no “bifurcated” gifts

The IRS does not allow a single ticket or sponsorship to be split into a tax-deductible portion (paid by DAF or QCD) and a non-deductible portion (paid personally)—a practice known as bifurcation. Even if you pay the fair-market-value portion of a ticket yourself, using DAF or QCD funds for the remainder isn’t permitted. Event tickets, meals, and similar perks are treated as “more than incidental” benefits, and combining them with a DAF or QCD gift can trigger excise taxes on the donor under IRC Section 4967.

Ways you can combine a DAF or QCD gift with event support

  1. Sponsor and don’t attend. Recommend a DAF grant or IRA QCD for a sponsorship, and formally decline to attend, give your tickets to others, or accept any other benefit.
  2. Sponsor with your DAF/QCD, attend on your own ticket. Recommend the grant or distribution for the sponsorship itself, then separately purchase your own ticket with personal or business funds—at the same rate available to the public.
  3. Sponsor with your DAF/QCD, attend as someone else’s guest. If another donor has already purchased a full-price seat and invites you as their guest, your DAF or QCD sponsorship doesn’t need to cover any personal benefit.
  4. Sponsor a table, cover the seats separately. Pay for the table’s seats at the event’s lowest per-ticket rate from personal funds, and direct the remaining sponsorship amount from your DAF or QCD. For example, a $15,000 sponsorship that includes a table of 10 could be structured as $3,000 (10 tickets at $300 each) from personal funds and $12,000 from your DAF or IRA QCD.

What DAF or QCD funds cannot cover

  • Tickets to an event you plan to attend—even if you personally pay the non-deductible portion.
  • A sponsorship where you plan to accept the associated benefits.
  • Auction items.

Learn more

For more on the rules governing charitable contributions and event sponsorships, see IRS Publication 526 (Charitable Contributions), Publication 561 (Valuation of Donated Property), Publication 1771 (Acknowledgment of Charitable Contributions), Publications 4302 and 4303, along with IRS Notice 2017-73.

We’re glad to help you structure a gift that fits your goals. Contact Hanna Center’s giving team at [email protected] before the event, and please confirm with your DAF administrator or tax advisor that your planned gift is an allowable use of DAF or QCD funds.

This information is provided for general educational purposes and is not tax or legal advice.