Tax Issues | Alumni Association of the University of Michigan                            

Generally, if a donor receives any benefit in return for his/her donation, only the difference between the payment and the fair market value (FMV) of the benefit is tax deductible. (For example, if a donor pays $50 to attend a charitable dinner, which entitles the donor to a meal valued at $20, only $30 is deductible). If the benefits received are deemed "insubstantial" by IRS guidelines, however, the entire amount of the payment may be deducted. For more information, please see the IRS's substantiation and disclosure requirements (.pdf).