Some, all, or none of the amount you pay to join a nonprofit organization may be deductible for Internal Revenue Service purposes. The determining factor is the amount of benefits you receive as the result of becoming a member and what those benefits are. A nonprofit organization often sends out information that clarifies which portion of your membership dues is deductible, but IRS regulations also can be used to come up with the numbers.
The IRS doesn't allow you to deduct membership dues paid to a country club or similar social organization, which generally aren't considered qualified organizations under IRS guidelines even if they are nonprofits. Membership in athletic clubs, airline clubs, hotel clubs and eating clubs likewise is not deductible. The IRS also considers certain nonprofit memberships to be business expenses rather than charitable deductions if the primary purpose of the organization is professional development. For example, the American Institute of Certified Public Accountants advises its members that the portion of membership dues that can be deducted is a business expense.
Determine Value of Benefits
As a general rule, you subtract the value of the benefits you receive as the result of membership from the cost of joining. One common benefit that falls into this category is the right to purchase athletic tickets. If you donate money to join a college athletic booster club and therefore earn the right to buy tickets, you can deduct just 80 percent of your membership fee, according to IRS rules. If joining an arts organization brings you something of value, like a sweatshirt or framed poster, the organization should disclose the value associated with that item, and you won't be able to deduct that amount.
If the membership dues are less than $75, the IRS allows you to disregard several types of benefits when determining the deductible amount. Free or discounted admission to the organization's facilities, free or discounted parking, preferred access to goods and services and discount offers to purchase goods and services all can be ignored in those cases. You also don't have to reduce your deduction if you receive merely a small item or benefit of token value for joining. "Token value," in this case, depends on how much the item costs the organization to acquire and the membership fee. Anything less than $5 is OK, as long as the membership dues are at least $25.
Higher Membership Dues
More expensive membership fees may still be deductible if the amount is clearly out of proportion to the benefits the member receives. This may be found in nonprofits like museums or symphonies that have tiered membership levels at rising dollar values but without a significant distinction in the benefits for those who give higher amounts. If the benefits for giving $5,000 aren't appreciably greater than for those giving $500 -- for example, if the only difference is being listed in a higher tier of donors -- the difference between the two amounts likely would be considered deductible.
- IRS.gov: Publication 526 -- Main Content
- New Jersey Center for Non-Profits: IRS Gift Substantiation and Disclosure Requirements
- Nolo.com: Is Your Nonprofit Overpromising Tax Deductions?
- National Park Service: Membership Programs
- AICPA: Membership Dues -- Tax Deduction
- Nolo: Deducting Dues and Subscriptions
- IRS.gov: Internal Revenue Manual -- Examining Process