Also see instructions for Low Cost Fund Raisers - events that qualify for abbreviated reporting/tracking due to the small amount of money paid by the participants.
Auctions, other than qualifying low-cost fund raisers, must be fully reported on an Auction Report (Attachment Au), with the total received noted on line 1d of the C-3.
The ORCA software makes reporting auctions very easy: After the auction is held, enter each auction item, contributor information for each item’s donor and buyer, the item’s fair market value and sales price. Based on this information, the software determines who contributed the auction’s proceeds. (When a donated item sells for its fair market value or less, the amount the item sells for is contributed by the item’s donor. When an item sells for more than its fair market value, the item’s fair market value is a contribution from the item’s donor and the excess is a contribution from the item’s buyer.)
Preparation is the key to simplifying the reporting of auctions.
Pre-auction: Make a list of the donated items. You’ll need a brief description of each item and its fair market value along with the donor’s name, address, and occupation/employer information if the donor is an individual.
During the auction: Keep track of who buys each item and the winning bid amount. You’ll need the bidder’s name, address, and occupation/employer information if the bidder is an individual.
Proceeds from a fund raiser are contributions from the participants. The purchaser of tickets is the contributor, even when the tickers are given to others. Committees must track of how much each person attending a fund raiser donates and report these itemized contributions on the C-3 report. (See Record Keeping)
It occasionally happens that the committee is unable to determine the source of a contribution received at a fund raiser. Committees may keep anonymous contributions up to $300 or 1% of the total contributions, whichever is greater. See Anonymous Contributions for more information.
"Consumables" includes food, beverages, preparation, catering, entertainment furnished at the event, and other staging costs.
The law permits that the amount of a contribution received in connection with a fund raising event (such as a dinner) may be reduced by the cost of the food, beverages, preparation, catering or entertainment furnished at the event and, arguably, consumed by the contributor.
If you choose to do this, some special bookkeeping techniques are necessary and you'll probably want to set up a subsidiary set of records for the event.
You have to determine the per person amount to be deducted in order to deduct the cost of consumables from each contribution received. To do this, add up all the separate charges for food, beverages, preparation, catering, entertainment and all taxes paid for the event. Divide this total by the number of persons you planned for the number you told the caterer to provide food for. (This number of persons will likely be smaller than the number of persons invited, but may be larger than the number who actually show up. Nevertheless, using the number of guests you relied on for planning purposes is a fair way to compute the per-person cost of consumables.)
The amount you arrive at after dividing the total cost of consumables by the number of persons you planned would attend is the per-person consumables cost. Deduct this amount from each contributor's donation. This "net" contribution is the amount entered in the ORCA software for each contributor. If you did not charge a uniform admission amount, the figure for each contributor will vary. However, if you asked each person, for example, to contribute $100 and the per person consumables cost is $20, the C-3 for this event would show an $80 contribution from each contributor who purchased one ticket. If a couple purchases two tickets for themselves, each of them is entitled to one deduction. In order to avoid the situation where a few contributors pay for all of the food and beverages at an event without showing this expense as a contribution to the candidate, if a contributor purchases several tickets, that contributor is still only entitled to one, per-person deduction for the cost of consumables.
The C-3 report representing the deposit of monies received for the fund raiser will not match the amount of the deposit. This is understood. The "shortfall" is offset in your records by the fact that you will also not report on Schedule A the payments you made to vendors for the consumables. Of course, your records will show that you made these payments, but if you also reported them on the Schedule A, your total expenditures amount would be too high in relation to the amount of contributions you have reported receiving.
[Note, if you are uncomfortable with this common method of reporting deductions for consumables, you might consider reporting on the C-3 each contributor's "net" contribution as discussed above, but also including a line item, in Part 2 of the report, that reflects the lump sum of all monies received that cover consumables provided at the event. If you do this, then your C-3 total for the fund raiser should match the bank deposit of the monies received from the event. Then, since you are accounting for the overall, full amount on your C-3, you would also report the payments to vendors for the consumables on Schedule A.]
The ability to deduct for the cost of consumables may not be construed in a way that undermines contribution limits. For example, if five persons were each to pay one-fifth of the full cost of holding an event for a candidate, part of their in-kind contribution to the candidate would include the amounts paid for the consumables furnished at the event and this in-kind contribution counts against each contributor's limit.
In order to avoid having these in-kind contributions count against each contributor's limit, it might be tempting to a candidate's campaign to organize an event and then have these five persons buy all of the tickets and use the consumables deduction to reduce the amount of the actual contribution from each. This approach would allow the contributors to be the de facto hosts of the event without showing the full value of the contribution made.
However, this result is not consistent with contribution limits nor with the intent of the consumables deduction. As such, each purchaser of fundraiser tickets to a candidate's event is allowed one per-person deduction for the cost of consumables, regardless of how many tickets are purchased. The candidate's committee could still ask table captains to be responsible for selling, for example, ten tickets to an event. But, each ticket would have to be purchased by a separate contributor in order for the campaign to deduct the pro-rated share of consumables from every ticket sold. (If the table captain is actually going to collect money on behalf of the campaign, he or she needs to be a deputy treasurer. The table captain would not have to be a deputy treasurer if he or she only is responsible for finding purchasers who then buy their tickets directly from the campaign.)
The record keeping associated with a fund raiser may be greatly reduced if the event qualifies as a Low-Cost Fund Raiser. Note, do not deduct for the cost of consumables when reporting low-cost fund raisers.