Are Fundraising Ticket Perks Tax Deductible?

Dear Charity Clairity,

We’re revamping our giving levels and rethinking the “perks” donors receive at different tiers—beyond a name on the website or in the program guide.

Here’s where I’m getting stuck (at least in my head): how do we handle tax deductibility when benefits get more experiential?

For example, we’re considering things like a 15% discount on festival and year-round ticketing (with an obviously unknown value), or a set number of free tickets (when ticket prices vary). I know the old rule of thumb used to be that benefits under $75 could be ignored—but it looks like the rules have changed.

Most of our giving levels would start at $1,000. Could offering a 15% discount on tickets throughout the year fall under the “insubstantial benefit” rule?

— Tax Deduction Confused

Dear Tax Deduction Confused,

You’re asking exactly the right questions. As nonprofits get more thoughtful (and creative!) about donor experiences, tax deductibility can feel like a maze.

Let’s break it down—starting with the basics, then getting into how tickets and discounts fit into the picture.

Quid pro quo rules: the basics

If a donor receives anything of value in return for their contribution—event tickets, discounts, gifts—the fair market value (FMV) of those benefits must be subtracted from the donation to determine the tax-deductible portion.

• The donor must be told the FMV of the benefits they receive.
• The nonprofit must disclose this information in the solicitation or acknowledgment.

Typically, this looks like: “Your donation of $X is tax-deductible to the extent it exceeds the fair market value of the benefits received, which we estimate at $Y.”

Where the $75 rule really fits

This is one of the most misunderstood parts of the tax code.

The $75 rule doesn’t mean benefits under $75 can be ignored. Instead, it means that if a donor gives more than $75 and receives something in return, the nonprofit is required to provide a disclosure statement showing:

• The value of the benefit
• The deductible portion of the gift

In other words, it triggers a disclosure requirement—it doesn’t eliminate the need to value benefits.

The de minimis (token exception) rule

There is a separate token exception for benefits of insubstantial value (IRS Rev. Proc. 90-12).

Under current IRS guidance, a benefit may be considered insubstantial—and the full gift deductible—if:

• The value of the benefit is the lesser of 2% of the donation or $125, and
• The cost of the benefit to the organization is less than $12.50

This typically applies to logo items (mugs, totes, calendars) or front-end premiums like address labels—not tickets or discounts, which usually have a measurable market value.

Special cases: tickets, discounts, and variable value

This is where things get more nuanced.

1. Free Tickets (with varying prices)

You’ll need to assign a reasonable FMV, even if prices fluctuate. Many organizations use the average ticket price or the highest general admission price.

If a giving level includes “two free tickets,” that value must be subtracted from the donation total—unless the donor waives the benefit in writing.

2. Percentage Discounts (like 15% off tickets)

Discounts are tricky because the value isn’t fixed. You’ll need to estimate the maximum reasonable benefit a donor could receive.

For example:

• Four $25 tickets = $100
• 15% discount = $15 benefit
• Multiply by how often the discount could reasonably be used in a year

You can be conservative—but you must be reasonable.

How to stay donor-friendly (and IRS-friendly)

1. Keep benefits within “insubstantial” limits

For a $1,000 gift, 2% equals $20. If the estimated FMV of a discount exceeds that amount, the gift is not fully deductible.

Discounts also scale quickly. For example, if tickets are $25 and a donor buys six tickets in a year, a 15% discount equals $22.50—already over the 2% threshold.

And remember: discounts are not token gifts. They represent real, recurring financial value.

2. Limit the scope of discounts

A year-round 15% discount will almost always exceed de minimis limits unless tightly restricted.

Instead, consider options like:

• “Up to four discounted tickets annually”
• “Valid for one festival event”
• “One-time 15% discount code”

This preserves the feeling of a perk while keeping the FMV manageable.

3. Allow donors to waive benefits

If donors can waive benefits in writing, their gift may remain fully deductible. Be sure this option is clearly communicated—otherwise, the IRS assumes the donor received value simply by having access to the benefit.

4. Separate perks from donations through membership

Many museums and zoos use a membership model. Under IRS rules, certain recurring benefits may be considered insubstantial if:

• The annual payment is $75 or less, and
• The benefits include things like discounted admission, gift shop discounts, or member-only events, with per-person costs within token limits

This approach can offer flexibility while keeping compliance clear.

And if this still feels confusing (you’re not alone), it’s always wise to consult a nonprofit-savvy attorney or CPA.

— Charity Clairity