Go Fund Me

Q: We want to create a GoFundMe campaign for a fellow minister at another church who was diagnosed with kidney failure and will be facing a kidney transplant. What are the taxable consequences for these gifts and can donors receive giving credit? Does it matter if we receive these funds through our church bank account or through the minister’s  personal bank account?

A: In simple terms, GoFundMe (and other online fundraising programs like it) is just a conduit, so the taxability of any gifts received through this channel will follow IRS rules on gifts and donations. In many cases, the gifts will not result in taxable income. However, whether the donors can receive charitable giving credit is determined by how the funds are received, managed and used.

For example, if a church or charity sets up a GoFundMe page to receive gifts for an existing benevolence fund, the recipients of the benevolence funds will not incur taxable income, and the donors may be able to get charitable giving credit. The church who is administering the GoFundMe page should follow their prescribed benevolence policy and practices in accordance with IRS rules to ensure the gifts qualify for charitable giving credit. (GoFundMe or other online fundraising programs may have additional requirements to validate the charity.)

If a church or charity sets up a GoFundMe page to receive gifts for a specific individual, the gifts received will not become taxable income for the recipient, but the donors will also not receive charitable giving credit because the charity is merely a “pass-through” and not providing any accountability or administration of the funds in accordance with IRS regulations.

If an individual sets up a GoFundMe page to receive donations for medical expenses, the gifts received will not become taxable income. Further, the “donors” cannot receive charitable giving credit because the gifts are between two individuals and no charitable organization is involved in the transaction.

GoFundMe’s Web site offers the following guidance:

“While this is by no means a guarantee, donations on GoFundMe are simply considered to be “personal gifts” which are not, for the most part, taxed as income in the U.S. However, there may be particular, case-specific instances where the income is taxable (dependent on amounts received and use of the monies, etc.).”

They also add the following caveat (which I wholeheartedly support):

“We’re unable to provide specific tax advice since everyone’s situation is different and tax rules can change on a yearly basis. We advise that you maintain adequate records of donations received, and consult with your personal tax adviser.”

See http://support.gofundme.com/hc/en-us/articles/204295498-Am-I-responsible-for-taxes-USOnly-, accessed August, 2018.