Charging Money for Special Events

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Can we set a ticket price for a church concert?

Elaine Sommerville responds in our Ask the Experts discussion.

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Finance, Finance Reporting, Fundraising, Tax, Tax exempt

Posted:

3/24/2010

Total Reader Responses:

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Question:
I am on the board of a 501c3 performing arts organization. We plan to sing a concert in a church. The church insists we put "suggested donation" on our tickets. The ticket price is the fair market value and we don't consider any part of the ticket price to be a tax-deductible contribution to our organization. The church is under the impression they can only have events on their grounds which are by donation. Is this correct? Does it matter whether we are paying rent for the facility? The church's children's choir will be performing with us. Relevant to this issue, does it matter whether we are sharing the income with them? Paying them a fee for their participation?

Answer:
Nonprofit organizations are not restricted to "for donation only" event entry fees. Like other organizations, they may establish a ticket price for an event and sell tickets at that price. Insisting that the wording "suggested donation" be placed on a ticket implies that a person may obtain a ticket for less than the amount of the "suggested donation" as well as implies that the ticket price might be a donation. Depending on the circumstances, both impressions may be misleading.

The primary concern for nonprofit organizations of all types is to determine if the event furthers the organization's exempt purposes. If this link can be proven, then the organization may price attendance to the event at a reasonable amount to recover all of the fixed as well as the soft costs associated with the event.

A resource that may be helpful in planning events like this is "Hosting Large Events at Church" on ChurchSafety.com.

This response was provided on 3/19/2009. This is not legal advice and is provided as information only.

Posted: December 02, 2010

ChrchAcctnt

(Guest)

In Missouri, our church was notified by the State that there is a 2% "nonresident entertainers tax" for anyone who resides outside of the state and gets paid $300 or more. A nonresident entertainer in Missouri are "individuals, partnerships and corporations not residing in Missouri who entertain other people for compensation by performing any vocal, instrumental, musical, comedy, dramatic, dance or other performance before a live audience". This includes persons traveling with and performing services on behalf of a nonresident entertainer who receive compensation. Are IRS 501(c)(3) not-for-profit corporations exempt from the 2% withholding on nonresident entertainers? No, the not-for-profit corporation (churches) should pass the 2% withheld down to the employee. There may be certain state tax regulations for visiting singers and entertainers that they should be made aware of.

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