Allocating gross joint fundraising proceeds
In general, expenses must be paid before proceeds may be transferred to the participants. Thus, the joint fundraising representative may make payments for fundraising expenses from gross proceeds collected at the fundraiser (and from funds advanced by the participants). Nevertheless, it must allocate (but not transfer) gross proceeds among the participants.
Reporting by joint fundraising representative
The joint fundraising representative reports all joint fundraising proceeds in the reporting period in which they are received. If any prohibited contributions are received for a participating unregistered organization, the joint fundraising representative must report them as a memo entry. Any Schedule A used to itemize contributions must clearly indicate on the schedule that the receipts are joint fundraising proceeds.
Reporting by participating committee
Using the records received from the joint fundraising representative, a participating committee also must itemize its share of gross receipts as contributions from the original donors on a memo entry Schedule A. When itemizing gross contributions, the participant must report the date of receipt as the day the joint fundraising representative received the contribution.
Example
Committees A, B and C are using an allocation formula of Committees A and B, 25 percent each; Committee C, 50 percent.
The participants receive a $2,000 contribution from a donor who had previously contributed up to his limit to Committee C. If the joint fundraising representative were to divide the contribution according to the allocation formula, Committee C would receive an excessive contribution of $1,000. Instead, the excess $1,000 is divided equally between Committees A and B, since their proportionate shares under the allocation formula are equal. Each receives an extra $500, bringing their total allocation to $1,000 apiece.
If, however, Committee A can accept only $800 from the contributor without exceeding the limit, the excess $200 is allocated to Committee B. If Committee B cannot accept the money for the same reason, the $200 must be returned to the contributor.
