Community Benefit

Entertainment/Sporting Fundraising Events

Please Take Note: The information provided does not constitute legal or tax advice. The material is provided for informational/educational purposes only. Please consult with counsel regarding your organization's particular circumstances.

Question: We host an annual golf outing. All of the funds raised go directly back to the community for identified unmet health needs i.e. immunization, health profession shortage scholarships, parish nursing, etc. Should we count the expenses to put on such an event as community benefit?

Recommendation: The task force recommends that organizations consider the following guidelines when deciding whether to report fundraising costs for golf outings, galas and other entertainment-oriented events:

  • Do not report any costs if the primary purpose of the event is marketing/public relations.
  • Do not report costs related to entertainment aspects (green fees, prizes, food).
  • Report other expenses associated with fundraising, such as staff time, if all of the proceeds go to community benefit.
  • Be very conservative and be sure any expense reported passes the "laugh test."

We recommend that when a hospital organization is asked to co-sponsor (contribute to) a fund raising event sponsored/hosted by another nonprofit organization with proceeds going to an activity that would qualify as community benefit, the hospital count as community benefit the percentage of the sponsorship expense not related to marketing For example, a hospital may decide that 75 percent of the donation is community benefit and 25 percent of the donation was for marketing exposure. There should be written correspondence to the sponsoring organization directing that the proceeds funds be restricted for an identified community benefit activity.

(October 2008; revised November 2008; revised January 2011; revised February 2014)