A grandmother buys a family membership for her daughter’s household. She will never use the card, never get the parking perk, never see the member newsletter. So when her year-end giving summary shows less than she spent, or her receipt subtracts benefits she never touched, she calls. Plenty of staff agree with her and wonder why Altru doesn’t simply give the purchaser full credit.
The answer depends on which “credit” you mean. In Altru, and in the tax rules behind it, there are at least three different things people lump together, and each needs its own fix.
Three kinds of credit that get confused
- Giving history credit. Does the purchase show up on the giver’s constituent record, count toward their lifetime giving, and qualify them for donor recognition levels?
- Acknowledgment credit. Does the thank-you letter go to the giver, name the right amount, and thank them for the right thing?
- Tax-deductible amount. How much of the payment can the giver deduct, and what does your receipt say?
The first two are configuration and process questions you control. The third is not really an Altru setting at all. It’s a tax question, and it’s the one where well-meaning staff are most likely to get it wrong.
The tax question first, because it limits everything else
The common intuition is that the giver gets no benefits, so the whole payment should be deductible. Be careful here. Under the general quid pro quo rules, benefits your organization provides because of a payment usually reduce the deductible amount whether the payer uses them or directs them to someone else. Buying a membership for a relative is generally treated like buying any other gift for them: the giver received what they paid for and chose to hand it on.
We are not tax advisors, and your organization shouldn’t take a position on this from a blog post either. Before changing how you receipt gift memberships, ask your auditor or tax counsel to confirm the treatment in writing. Then make Altru match that answer. If they confirm the usual approach, your receipt for a gift membership should look the same as for a regular membership at that level: amount paid, minus the stated value of benefits.
Where many organizations end up is this: the giver gets full recognition for the payment, and the receipt states the deductible amount the same way it would for any member.
Making sure the giver gets recognition credit
Check how your gift memberships are actually landing in Altru. Pull a few recent ones and look at both records:
- Is the revenue on the giver’s record? The payment should be tied to the person who paid. If staff are entering gift memberships under the recipient and noting the giver in a comment, the giver’s history will never add up. Fix the process before anything else.
- Is the recipient’s record linked to the giver? The membership belongs to the recipient; the money came from the giver. You want both visible so renewals and stewardship go to the right person.
- Do your giving totals include membership revenue? Many organizations count only donations toward donor levels and exclude membership dues. If that’s your rule, a gift membership will never count toward the giver’s recognition level no matter how it’s entered. That’s a policy decision, not a bug.
Altru’s revenue records generally support crediting a constituent other than the payer for recognition purposes. Exactly how that behaves with membership transactions, and whether it flows into the smart fields your reports use, is worth testing in a sandbox or confirming with Blackbaud support before you change a live process.
Options if you want gift purchases to “count” more
Count gift memberships in donor recognition
If your donor tiers are based on a smart field or query that only looks at donations, add membership revenue paid by the constituent, or specifically gift memberships, to the calculation. This gives the grandmother in the example the recognition she expects without touching receipts.
Offer a membership-plus-gift option
Some organizations let buyers add a separate donation on top of the gift membership. The membership portion is receipted as membership; the added amount is a straightforward contribution with no benefits. Keep the two as distinct lines in the transaction so revenue lands in the right designations and your receipts stay clean.
Use a separate acknowledgment for gift purchasers
A standard member welcome letter sent to the giver feels wrong. Build a query that identifies gift memberships by giver, and send those constituents a letter that thanks them for the gift, names the recipient, and states the amount paid and deductible amount according to your tax counsel’s guidance. The recipient gets the normal welcome.
A short audit before you change anything
- Pull every gift membership from the last twelve months with a query that shows payer, recipient, amount, and membership level.
- Count how many have revenue on the recipient instead of the giver. That number tells you whether this is a data entry problem or a policy problem.
- Pull the acknowledgment and receipt text each group received.
- Take that summary to your finance lead and tax advisor, agree on the treatment, and document it for front desk and online sales staff.
Quick answers
Can I mark a gift membership as fully tax-deductible because the giver gets nothing?
Not without professional sign-off. The general rule treats benefits as received by the payer even when passed to someone else. Get a written answer from your tax advisor.
Will the gift count toward the giver’s donor level?
Only if your recognition rules include membership revenue. Check the smart field or query your tiers are built on.
Who should get the renewal notice?
Decide by policy. Many organizations ask the original giver first, since they paid last time, and contact the recipient only if the giver declines.
