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Human Resources

What expense category are donations?

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There is no definitive answer to this question, as donations can be classified as a number of different things depending on the organization receiving them and the purpose of the donation. However, some common expense categories for donations are:

  • Charitable Contributions: This is the most common classification for donations, and generally includes any donations made to a 501(c)(3) organization. These donations are typically tax-deductible for the donor.
  • Sponsorships: Donations made to sponsor an event or activity (such as a sports team or charity walk) are typically classified as sponsorships. These donations are often tax-deductible for the donor, but may have other benefits as well (such as publicity).
  • In-Kind Donations: These are donations of goods or services, rather than money. In-kind donations are often tax-deductible for the donor, but may have other benefits as well (such as publicity).

Ultimately, it is up to the organization receiving the donation to determine which expense category is the most appropriate. If you are unsure, you can always ask the organization for guidance.

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As we scale we need tools that are built to scale with us - we need to see expenses real time, we need to see duplicate spend. These types of insights are important to the health of our business.
Steve Padis, SVP Finance & Strategy, Barry's
The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.

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