In broad terms, a “priceless” item is something you’re not going to buy off the shelf. But using the term in fundraising isn’t so simple.
Benefit galas and other fundraising events around the world use the term priceless to refer to items up for auction that are truly unique items or experiences. These can include:
- Autographed memorabilia
- A private dinner with a celebrity
- Rights to name a local street
Does priceless have a value?
If your nonprofit is selling a priceless item at auction, you absolutely need to put a value to it. The most important reason for this is tax purposes. When people buy an item at a benefit auction, they are only able to write off the amount they spend above retail value. For example, Mr. and Mrs. Smith buy a round of golf that has a retail value of $100 and they agree to buy it for $150. Their tax write-off in this case is $50. Therefore, if someone buys an item that is considered priceless, in order for them to receive a potential tax benefit, they need to know the retail value of that item.
How do we determine retail value of priceless items?
Make a good faith estimate of the value of goods or services using “any reasonable methodology.” If selling autographed memorabilia, research what other similar types of memorabilia have sold for. If selling a private dinner with a celebrity, estimate the price per person and factor in a reasonable fee for the celebrity’s time. The goal is to make sure you assign a value and that you are able to justify your figure.
Do we have to reveal the value of priceless items?
You do not legally have to disclose any retail values during a live or silent auction. You only have to disclose the retail value on a buyer’s receipt. In fact, you never have to disclose any retail values unless it is the face value of a gift certificate.
Marketing priceless items
Should you really market auction items as priceless? Absolutely! For many people, the items and experiences truly are! Just make sure, in the end, you can defend the value so that Uncle Sam stays happy.