• IRS special tax incentive rule know as section 170 (e)(3) allows manufacturers and distributors to make donations of equipment and other inventory to nonprofit tax-exempt 501©(3) organizations at a considerable tax advantage.

• The property donated must be new or reconditioned to new.

• Gifts can usually be deducted at cost plus on-half the difference between the cost (basis) and the fair market value (FMV) not to exceed twice the basis of the property.

• Example--A donation of books

A corporation donated 1,000 books; each book costs $4 to manufacture and sells for $12.  The donation would earn the corporation an $8,000 tax deduction. ($4+$4  1/2 the difference between cost and FMV = $8 x 1,000 books=$8,000)

• Deductions are limited to 10$ of the taxable income each year (excess donations may be carried forward)

• The purpose of the 170 (e)(3) tax law was to provide a tax incentive to companies wishing to donate usable inventory to the ill, need, or minors though a nonprofit 501©(3). Your donation to the Michigan Friends of Education will provide an important role in your company's efforts to serve important social needs while exercising sound business practices and at the same time it will enrich the lives of many less fortunate people.

To Whom?

• As a non-profit 501©(3), the Michigan Friends of Education is in a position to accept donated materials suitable for use by (or for the care of) the ill, the needy, or minors. All donated items are distributed to U.S. citizens only.

• Within 10 working days after receipt of your donations we will provide your company with a complete acknowledgement of the donation for tax purposes.

• Our foundation has the capability of accepting large shipments of donated items.  We have loading dock facilities and in excess of 15,000 square feet of warehouse space.

• By working directly with our foundation, your corporation will not experience any agent fees for placing your donation.

• Our foundation serves a wide variety of qualified social organizations. Most importantly we do not charge any of our participating organizations any type of membership fees or costs of freight. Annual membership fees and freight costs prohibit many worthwhile organizations from serving their clients with donated items. All organizations served by our foundation receive your donated materials absolutely free, to be redistributed to their clients.