[NTLUG:Discuss] Tax deductions -vs- Open source donations

[Leroy Tennison]

Richard wrote:
> When considering donating to open souce projects, how do businesses 
> handle expensing, writing off, or deducting the amount donated?  What 
> about when the donation is placed as a bounty on a particular feature?
> 

An interesting question.  I don't know if open source projects have a
way of being tax deductible.  If they were in some significant way
supporting education or helping the poor or some other recognized "good
cause" then they might be able to become recognized by the IRS.  There
may be other avenues as well but I don't know about them.  Donations to
a recognized entity should be tax deductible to the extent that no
return benefit was received.  This is why I think the "bounty" part
would be, at best, risky.

Another approach might be to consider something other than a donation.
More than a few projects provide advertising for their sponsors on their
web site and using the "marketing cost" route might be a better
alternative.  Even entering into an agreement to provide money for a
specific feature might be considered payment for services rendered and
should be a legitimate business expense if it can be shown that there
would be business benefit.

I guess the question for me is why is a donation preferable?