Donation Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Donation, written in plain English, along with examples of how it is used.

What is Donation?

n. Contribution or gift. May qualify as an income tax deduction if made to a qualified non-profit charity, religious, educational or public service organization.

History and Meaning of Donation

The act of giving to others in need has been present in human societies since the beginning of history, but the term "donation" specifically refers to a gift or contribution made without expecting anything in return. The concept of donations has its roots in religious and charitable organizations, but nowadays, donations can be made to various types of organizations, including non-profits, educational institutions, and political campaigns. Donations may be made as a one-time gift or as recurring contributions over an extended period of time.

In legal terms, donations can have different implications depending on the context. In the public sector, donations to political campaigns are subject to specific regulations and limitations, while donations to charities can be tax-deductible. For donors, making donations can be a way to support causes they believe in without incurring the administrative and operational costs of starting and maintaining a charitable organization.

Examples of Donation

  1. An individual donates $300 to a local animal shelter to support their efforts in caring for abandoned pets. The donation can be tax-deductible if the animal shelter is a qualified non-profit organization.

  2. A company donates $10,000 to a university to fund research in renewable energy. The donation may be acknowledged with a plaque or a naming opportunity, but the company cannot request any intellectual property rights or use of the research findings.

  3. An individual donates $50 to a political campaign for a mayor candidate. In this case, the donation is subject to regulations that limit the amount of money an individual can contribute to a campaign.

Legal Terms Similar to Donation

  • Contribution: A synonym for donation, often used in the context of political campaigns or non-profit fundraising.
  • Gift: A transfer of property or money without an expectation of compensation or return. Gifts can be subject to gift tax and have different implications depending on the tax code.
  • Charitable giving: A synonym for donation that specifically refers to gifts made to charitable or religious organizations. Charitable giving can be tax-deductible under certain circumstances.