This issue is popping up again on the forums so I thought I’d mention it here. In the USA, if you want to do pro bono work, great, fabulous, but don’t look for a tax benefit from it. You cannot deduct the value of your donated time or services (and that includes usage fees). This is actually one of the clearest IRS rules out there. You can find it here, in Publication 526.
Those are the actual words used in that IRS publication, btw: You cannot deduct the value of your time or services.
Shockingly clear, especially for anything coming from the IRS, isn’t it?
Now, even though you don’t get to write of the value, you do want to preserve the value in the mind of your pro bono clients. You never know when Betty from your favorite charity will leave to work for Big Corp and want to hire you. This way, she’ll have a clue what the value of your services (and the industry in general) really are. You do this by showing on your invoice the full value and then noting a discount.
For example:
Creative Fee $2500
Usage License $3500
Total $6000
Discount -$6000
Balance Due $0
So I encourage you to give to organizations you believe in and want to help. But do it because it comes from your heart and forget about getting anything out of it. Just give.
The point of doing the work because it’s from the heart holds true, and you can’t make anything for the time you spend, but you can generally write off any actual out of pocket expenses, including materials, postage and delivery charges, mileage, etc. Obviously, you can’t do that if you’re already writing these off as a business expense. As always, check with your tax advisor to be sure.