Tuesday, November 13, 2018

How to Donate Book Royalties

Dear Rich: How do I go about donating a portion of royalty proceeds from a book to a charity? 
If your publisher is amenable, the easiest method to donate royalties is to request that your publisher pay a portion of your royalties directly to the charity. You can formalize the payment (or payment system if you wish to cap payments or limit them to a specific time period) by including the details in your publishing agreement or in an amendment.
If the publisher isn't willing to make separate payments to the charity, you can either pay the charity directly from your royalty payments, or you can contact the charity for assistance. Many nonprofits have a mechanism for receiving royalties while the author is alive (or as "legacy gifts" following the author's death).
Taxes. The practice of donating book royalties to nonprofits was popularized in the 1980s when authors and publishers began to reap the marketing benefits of being aligned with a social cause (for example, a portion of royalties for a Rock Hudson biography was donated to an AIDS foundation). Some editors and authors believed the practice would also provide tax benefits. In reality -- unless you assigned the book's copyright (which means you give up ownership of your work) to the charity -- there may not be any tax benefits from donating a portion of the royalties. For example, if your publisher pays 75% of royalties to you and pays 25% to your charity, you would still be taxed for the full 100%. You can receive an income tax deduction for your donation, but this deduction can't be more than 50% of your adjusted gross income for the year -- a formula that may not provide much tax relief.