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§ 22.2 QUID PRO QUO CONTRIBUTION RULESof tuition by a school, the charging of health care fees by a hospital, or the sale ofitems by a museum). 31A nearly identical disclosure provision was part of the Revenue Act of 1992,which was vetoed. The report of the Senate Finance Committee, which accompaniedthe proposal, contained the following explanation of the need for theserules:Difficult problems of tax administration arise with respect to fundraisingtechniques in which an organization that is eligible to receive deductiblecontributions provides goods or services in consideration for payments fromdonors. Organizations that engage in such fundraising practices often do notinform their donors that all or a portion of the amount paid by the donormay not be deductible as a charitable contribution. Consequently, the [SenateFinance] [C]ommittee believes . . . [it] is appropriate that, in all caseswhere a charity receives a quid pro quo contribution . . . the charity shouldinform the donor that the [federal income tax charitable contribution] deduction. . . is limited to the amount by which the payment exceeds the value ofgoods or services furnished, and provide a good faith estimate of the valueof such goods or services. 32There is a penalty for violation of these requirements. 33A charitable organization is able to use “any reasonable methodology in makinga good faith estimate, provided it applies the methodology in good faith.” 34 Agood faith estimate of the value of goods or services that are not generally availablein a commercial transaction may, under these regulations, be determined byreference to the fair market value of similar or comparable goods or services.Goods or services may be similar or comparable even though they do not havethe “unique qualities of the goods or services that are being valued.” 35An example concerns a charitable organization that operates a museum. 36 Inreturn for a payment of $50,000 or more, the museum allows a donor to hold a privateevent in one of its rooms; in the room is a display of a unique collection of art.No other private events are permitted to be held in the museum. In the community,there are four hotels with ballrooms having the same capacity as the room in themuseum. Two of these hotels have ballrooms that offer amenities and atmospherethat are similar to the amenities and atmosphere of the room in the museum; noneof them have any art collections. Because the capacity, amenities, and atmosphere ofthe ballrooms in these two hotels are comparable to the capacity, amenities, and31 H. Rep. No. 103-213, 103d Cong., 1st Sess. 566 (1993). The IRS issued temporary regulations (T.D. 8544)and proposed regulations (IA-74-93) to accompany these rules. A hearing on them was held on November 10,1995, at which time witnesses from the charitable sector expressed dismay at the prospect of having to valuebenefits, particularly intangible ones, provided in exchange for charitable contributions. A summary of thishearing is at 2 Fund-Raising Reg. Rep. (no. 1) 1 (Jan./Feb. 1995). There is little in the final regulations to assuagetheir concerns.32 Technical Explanation of the Finance Committee Amendment (hereinafter Technical Explanation), at 586.The Technical Explanation was not formally printed; it is, however, reproduced in the Congressional Record.138 Cong. Rec. (no. 112) S11246 (Aug. 3, 1992).33 IRC § 6714; see § 10.14. This requirement is separate from the substantiality rules. See § 21.1(b). An organizationmay be able to meet both sets of requirements with the same written document. An organization in thisposition should, however, be careful to satisfy the quid pro quo contribution rules in a timely manner becauseof this penalty.34 Reg. § 1.6115-1(a)(1).35 Reg. § 1.6115-1(a)(2).36 Reg. § 1.6115-1(a)(3), Example 1. 611