Say what you will about being locked in, etc, but the TechSoup program is a wonder tool for non-profits. TechSoup acts as a clearing house matching qualified non-profits and schools with software publishers. If the organization meets the requirements put in place by the publisher they can purchase software at deep discounts, often free, while paying TechSoup an administrative processing fee.
Microsoft is obviously one of the larger publishers in the TechSoup system, and they have restrictions in place to make it harder for individuals to game the system. For example, you can only purchase 1 a year and, if I remember correctly, you can only purchase 5 SKUs at a time. Need one package 3 months later? You'll need to wait another 9 months.
The TechSoup system is a bit inconvenient, but the benefits to the non-profits make it worth the hassle. Several years ago the non-profit I volunteer with needed to purchase 15 copies of Office Professional Plus 2007. It cost us a total of $300, or $20 per computer. That's real savings, meaning lower IT costs and less money diverted away from service delivery. Those were the savings for a single office, but we have over 800 offices in the U.S. The savings start to add up to real money after a while.
The point of this article, however, is whether Microsoft is right to state that they donated $844M worth of software when it cost them far less to do so. Frankly, it doesn't matter. The IRS says that the difference between what they could have sold the software for and what they sold it for is the value of the donation, not the difference between their cost and the sale value. It might only cost (hypothetically) Microsoft $50 to produce a $400 software program, but if they sell (or donate) that program to 501(3)c for $0 the IRS allows them to count that as a $400 donation, not a $50 donation. If they sold it for $50 it would be a $350 donation.
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