If the gift is given to the charity for its charitable purposes, the charity may give pretty much whatever recognition it wants that has, from the IRS point of view, no economic value. That includes recognition in the annual report, a plaque on the wall, an ad in a newspaper, a logo on the 50-yard line at a football bowl game, or naming rights on a program or a building. The donor in that case may claim a charitable contribution deduction for the entire payment.

 

In your case, I am assuming that the charity is raising funds to build or improve a building for a wholly owned for-profit subsidiary. I think it can invest those funds in the subsidiary and give whatever recognition it wants, including recognition in the for-profit building. If it is using the gift for other charitable purposes within the charitable organization itself, I still don’t see any reason that it could not give recognition in another facility.

 

The situation may be different if there are for-profit investors or other non-charitable owners in the for-profit corporation. If the charity is transferring funds for the benefit of the for-profit investors in anything other than a fair market value transaction, it could raise a question of private benefit adverse to the charity. If the contribution is earmarked for such a transaction, it will probably not be deductible by the donor. It certainly would not be deductible if given directly to the for-profit corporation.