Yeah, I've had people from different oranizations ask for donated things, whether it's signs, banners or just time. And they tell me "It's tax deductible!" They have no idea that the only part of a $200 Banner that's tax deductible is what ever i paid for the materials and ink. The rest of it whether it's the time to produce it or design time or the profit you would have made on a paying customer is just money down the drain. Not that I dont' help out some groups but they almost feel like you're just as well off to donate it be cause I can "write it off"!
Even that isn't quite accurate because, depending on your accounting system, you have either already written off the purchase of those materials or you will count whatever is left as inventory at the end of the year. Thus the write off is whatever has been consumed. But it would also have been written off had you been normally paid for the job.
The only true write off you would have is if you went out and spent money for the work. For example, you call an outsource vendor and order a banner for the charity and pay for it out of your business. That goes straight through to your ledger as an expense. Another example would be if you ordered the materials for the charity and called in a part time employee to make the banner. When you pay the employee and the material supplier, that becomes a expense. In both examples, there is no sale, therefore whatever you spent is written off by way of the expense ledger. If it cost you $100 and you had the charity pay you $25 for it, you have a difference of -$75 which is an expense in your books.
In summary, there has to be a cash loss that is expensed. That expense must go to someone who pays taxes on the amount received. So, for example, if you cut yourself a check for $100 in supplemental pay to create the expense, then you would have to pay income tax on the $100.
There's no way around it. The only write off you get for donations is the reduction of your own gross sales that you might have received by using the time and materials for a normal sale.