Donation Acknowledgment Letters: What You Need to Include

Sending thank-yous to your donors doesn’t just make sense in terms of building and maintaining relationships. The IRS mandates that taxpayers substantiate single contributions of $250 or more with contemporaneous written acknowledgments. Here’s what you should include in those acknowledgments.

The Essentials

A written contribution acknowledgment should contain:

• The name of your organization,
• The amount of the contribution,
• The date of the contribution,
• A description (but not the value) of noncash contributions,
• When appropriate, a statement that no goods or services were provided by your not-for-profit,
• When appropriate, a description and good-faith estimate of the value of any goods or services provided in exchange for the contribution, and
• When appropriate, a statement that any goods or services provided consisted entirely of intangible religious benefits.

Some state tax authorities also require a tax-exempt status statement with your organization’s Employer Identification Number.

The IRS leaves it up to not-for-profits to decide on the appropriate medium for donation acknowledgments. For example, it could be a letter, postcard, email or text.  

Timing Matters

According to the IRS, acknowledgments are “contemporaneous” when donors receive them by the earlier of 1) the date they actually file their income tax returns for the year of the contribution or 2) the due date of the return. But, from a strategic perspective, you’re best off sending acknowledgments out as close to the receipt of the donation as possible.

Additional Considerations

Follow up with a thank-you note. Many not-for-profit leaders find that a simple hand written thank you note does wonders in maintaining engagement with donors. Most people don’t send follow-up correspondence, yet it’s a simple, powerful way to stand out in your donor’s mind. A thank you note is a strong remedy for donor fatigue because it adds a human touch to your relationships. Email thank you notes are like a “mist that appears for a little while then vanishes.” On the contrary, most people have difficulty throwing away a handwritten thank you card and often read it more than once.  Taking the extra time to show true appreciation in an authentic way can pay off dividends. 

For more information, contact us. We’re here to help.

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