Does Your Donor Need a Receipt?

Good news, you’ve received a $1,000 contribution from a generous donor. Of course, as a responsible and caring nonprofit manager, you’ll send a gracious acknowledgement of the donation. It’s not just good manners, it’s good development practice to let donors know that their money is going to work for things they care about—and that your organization is the way those things will get done.

According to Cathleen Kiritz of The Grantsmanship Center in Los Angeles, Calif., if you stop with a thank-you, you’re not done. The acknowledgement letter should contain some very specific information so your donor can take a tax deduction for the gift.

Let’s use the $1,000 contribution as an example. First, it’s over the Internal Revenue Service (IRS) threshold of $250, so it’s covered by these requirements: 

  • The organization’s legal name and tax status along with its EIR;
  • Total dollar amount; and, 
  • If the gift contained anything beyond the cash, a statement of what that “thing” was. 

The letter also tells the donor that no goods or services of value were provided by your organization, according to Kiritz. If you did provide such goods or services, you might estimate their cash value, but describe them in any event. (“We hope you enjoy your tote bag.”)

Finally, it’s a good idea to include a sentence that reminds the donor to keep the letter for his or her tax filing. After all, it’s a receipt.

This doesn’t have to be burdensome and a nonprofit can prepare a boilerplate version for such acknowledgement letters. Smart development officers or executive directors will see these letters as opportunities to build relationships and make sure the donor knows how important their support is to your organization. © Copyright 2021 The Grantsmanship Center