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Telling Donors Thank You, With a Little Help from the IRS

There is so much going on in the day-to-day world of your nonprofit organization that the simple act of saying “thank you” can get overlooked. But, as fundraisers, we cannot let that go unsaid. Our donors want to support us, they want to help us serve our community, and they will be very forgiving, but everyone has their limit.


One of the most important parts of fundraising is if you don’t thank your donors, then you will lose your donors. If you don’t thank your donors in a way that helps them during tax time, you will give them a reason to not support you next year.


It is your responsibility to be familiar with the most current IRS guidelines regarding charitable donations. Here is a link to the IRS publication 1771 (http://www.irs.gov/pub/irs-pdf/p1771.pdf).


When you send your written gift acknowledgments, here are a few basics to include:

  • name of your organization

  • date of donation

  • amount of the cash donation

  • description (but not the value) of non-cash contributions

  • statement that no goods or services were provided by the organization in return for the contribution, if this is the case

  • or if goods or services were provided, then a good faith estimate of those goods or services


Examples of sample acknowledgements.

  • “Thank you for your cash contribution of $300 that (organization’s name) received on Date. No goods or services were provided in exchange for your contribution.”

  • “Thank you for your cash contribution of $350 that (organization’s name) received on Date. In exchange for your contribution, we gave you a cookbook with an estimated fair market value of $60.”

  • “Thank you for your contribution of a used oak baby crib and matching dresser that (organization’s name) received on Date. No goods or services were provided in exchange for your contribution.”


I’m often asked at what level of gift should we acknowledge with a written letter and how soon should these be sent. Nonprofit best practices recommend sending a written acknowledgment with three business days. I recommend within one business week depending on your internal processing system. There is no legal requirement for gift acknowledgements for contributions of less than $250 unless the donor receives something of value in return for the gift. But, don’t be satisfied with the just the minimum to appreciate your donors.


This is just the bare bones of thanking your donor. Thank you letters should convey a true sense of gratitude toward the donor within the framework of the IRS guidelines.


Your donor relations and stewardship policies and procedures should include a timeframe in which a letter is sent, what the letter says, and who signs it. Another great resource is the Association of Donor Relations Professionals.

https://www.adrp.net/


Cheers,

Michelle Crim, CFRE


Dynamic Development Strategies can help. We offer coaching and fundraising services for our nonprofit clients. We specialize in startup and smaller nonprofits because we understand your challenges. Please contact us for more information.

https://www.dynamicdevelopmentstrategies.com/

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