Any time your nonprofit organization receives a donation, it’s important to express your gratitude – no matter how large or small the contribution may be. But if an individual donates more than $250, the IRS also requires your organization to provide a formal acknowledgement letter that the donor can use for tax purposes. These letters should be mailed or emailed to your donors every year by January 31.
A donor acknowledgement letter should include a few specific items to assist the donor and help your organization comply with IRS regulations:
Names: The name of the donor and the full, legal name of your organization.
Tax-Exempt Status and EIN: A statement declaring your organization’s 501(c)(3) tax-exempt status, including your EIN (Employer Identification Number).
Date: The date that the gift was received by your nonprofit. Every gift should have its own letter – if the donor made two separate contributions to your nonprofit, you should send two separate letters rather than combining all gifts into a single acknowledgement letter.
Amount/Description: A clear description of the gift or monetary amount. For non-cash gifts, do not attempt assign a specific cash value; just include a description of what was donated.
Exchanges: If your organization provided any goods or services in exchange for the donation (like a t-shirt, special event ticket, or thank-you gift) you should acknowledge this in your letter, along with an estimate of the fair market value. If the donor did not receive anything in exchange for their donations, you should state that instead.
In addition to these specific items, your organization can also use the donor acknowledgement letter as an opportunity to engage your supporters and share information about your nonprofit mission, accomplishments, and goals for the future.
Sample Donor Acknowledgement Letter for Cash Donation
Dear [DONOR NAME],
Thank you for your generous donation to [ORGANIZATION NAME], a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code ([EIN #]).
On [DATE], you made a contribution of [AMOUNT] in support of our mission. This gift was processed as credit card transaction.
No goods or services were rendered in exchange for your contribution. Your contribution is tax deductible to the full extent permitted by law. Please retain this letter for your tax records.
With gratitude,
[SIGNATORY & TITLE]
Sample Donor Acknowledgement Letter for Non-Cash Donation
Dear [DONOR NAME],
Thank you for your generous donation to [ORGANIZATION NAME], a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code ([EIN #]).
On [DATE], you donated [DESCRIPTION – WITHOUT MONETARY VALUE]. This gift is greatly appreciated and will be used to support our mission.
In exchange for this contribution, you received [GOODS OR SERVICES – WITH ESTIMATE OF FAIR MARKET VALUE]. Your contribution is tax deductible to the extent that it exceeds the value of the goods and service our organization provides in return. Please retain this letter for your tax records.
With gratitude,
[SIGNATORY & TITLE]
