Writing A Donor Acknowledgement Letter

From a young age, most of us are taught the importance of the “Thank You” note. For every birthday party ever…opening the gifts is the most exciting part of the day, right? Yet, we know Mom is probably writing down every person’s name and the gift that they contributed, so she can later hand us that information along with some blank cards. After which, we can procrastinate filling them out until our next birthday starts to come around the bend. Sound familiar?

Well, a donor acknowledgement letter is more than just a thank you but the sentiment is still there. Anytime your nonprofit organization receives a donation, it’s important to extend this gesture of gratitude. No matter how large or small the contribution, the thank you is of equal importance. However, with any donation larger than $250, the IRS requires your organization to provide a formal acknowledgement letter to the donor. These letters allow donors to provide proof of donation for their own tax purposes and must be mailed or emailed to them by January 31st of each year.

Just as Mom may have required that you not only say thank you in your note but also that you mention the exact gift they contributed to your awesome birthday party – the IRS requires that your donor acknowledgement letters include some specifics:

Names – Then name of the donor and the full, legal name of your organization.

Date – The date that the gift was received by your nonprofit. If one donor has made multiple contributions to your organization within the same tax year, you must provide donor acknowledgment letters for each donation separately. You cannot combine contributions.

Tax-Exempt Status and EIN – A statement declaring your organization’s 501(c)(3) tax-exempt status, including your EIN (Employment Identification Number).

Amount or Description – A clear monetary amount or a description of a non-cash gift. For non-cash gifts, it is not necessary to assign a cash value, just include a description of what was donated.

Exchanges – If your organization exchanged any goods/services for the provided donation (such as an event ticket, a t-shirt, etc) you must note this in your letter, along with an estimate of the fair market value. If the donor did not receive anything in exchange for their donation, you should state that instead.

For any further clarification, check out the IRS mandate for written acknowledgements here: https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions-written-acknowledgments

        In addition to the acknowledgement of their donation to your organization, you can also use this opportunity to reengage these donors by outlining current and future goals. Individuals who have already contributed to your organization once, are likely to be interested in doing so again. You can use the second half of this letter as an outreach and distribution of information for any future fundraising missions or events. Re-iterate your mission statement as a nonprofit organization and lean into the opportunity of possibly sparking a continued system of support from your donors.

Happy writing!!