What should be in a donor thank-you letter?

Donors must have a bank record or written communication from a charity for any monetary contribution before the donors can claim a charitable contribution on their federal income tax returns for any single contribution of $250 or more.

A donor cannot claim a tax deduction for any contribution of cash, a check, or other monetary gift unless the donor maintains a record of the contribution in the form of either a bank record (such as a cancelled check) or a written communication from the charity (such as a receipt or letter) showing the name of the charity, and both the date and amount of the contribution.

Best practices call for charitable organizations to provide a written letter. Most nonprofits send letters automatically as part of donor stewardship and include some program updates, however, it’s best to ensure the following items are included in the letter as well:

• Nonprofit name, address, and EIN

• The amount of cash contribution

• A description (but not the value) of a non-cash contribution

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

• A description and good faith estimate of the value of the goods or services, if any, that an organization provided in return for the contribution (Quid Pro Quo)

Organizations must send written acknowledgments to donors no later than January 31 of the year following the donation, however most organizations we work with send them out monthly. The penalty for not providing a written acknowledgement for donations over $250 is $10 per contribution, not to exceed $5,000 per fundraising event or mailing.