Especially for those valued recurring donors. However, doing so can be a great way to celebrate your relationship with donors who have given multiple times a year. If you’ve automated your receipting process to send out acknowledgments directly after the donation has been processed, you’re not required to send a year-end letter. DO: Remember to Send Out Year-End Donation Receipts Simply use mail merge tags to keep your personal touch. While that may seem like a lot of work, this can also easily be automated via software. This kind of consistency can make life much easier for your donors who give multiple times a year! DON’T: Forget to Say Thanks!Ī donation receipt doesn’t take the place of a well-written thank you! Even if you have expressed your appreciation within the document.Īccording to NonprofitHub, first-time donors who get a personalized thank you within 48 hours of their gift are 4 times more likely to give a 2nd gift. When you automate your receipt generation, you also standardize the look and feel of your receipts.
#Donation receipts for taxes software#
DO: Make Use of AutomationsĪutomated receipting is a standard in many nonprofit software systems, and it can be a game changer when it comes to staying on top of your receipting process. It’s the responsibility of the donor to provide an estimation of the donation’s value, but as a courtesy, your organization should also acknowledge the fair value of the donation in your receipt. Staying consistent with your general monetary donation receipting practices shows that you appreciate in-kind gifts just as much as cash donations.ĭonations of goods, such as vehicles or clothes, and services require a donation receipt if the value exceeds $250. When it comes to the donations of goods & services (also known as in-kind donations), proper receipts are just as important.
DON’T: Forget About Donations of Goods & Services To make this information easy to find, opt for a simple email with minimal design elements, if any.Īlso, be sure to save any flowery language for your thank you letter! A simple sentence expressing your appreciation is best for a donation receipt. Your donors should be able to quickly scan the receipt for the information they need - their donation amount, your organization’s federal tax ID, and the date of the donation. Here are four do’s and don’ts that will help you set up better donation receipts. Taxes are complicated enough, so in order to make filing easier for your donors, it’s important to keep receipts simple and easy to understand. The Do’s & Don’ts of Creating & Sending Donation Receipts Many software options, like Neon One software products, automate this process, so your organization won’t have to worry about staying up to date on compliance laws. We’ll cover those requirements in the next section. There are also additional requirements if a donor gives goods or services, rather than the standard monetary donation. For example, event tickets, purchases from your online store, and raffle ticket purchases are not tax-deductible. In order for a donation to remain tax-deductible, no goods or services can be exchanged for the donation amount. The final point is not required, but it’s recommended by most.
Your organization can use donation receipts to aid in your accounting processes and to track a donor’s history with your organization. Donors use them as a confirmation that their gift was received, and for charitable giving deductions when tax season rolls around. Nonprofit donation receipts serve both donors and your nonprofit. We put together a quick list of do’s and don’ts so you can streamline your receipt process in a way that is 100% IRS-approved.īefore we get into that, let’s start with a common question. While their content is pretty straightforward, when and how you send them can mean the difference between happy donors and tax season headaches. Donation receipts are a fundamental part of the giving process.
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