That being said, donors will likely ask for official receipts even for gifts under $250, so it is best practice to always include them, regardless of the donation amount. For gifts of $250 or more, an official receipt is required. For gifts below $250, this can be a written communication from the organization, such as a thank-you letter or an email. Similarly, including a statement about receipts in your year-end giving campaign, for example, reminds people that if they make their donations before the end of the calendar year, they’ll be able to include them when filing their taxes in a few months.Īs a general rule of thumb, donors cannot claim a tax deduction without some sort of record that a donation was made. For some major gift donors, reducing the amount of taxes they have to pay is one of their main reasons for giving, so fundraising officers will often emphasize receipts when making the ask. Plus, if a donor ever asks for a second receipt because they’ve misplaced the first one (this happened quite often at the nonprofits where I worked), you’ll be able to quickly and easily issue them one.įinally, having a robust receipting system in place can act as an incentive for donors. It allows your organization to keep track of all donations coming in. Having a proper receipting system in place is also a sign of good accounting and record keeping. On the other hand, because receipts are typically sent with a thank-you letter or a note, they act as an opportunity to express gratitude and deepen relationships with donors. Most donors expect to receive a receipt upon making a donation, so having to ask for one is an inconvenience that can sour their relationship with your organization. It’s a way to let donors know that their contributions have been received and are greatly appreciated. People often like to keep track of their finances and providing a receipt is a good way for them to keep a record of where their money went.įor organizations, providing donation receipts is part of good donor stewardship. That being said, it’s good practice to provide a receipt even for small one-off donations that won’t be used for tax purposes. Thus, they need to provide the IRS with proof that a donation has been made. Perhaps the most important reason why donation receipts are issued is that donors can use their charitable contributions in any given year to reduce their income tax levels. So, for the purposes of this blog post, we’ll define a donation receipt as a written acknowledgement of a charitable contribution made to a qualified 501(c)(3) nonprofit organization. Charitable donations made to 501(c)(3) organizations are tax deductible however, donations made to other types of nonprofits, such as clubs, chambers of commerce, and homeowners’ associations, are not. We’ll cover this more in depth later on, but before we do, it’s important to note that not all nonprofit organizations are qualified to accept tax deductible donations. While most receipts are created for this specific purpose, technically speaking, a letter, card or an email can also be considered a receipt, as long as it states the names of the organization and the donor, the date, and the amount of the donation.ĭonation receipts have great benefits for both donors and the organization that issues them, but they’re most commonly used by donors when filing their taxes, as certain charitable donations can help reduce income taxes. Read on to find out everything you need to know about why, how and when to issue donation receipts.Ī donation receipt is a written acknowledgement that a donation has been made. So, what exactly are donation receipts and why are they so important? Sending them too late - or worse yet, not sending them at all - can result in some very dissatisfied donors who likely won’t be donating to your organization again. Having worked at several nonprofits in the past, I can say with certainty that donors take their donation receipts very seriously… and your organization should too. However, before you do, one crucial aspect to take into consideration is charitable donation receipts. You can set up a donation website and start fundraising. If that’s you, getting started isn’t difficult. Is your nonprofit organization looking to start accepting charitable donations? With the state of the world right now, many organizations are relying on donor support to continue delivering on their mission.