Oftentimes in small organizations with limited staff, it’s a challenge just to get a tax receipt out the door, let alone within the recommended 24-48 hours after the receipt of the gift. Add to that another thank you letter/note/call to the donor to show gratitude for their gift and it’s easy for staff with limited time to feel overwhelmed.
But I guarantee it will be worth it. A donor may not remember getting a tax receipt, but they will remember a phone call (even if it’s just a voicemail), a text message, or a handwritten thank you note specifically acknowledging them for their gift.
You could save time by not sending tax receipts to all donors, but I don’t recommend that. Tax receipts are only required by the IRS for the following scenarios:
For donations of $250 or more
When a donor receives goods or services in exchange for a donation over $75
When a donor requests a receipt for their donation
Everywhere I’ve worked, we have sent tax receipts for all gifts – monetary and in-kind – because we’ve treated it as best practice, and we made it a priority in our work.
These two strategies – the tax receipt and the ‘thank you’ – should, ideally, be separate, but you could always combine them to save time.
A well-crafted thank-you letter should:
Feel warm, personal, and leave the donor with a positive feeling about their contribution.
Explain how their contribution will be used and, if possible, include an anecdote demonstrating the impact of their gift.
Include information about how to stay connected with the organization, such as volunteering or attending an upcoming event.
Be hand-signed whenever possible, and should include a special note for specific donor segments.
If you are incorporating tax-receipt language in the letter, in addition to the suggestions above, you should be sure to include:
Name of the organization that received the donation
A statement that the nonprofit is a public charity recognized as tax-exempt by the IRS under Section 501(c)(3)
Name of the donor
The date of the donation
Amount of cash contribution
Description (but not value) of any non-cash contribution (the nonprofit should not attempt to assign the cash value of property; doing so is the donor’s responsibility)
Amount of cryptocurrency or stock donation
A statement that no goods or services were provided by the organization (if applicable)
Description and good faith estimate of the value of goods or services, if any, that the organization provided in return for the contribution
A statement that the organization did not provide more than insubstantial goods or services in return for the donation, such as, “No goods or services were received in return for this gift”
When it comes to sending these thank you notes or letters, you have multiple options in today’s world of technology. Mailed letters and notes may have a higher chance of being opened because getting mail that’s not junk tends to get more attention than an email. However, electronic delivery (email) is cheaper and faster than printing and mailing (especially with today’s postage rates) and it can include links for future engagement.
To conclude, prioritize thanking your donors. However you choose to do it – through letters, notes, or calls – be sure to add it to your weekly to-do list and make it a priority. Your donors are what makes your work possible, so it’s important to keep them engaged.
If you need help developing good stewardship practices, I can help! I’m happy to brainstorm ideas that will work best for your organization and donor base, and work with you and your team to implement them so the process works for you!
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