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Acknowledging Gifts and Contributions

Knowing what to say in a gift acknowledgment can be tricky. The National Council of Nonprofits has developed a downloadable Tip Sheet on Saying Thank You to Donors to help you draft an appropriate ‘thank you’ for your donors.

IRS Publication 1771 is a helpful online guide for nonprofits and donors that provides assistance with the process of acknowledging gifts and contributions.

Acknowledging Gifts and Contributions

All gift acknowledgments should contain:

  • A statement that the nonprofit is a charity recognized as tax-exempt by the IRS under Section 501(c)(3);
  • Either (a) amount donated (if cash or cash equivalents); or (b) description of the property donated (the nonprofit should not attempt to assign the cash value of the property in your letter - that is the donor's responsibility);
  • The date the donation was received;
  • Either: (a) statement whether your organization provided any goods or services in return for the donation, such as, "No goods or services were received in return for this gift"; or
  • (b) if the gift was $75 or more and the nonprofit did provide something of more than insubstantial benefit in return for the gift, (such as tickets to a special event or a dinner), then the charity must include a good faith estimate of the value of the goods/services provided (such as the market value of tickets to the event or the actual cost of the dinner – even if it was donated to the charity).

In states where charitable registration regulations require a disclosure statement on written solicitations, be sure to include the disclosure statement on your acknowledgement (such as on written confirmations of pledges) if required. Read more about state charitable registration requirements.

Quid Pro Quo Gifts: As described above, when a donor contributes $75 or more and receives something of value in return, it is called a "quid pro quo" gift (which essentially means the donor received something in return for the donation). Read more about quid pro quo gift acknowledgments from the IRS website.

When Should an Acknowledgment be Sent?

Regardless of the regulations, donors expect to receive a ‘thank you’ for their contributions no matter the amount. Many fundraising professionals suggest sending the acknowledgment within a short period of time, which reassures the donor that the donation was received and boosts donor relations. Being prompt and making the message as personal as possible is most effective, especially when followed up by a report or personal message describing the difference the donor’s gift has made. It’s helpful to have a template ready to send out that can be customized as needed when donations arrive.

IRS regulations do, however, require that before a donor may claim a tax deduction for a charitable contribution the donor must have a bank record or a written communication from the charitable nonprofit. That requirement is why donors expect a nonprofit to provide a receipt for their contribution. According to the IRS regulations, the donor is responsible for obtaining the written gift acknowledgment for any single contribution of $250 or more (see IRS Publication 1771).

When a donor gives a contribution in excess of $75 and also receives something of value from the nonprofit in return (there is an exception for "token" gifts) the nonprofit is required to provide the donor with an explanation of the fair market value received in return for the donation. (The details are explained in the section on "quid pro quo" gifts below).

Tips and Examples

Read these tips on thanking donors from posts that originally appeared on the Chronicle of Philanthropy’s online fundraising forum:

"…I primarily do thank-you notes. I try to get other people involved. I get the board to write a thank-you note, the executive director or myself. Depending on what the gift was for determines who writes the note. Sometimes people enjoy and feel a little more special if the board president writes the thank you."

"I use various things to write the note on, including a current newsletter. If the newsletter features the program for which the donor gave money, I make sure they get that issue with a little note that says something like, "Thought you might want to see what your donation helped accomplish. Thanks!" …Sometimes, I just make a call and personally thank them and follow up with a note. … A hand-written note is the best."

"…You can never thank donors enough. We send articles from the paper, funny and/or interesting postcards, short notes on our personal stationery, whatever. However, a hand-written note should be personal, and not in any way like a form letter. I often send them for no reason. For example, to remember a donor who's working on a tough merger at work, or is waiting to hear of a child's acceptance to college, or looked beautiful at an event, or whatever - I send them a note!"

Additional Resources

The IRS website provides a comprehensive section on what it calls "gift substantiation" (documenting that a gift was received through the process of thanking donors for the gift), including: