written by: Alia Nikolakopulos•edited by: Doreen Martel•updated: 4/27/2011
If you receive donations for a charity you operate, use these helpful tips and sample letters to write your correspondence. These samples of thank you letters for donations contain information you should include for your donors to benefit from tax deductible gifts.
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All charities survive largely from charitable donations from members of the community. When you receive a donation, send a thank you letter for donation to the donor. This letter serves a dual purpose of thanking the contributor for his gift, and providing a receipt for tax purposes. The letter you send will vary depending on the character of the donor's gift. The samples of thank you letters for donations in this article outline special considerations for cash and non-cash donations.
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Regardless of whether your thank you letter for donation is for a cash or non-cash gift, you should write the letter on letterhead. Make sure your letterhead includes the address of your organization. If it doesn’t, incorporate the contact information into the header or footer of your stationery. Your donor will need this information for tax reporting purposes. In addition, include the type and value of the donation received as well as the date or dates of the donation.
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Purpose of Donation
While not necessary for the letter, it is common for charities to let donors know what the donation is used for. If your organization held a drive for cash or other donations for a specific purpose, let the donor know that her donation helped reach the goals for the event and who the gift will ultimately benefit. This gesture lets the donor know how appreciated the gift is and helps her feel emotionally attached to the project. If your organization holds continuous donation drives or specific events throughout the year, your donors are more likely to continue to contribute when they know where and who the gifts are helping.
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Non-cash donations include any gifts that aren’t monetary. Common types of non-cash donations include clothing, household items, non-perishable food and children’s toys. Other types of non-cash items may include gift certificates or cards from local merchants for free services. This type of donation is often offered for a raffle or similar event. For tax reporting purposes, a donor’s gift must be something that can be attached to market value. If you do not know the value of the item donated, conduct research so you can provide accurate information in your thank you letter for the donation. For example, if you receive clothing or household item donations, you can find values allowed by the IRS for the purpose of valuation from thrift stores such as ARC or the Salvation Army. For non-cash gifts, use this sample thank you letter for donations for tips on what your letter should include.
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If you receive monetary donations through your organization, you must provide a receipt to your donor. If multiple gifts were donated, it is best to itemize each donation by date and amount; however you may opt to provide an annual total instead. If the money received also provided the donor with a personal benefit, you must include a statement that indicates the amount of the gift that is tax deductible. The IRS does not allow taxpayers to deduct contributions from which personal benefit is received. For example, if your organization hosts a fundraising dinner and accepts $150 donations to attend the event, you must deduct the value of the meal from each contributor’s donation. In this scenario, if the value of the dinner is $40, $110 is a tax deductible donation. For cash gifts, use this sample thank you letter for donations for information to include in your letter.
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Step By Step Fundraising: Thank You Letter for Charitable Donations - http://stepbystepfundraising.com/thank-you-template/
Fundraiser Cyberzine: How to Write a Donation Thank-you Letter - http://www.fundsraiser.com/jan08/how-to-write-a-donation-thank-you-letter.html