Nonprofits: Year-End Giving and Tax Receipts

Once the Jack-o-laterns have hit the trash bin and Thanksgiving menus and holiday gift lists have started to be written, people also start to think about where they will charitably give for the holiday season. Giving Tuesday (the Tuesday after Thanksgiving) unofficially starts a season of charitable giving, but donors start thinking about nonprofits, foundations, or other charities to give their dollars to well in advance.

Nonprofits that send their annual appeals at this time of year strive to send their materials around the last week of November, in hopes of receiving donations before the end of the calendar year.

Best practice is to send every donor a tax receipt to acknowledge their donation to your organization, and to send the receipt as promptly as possible. Federal law requires nonprofit organizations to send tax receipt for donors who give a donation of $75 (or valued at that amount). Regardless of the amount or the value of the donation, all receipts should include:

  • The organization name;
  • The amount of a cash contribution (if the donation something other than money, the donor assigns the value, not the nonprofit);
  • A description of the donation if it is something other than cash;
  • A statement that no goods or services were provided by the nonprofit in exchange for the donation (if that was the case);
  • The donor’s name;
  • The date of the donation, if known.

The last point is especially important: deductions may be disallowed if there is no date to prove when the donation is made. Since it is common for a check dated in December to be received by a nonprofit in January of the next year, it is imperative for nonprofit organizations to make sure to record the correct date on their tax receipts to donors.

An organization’s employer identification number (EIN) is not required to be included on its tax deduction receipts, although many organizations choose to include their EIN.

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