Charitable Donation Receipts

Understanding Charitable Donation Receipts: What You Need to Know

If your organization depends on public donations, having a system to thank donors and provide timely receipts is crucial—not just for gratitude, but for tax purposes too! Here's a breakdown of key points to help your charity stay compliant and your donors informed.

Essential Information for Donations Over $250

The IRS has specific requirements for receipts acknowledging donations above $250. These must include:

• Charity Name: Clearly identify your organization.
• Donation Details:
  • The amount for cash donations
  • A description (not value) for non-cash contributions.
• Goods or Services Statement:
  • Indicate if no goods or services were provided.
  • If goods/services were provided, include a description and a good-faith estimate of their value.
  • Specify if the provided goods/services were purely intangible religious benefits.

Although not mandatory, it's good practice to include:

• Date of Donation: Shows the year for which the gift is tax-deductible
• Charity's EIN: Makes it easier for donors to file their taxes and prove that the gift was charitable.

Timing Matters!

• Receipts Before Filing: Donors must have their receipts before filing tax returns, so receipts for donations made in the prior year should be issued by January 31st.
• Key Date Considerations for end of year donations:
  • The date received by the charity is the date of the gift
  • For mailed donations: The postmark date determines the year of the gift.

Watch Out for Quid Pro Quo Donations

When donors receive something in return, the “quid pro quo” rule applies. For example, if a $100 gala ticket includes a $60 dinner, the tax-deductible portion is only $40. Make sure receipts specify these details.

Handling Non-Cash Donations

Non-cash donations, like furniture or equipment, also require receipts. However, it’s up to the donor to assign the item’s value—not the charity. Your receipt should simply describe the gift.

By following these guidelines, you’ll help your donors maximize their tax benefits while maintaining a professional, transparent approach to donations.