This is the time of year that many smaller charities send donation acknowledgement letters to contributors. IRS requires these letters as documentation of the contributions. It seems that larger charities send these at the time the donation is made while some smaller charities with fewer donor management capabilities wait until year end. This post is a reminder of the requirements and restrictions of that donation acknowledgment letter.
Cash contributions should definitely include amount. For example, “Thank you for your donation of $500”.
Non-cash contributions should name the contribution but not attempt to assign a dollar amount as a value. For example we might say “Thank you for your donation of five pallets of building supplies”. We can not say “Thanks for donating $500 worth of building materials”.
The letter should be addressed to the donor and include the name, address and ID number of the charity. If the charity is registered with the state, include that registration number as a best practice. The letter should be signed by an officer. Electronic signature is OK but a personal thank you note added to a manual officer signature is a great practice.
We have a template available on request that includes the other requirements in a donation acknowledgment letter.