Before you send off a formal donor thank you letter, check in with the Internal Revenue Service. The IRS has a few requirements for acknowledging contributions of $250 or more to nonprofits. Follow their guidelines, and your donors are all set to claim their tax benefits:  

Here’s what’s needed:

  • Include the date your donation was received.

  • State the amount of the gift.

    • If the gift isn’t cash, include a description of the object.

    • For a gift of stock, state the name of the stock, number of shares and date received. Leave it to the donor and their tax advisor to determine the value.

  • Clarify whether your organization was given any goods or services in return for the gift. If you did provide something like an event ticket or a meal, and the donation was greater than $75 then you need to include a good faith estimate of it’s value.  If it was a straight donation, include a statement like:  “No goods or services were received in exchange for this gift.”

  • State that your organization is recognized as tax-exempt by the IRS

Here is a basic example to get you started:

Dear Ms. Smith,

Thank you for your gift on October 18, 2016, of $2,000 in support of the Neighborhood Community Garden Annual Harvest event. Your gift makes it possible for us to provide nourishing, sustainable foods to the local community.

The Neighborhood Community Garden enriches our city’s food system by providing local families with fresh, local produce. Your support allows our organization to create a place where people of all ages can learn about sustainable farming, the positive impact that fresh organic foods have on our health, and the great joy of eating what you’ve grow.

Thank you again for your support. It means so much to all of us, but most importantly, to the people whose lives are impacted by our bountiful harvest. Your generosity helps us nourish the community is so many ways.

Sincerely,

Josh Green

Executive Director

The Neighborhood Community Garden is a tax-exempt organization as described in Section 501(c)(3) of the Internal Revenue Code; The IRS employer identification number is: 00-0000000.

The estimated value of the goods and services for your two event tickets is $200. Please retain this letter for your records.

Now that you’ve got the hang of how to write a formal donor thank you letter, check back next week for ideas on how to go beyond the IRS requirements and make sure your donors receive the appreciation they truly deserve.