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Donation Receipts & Statements: A Nonprofit Guide (Including Templates)

So, a donation just came in, and you need to acknowledge the donation by sending a donation receipt letter, or the end of the year has rolled around, and it’s time to get busy generating year end receipts and statements. 

Don’t stress out, here’s everything you need to know, including official US and Canadian donation receipt requirements, and templates!

Nonprofit-donation-receipts-guide

We’ll cover:  

What are Charitable Donation Receipts?

Putting it simply, a nonprofit donation receipt is a formal acknowledgement that a donation was made to your organization. It is often presented to donors as a letter or email after the donation is received. 

When to Issue Donation Receipts

Receipts can be issued for in-kind or monetary donations and sent in monthly, yearly or ad hoc statements. 

The IRS requires a donation receipt in the following cases: 

  • Single donations over $250
  • If a donor specifically requests for a donation receipt 
  • If a donor receives goods or services in exchange for a donation over $75 (calculate your donation receipt value for such transactions here)
  • For non-monetary donations valued over $5,000, the item will need to be appraised by a professional to give tax benefits to donors. 

While there is no legal requirement for you to send a donation receipt for gifts below $250, it is good practice and most nonprofits send acknowledgements for every donation.

Did you know donors are more likely to give again if their donations are acknowledged within the first 48 hours? This is why it pay to have a nonprofit CRM like Sumac that automates the sending of donation receipt letters.

Failing to send prompt donation receipts can leave donors feeling forgotten, and unsure whether their donation was received – especially with online donations.

What a Donation Receipt Letter Template Looks Like

 
 

official-donation-receipt-template

Here is an example of a donation receipt from the Canada Revenue Agency. Your nonprofit donation receipt letter template must include the following items:

  1. The legal name of your charity with an official address and your charitable registration number. (In the US this is not mandated, but is considered good practice to include) 
  2. A unique serialized ID or receipt number to help you keep track of donations 
  3. Signing authority at your organization, this could be your Executive Director or CEO   

nonprofit-donation-receipt-sample

 

Here’s an example of a donation receipt with an advantage included. An advantage is something a donor receives in exchange for a donation – the most common example being merchandise such as t-shirts or keychains. 

When adding an advantage to your donation receipt, you must subtract the value of the advantage from the donation amount. 

Use our donation receipt value calculator to easily determine the eligible amount of the gift.

receipt-value-calculator

What Should Donation Receipts Include?

 

Tax-deductible donation receipts must follow IRS guidelines, but many nonprofits issue both informal receipts and official ones. It’s important to know what counts as a donation tax receipt and what doesn’t.

Only registered charities or foundations – (501(c)(3) organizations in the United States – are able to issue tax-deductible donation receipts. 

Nonprofit donation receipt requirements differ for every country, so check with your official government website to make sure you are fully compliant. If you’re based in the US or Canada, use our donation receipt requirements chart below.  

You can also check out the official guidelines for the United States, Canada and Australia

Donation Receipt Requirements – US and Canada

Year End Receipts

Receipts or written acknowledgments required to substantiate a charitable contribution must contain certain information. Here’s what must be included for receipts issued in both the U.S. and Canada:

Requirements for the U.S.Requirements for Canada
  • Name of organization
  • Amount of cash contribution
  • Description (but not the value) of non-cash contribution
  • Statement that no goods or services were provided by the organization in return for the contribution, if that was the case
  • Description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution
  • Statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits (described later in this publication), if that was the case
  • If your organization provided intangible religious benefits make sure you include a sentence that states this.
  • EIN number (while not legally required it’s helpful as donors need this for their taxes)

Source: IRS – Charitable Contributions: Substantiation and Disclosure Requirements

  • A statement that it is an official receipt for income tax purposes;
  • Name and address of the charity as on file with the Canada Revenue Agency;
  • Charity’s registration number;
  • Serial number of the receipt;
  • Place or locality where the receipt was issued;
  • Day or year donation was received;
  • Day on which the receipt was issued if it differs from the day of donation;
  • Full name, including middle initial, and address of the donor;
  • Amount of the gift;
  • Value and description of any advantage received by the donor;
  • Eligible amount of the gift;
  • Signature of an individual authorized by the charity to acknowledge donations; and
  • Name and Web site address of the Canada Revenue Agency – CRA.

Source: CRA – Operating a Registered Charity: Issuing Receipts

Don’t forget to include a short thank you note with your year end receipts.

Donation Receipt Templates

 We recommend creating donation receipt templates for your nonprofit as this will make sure you include all required information and can process your donation receipts faster. 
 

Sample 501c3 Donation Receipt Templates:

Donation Receipt Template - PDF

Click Image to download.

Donation Receipt Template - Word Doc

Click Image to download.

501c3 Donation Receipt Template - Email

Click Image to download.

Monthly Donation Acknowledgement Email - Doc

Click Image to download.

Types of Nonprofit Donation Receipt Letters

  • Charitable Donation Receipt: This is a standard donation receipt informing donors that their money has been received.
  • In-Kind Donation Receipt: You’ll need to write an in-kind donation receipt for donations of goods and services. The value of these gifts must be determined by the donor or a professional appraiser. Gifts of time or service don’t hold a dollar value and aren’t eligible for receipts.
  • Cash Donation Receipt: Gifts of cash also require donation receipts. This provides your nonprofit with written evidence of the cash and can be used by donors to deduct the amount from their taxable income.
  • Stock Gift Donation Receipt: This donation receipt should include details of the gift of stock shares of a company – including number of shares and name of the company (but not the dollar equivalent of the shares).

Benefits of a 501c3 Donation Receipt

Donation receipts are financially important to donors. Charitable organizations, classified as 501(c)(3) organizations in the US, enable donors to claim tax benefits on their donations – but need a 501c3 donation receipt as proof. 

If your nonprofit is a registered charity (i.e exempt from tax), donors can claim tax benefits by presenting their donation receipts to the IRS, so it’s important you issue them correctly and on time.  

 

For smaller nonprofits pressed for time, it’s tempting to ignore donation receipts until the very last minute, or think of them as a compliance issue, but donation receipt letters are important. 

Not only are they required as evidence of a donor’s contribution to your nonprofit, but they give you an opportunity to express gratitude, which is crucial to establishing great relationships with your donors (Pssst. don’t forget to send a thank you note along with your donation receipt. Learn how to write a great thank you letter). 

Besides tax saving, here are the benefits of issuing 501c3 donation receipts:   

For donors:

  • Helps donors receive beneficial tax deductions on their income for the year 
  • Donation receipts serve as a written record of their contribution and confirms you have received their donation
  • Helps donors keep track of their finances 

For your nonprofit:

  • Customized, prompt and well-designed donation receipts can help you establish good relationships with your donors and keep them engaged
  • 501c3 donation receipts can also induce donors to give (or give more) – so make sure they’re aware of your nonprofit status.
  • Donation receipts are a good opportunity to thank donors and make them feel appreciated – which encourages future giving
  • Helps keep track of donors’ giving history with your organization so you can customize asks in the future
  • Helps you keep accurate financial records. Having a clear sense of yearly donations (and their source) can also help set targeted fundraising goals and forecast expected revenue 
  • Legal compliance: The IRS requires donation receipts for most donations. Failure to issue receipts can incur a penalty of $10 per donation and go to $5,000 for a specific campaign.

Benefits of an Automated Donation Receipt Process

If you have a large volume of individual donations coming in throughout the year, automating the donation receipt process might be a good idea. 

For example, Sumac’s donor management system personalizes and sends donation receipts right after a donation and at the end of the year. Benefits of automation include:  

  • Consolidated database of all donors and donation amounts 
  • Customized templates for different types of donations 
  • Populates automated yearly statements to help donors with end-of-year taxes
  • Creates personalized donation receipt letters 
  • Saves you and your team valuable time and reduces chances of error 

Year-End Donation Receipt Statements

If your organization issues receipts after each donation, then you may not have to send anything at the end of the year, but it’s still not a bad idea.

An end of year statement is a simple letter that reminds donors what they contributed over the year. It makes it easier for donors to organize their records and get ready to file taxes without the hassle of searching for multiple single donation receipts. 

It’s really easy to produce with a good donor management system and it’s just one more opportunity to thank them for their support.

Pro-tip: Send year-end donation receipts before January 31st to give donors time to process their taxes! 

A year end statement can be as simple as this:

Dear [name],

We are so grateful for your support throughout [year].

Here is a summary of your contributions:

[optionally, list details of each donation]

Total contributions for [year] = [amount]

Thank you!

Here’s to continuing to make great things happen in [next year].

Sincerely,

[signature of someone with authority]

 

Types of Nonprofit Donation Receipt Letters

 
  • Charitable Donation Receipt: This is a standard donation receipt informing donors that their money has been received.
  • In-Kind Donation Receipt: You’ll need to write an in-kind donation receipt for donations of goods and services. The value of these gifts must be determined by the donor or a professional appraiser. Gifts of time or service don’t hold a dollar value and aren’t eligible for receipts.
  • Cash Donation Receipt: Gifts of cash also require donation receipts. This provides your nonprofit with written evidence of the cash and can be used by donors to deduct the amount from their taxable income.
  • Stock Gift Donation Receipt: This donation receipt should include details of the gift of stock shares of a company – including number of shares and name of the company (but not the dollar equivalent of the shares).

Creating Templates

Now that you know what to include in your year end donation statements and receipts, you can create a template.

Your nonprofit database should allow you to define what information to include and where it goes, so if you need to show the original pledge amount along with what’s been donated, or add a statement like “no goods or services were provided by the organization in return for the contribution”, you can do that

And if you want the address to show through a window envelope, you can do that too.

Once you’ve got the template done, you’ll just need to select your donors, do a mail merge and then print or email. Be sure to set the date range for donations made between January 1st, and December 31st.

If you use Sumac, here are some donation receipt templates for both the U.S. And Canada. If you send paper receipts, you can generate them as word processing documents, then print them. If you want to send electronic receipts, on the other hand, you can generate them as unchangeable PDF documents, which satisfy government requirements for electronic receipting.

Donation Receipts for Payroll Giving

Many organizations offer their employees the opportunity to give monthly directly from their paychecks. Since the money is automatically debited from a donors account you do not need to issue a donation receipt letter for this. Donors can simply use their pay slip (W-2 Wage & Tax Statement form) as a donation receipt equivalent. 

Pro-tips for Creating Donation Receipt Letters

 
  1. Make it personal: Mention your donor’s name in your donation receipt! Instead of sending a separate thank you letter – see if you can create a 501c3 donation receipt template that includes both IRS required elements along with a personal note. 
  1. Set a threshold for donation receipt letters: If you’re unable to automate this process yet, set a threshold for receipting. For example, you can decide to send donation receipts only for amounts higher than $20. (Ideally, everyone should get a receipt and a thank you!)
  1. Send annual donation receipts: As stated earlier, an annual summary of donations will make it easier for donors – and their appreciation could take the form of more donations! 
  1. Use donation receipts as an opportunity to engage donors: Donation receipts are an opportunity to communicate with your donors – try including a note that highlights the impact of their gift and makes them feel valued and appreciated. Don’t ask for anything more – this is the time to say thank you! 
  1. Store and organize donation receipts carefully: Make sure your data is well organised and backed up – download copies of all receipts if you’re using a cloud-based system. Give donation receipts a unique number or ID to help you find them easily. 
  1. Keep your team informed: Make donation acceptance policies transparent to team members and donors. Conduct a session on the rules of correct receipting and communicate any changes regularly.
  1. Don’t tell donors they’ll save on tax: Stating that donations are exempt from tax on 501c3 donation receipt templates might backfire, as this depends on an individual’s tax bracket. If you wish to include such a statement, make sure it clearly states donations may be eligible for tax benefits.

Whether you’re using a CRM, donation management software or a spreadsheet, we’re sure you’ll be able to process those donation receipts quickly and easily. Don’t forget to familiarize yourself with nonprofit donation receipt requirements in your country before creating your donation receipt templates!

Once you’ve figured out your process you’ll be able to focus more on fundraising campaigns and activities that keep your donations rolling in! 

About the AuthorSumac is part of the Silent Partner Software family, a company dedicated to providing exception software and services to nonprofits. With over 25 years of service, Silent Partner has helped organizations manage over 3 million donors and contacts across the US, Canada, UK, and Europe. Learn more.

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