Donations that are provided to a 501c3 are generally considered to be tax deductible. Although those making the donation can keep their own records about what was donated, having a written confirmation about the donation makes it easier for the organization and the individual to say in tax compliance every year. That’s why knowing how to write a 501c3 donation letter is so important.
A simple acknowledgment letter is all that is necessary to meet this obligation of receipt. It is structured as a business letter, so make sure it has the contact information for the organization and for the individual who made the donation. From there, a form letter can be designed so that all you’ll need to do is fill in the blanks. Make sure to include the date on the letter as well.
Start Off With a Thank You Note
Although it isn’t necessary, beginning the letter with a simple thank you about the donation in its specificity is a good way to get started. It provides information about what the actual donation happened to be while showing off some good manners. Consider having the first paragraph of your donation letter be something like this.
Thank you for your recent contribution of [fill in the blank] that was made to support [fill in the blank].
The first blank in this sentence can be used to mention a monetary donation or to itemize the donation of tangible goods. The second blank can be used to mention whatever earmark stipulations are on the donation. If someone donates to a roofing fund, for example, then the donation must be applied to that fund.
Advise the Individual To Keep the Letter
The second part of the letter is designed to let you inform the individual as to why it is being sent. You’re giving them confirmation about the donation so that it can be deductible for their tax records. Canceled checks have not been allowed as evidence of a donation for over two decades, so receipts or donation letters like these are necessary to prove it occurred.
Here is a good place to put a full description of any donated property. The donor is required to determine what the fair market value of the donated items happen to be based on a taxation chart that is provided by the IRS. An individual cannot claim that a kid’s sweater is worth $25. A specific value has already been assigned and this is the value that the customer can claim when filing taxes. The specific description of the item can help to make this task a little easier to accomplish.
Consider using this example for the body of the letter.
Please consider this as written confirmation of your donation. Keep this letter for your tax records. Your contribution is deductible only to the extent that is allowed by law. No goods or services were provided in exchange for this donation.
Then list the itemized donations. If the amount is less than $75, then this may not be necessary, but is still considered a best practice to prove that complete records are being kept.
Then Just Sign Off on the Letter
A final word of thanks is all that is necessary to sign off on the 501c3 donation letter. Tell the donor that you appreciate their gift and their support so that you can continue providing programs and services that benefit the common public good in your community.
Make sure to sign the name of the letter writer to the 501c3 donation letter. An actual signature is the best practice to follow here, though a copied signature is generally accepted. Scanning in a signature to apply to a form letter is usually the easiest way to mass produce these donation letters when a large amount of donations needs to be acknowledged.
If you have provided a receipt to the donor for their donation, even if it is tangible goods instead of money, then the 501c3 donation letter may not be necessary. When donations are mailed in or dropped off, however, this letter can give the donor the written confirmation they need for their taxes at the end of the year to make a claim. It can also help the 501c3 be able to show they can potentially meet the 33% public charity requirements for their classification.
Knowing how to write a 501c3 letter can help make sure all documentation obligations are met. Use these examples to create your own letter today.