It’s ‘Giving Tuesday,’ is Your Nonprofit Helping Your Donors Claim Their Gift?
We’re seeing a lot of media focus on #GivingTuesday today and we hope your religious or nonprofit organization is benefiting from the added attention. We also hope you’re making time to take care of your donors for their tax purposes.
Even the IRS agrees it’s better to given than to receive—it gives your donors a tax break for their generosity. Even better news: whether your donors feel moved by the spirit of the season or the looming year-end tax deadline, your organization’s charitable contributions will likely increase before the year end.
With so many worthy causes to choose from, make sure your donors keep your nonprofit in mind for future donations by providing timely and proper proof of donations to support their tax deduction for the year.
The IRS imposes several rules for claiming a deduction for charitable gifts:
- Donations must be in the form of cash or property;
- Donations must be made to a qualified tax-exempt organization;
- Religious organizations aren’t required to obtain 501(c)(3) status from the IRS since they count as qualified charities regardless, as do trusts and non-profit volunteer fire companies;
- Donors must provide a letter of acknowledgment or receipt for each gift;
- The IRS can disallow charitable donations of $250 or more if your contributor doesn’t have proper documentation for each donation greater than $250 or a donation list detailing dates of each gift.
Don’t risk annoying your donors—and potentially losing future funding sources—by failing to provide contemporaneous substantiation of gifts. For tax purposes, provide each contributor with a letter including their name, address and amount of the gift.
Of course, the best way to show appreciation to your benefactors remains the old-fashioned way…a hand-written thank you note, expressing your heart-felt gratitude for their continued support.
Good donor relations proves essential in encouraging philanthropists to support your mission or ministry. Keep them happy by doing your part in documenting their contributions properly and timely.
If you need more accounting or management information, contact our passionate nonprofit staff at Online Stewardship Accounting & Consulting, 904-398-4747 or Lynn@OnlineStewardship.com.
Thank you for helping people find the info they need. Great stuff as always. Keep up the great work!!!