- Who We Are
- What We Do
- Executive Directors Guide
- Annual Report
- Inclusion Initiative
- Nonprofit Compensation Survey
- Funding Learning Networks For Community Impact
- Shared Services Guide
- Sabbatical Study
- Guide to Achieving Diversity and Inclusion for Nonprofits
- White Paper on Fiscal Sponsorship
- Brochures and Fact Sheets
- TSNE Newsletters
- Nonprofit Jobs
A Refresher on Receiving Donations
By Kay Snowden
Kay Snowden reminds TSNe-Bulletin readers about the basics of accepting donations as the end of the calendar year approaches. Kay has been at TSNE since 1998 and currently serves as program director for TSNE’s Fiscal Sponsorship Program.
Many organizations are planning their year-end appeals. A prompt acknowledgement of the donation is good practice for your organization. In addition, you need to be sure you comply with IRS requirements in order for your donors to be able to claim tax deductions. Here’s a refresher on what the IRS requires:
Your acknowledgement letter should include:
You can simply state, “No goods or services were provided in return for this contribution” if that is the case. If you provided goods and services, you need to:
Reporting to the IRS
The responsibility for reporting gifts to the IRS falls entirely on the donors. You have no reporting requirements, other than to recognize the revenue on your financial statements.
When It Gets Complicated
More Articles by Kay Snowden
Fortunately, the process is quite straightforward for most cash donations. Some factors may make your acknowledgements more complicated; for example, if you receive gifts of securities, if you receive in-kind donations (e.g., used computer equipment), and when you provide goods and services that aren’t easily valued, or are “insubstantial.”
The challenge in most of these cases has to do with determining value and, in some cases, establishing the date of the gift. This is where that old disclaimer, “consult your tax accountant”, comes into play. The IRS has some user-friendly information on their website. Also see IRS Publication 1771 for more detail and examples, including draft wording – it’s clearly written and very useful.
Want to be kept up-to-date on our latest articles? Sign up for the TSNe-Bulletin, a monthly e-newsletter providing tips and ideas to help you strengthen your nonprofit’s impact with and for the communities you serve.