While every donation to your organization is important and appreciated, there are certain times and ways that donations must be acknowledged to the donor.
And though there is not a specific due date for these acknowledgments, the IRS states that the acknowledgment must be received by the donor either before the date the donor files their federal income tax return or the due date, including extensions, for filing the donor’s return for that year, whichever is earlier. Best practice, though, is to either provide the acknowledgment at the time of the donation or by January 31st of the following year (i.e. 2024 for a 2023 donation)
For every charitable contribution of $250 or more, the IRS requires a written acknowledgment that contains:
- the name of your organization
- the dollar amount, if a cash contribution, or the description, but not value, of non-cash contributions
- statement that no goods or services were provided by your organization, if applicable. If goods or services were provided, then include a description and good faith estimate of their value for what the organization provided in return for the contribution.
Note: The IRS also requires that the donor maintain a record of any cash contribution they’re claiming as a deduction on their taxes, such as a bank statement or statement (letter or receipt) from the nonprofit organization.
In addition to the IRS requirements for donor acknowledgments, your state may have additional statements that need to be included. In Maryland, all written solicitations and receipts require a disclosure statement according to the Maryland Solicitations Act.
The following is an example of an acknowledgment and disclosure statement appropriate for a cash contribution, without an exchange of goods or services, to a Maryland charity (fill in <<bolded>> text accordingly). The highlighted text is specific for Maryland.
<<Org Name>> is a 501(c)(3) nonprofit organization (Tax ID <<#>>). Your contribution of $<<AMOUNT>> received on <<DATE>> is tax deductible to the extent allowed by law. No goods or services were provided in exchange for your donation. A copy of the current financial statement of <<Org Name>> is available by writing <<your address>> or by calling <<your phone number>>. Documents and information submitted under the Maryland Solicitations Act are also available, for the cost of postage and copies, from the Maryland Secretary of State, State House, Annapolis MD 21401, (410) 974-5534.
Please note, the information on this website does not constitute legal advice. It is provided for general information purposes only.