How to Make a Donation Receipt for Your Nonprofit

Donation receipts are formal documents issued by nonprofit organizations to acknowledge charitable contributions. These receipts serve a role in recognizing the generosity of donors and are an important part of maintaining transparent financial records for the organization. They act as official proof that a contribution has been received.

Key Information for Donation Receipts

A donation receipt must include specific information to be considered valid, particularly for tax purposes. The organization’s full legal name and its address should be clearly stated on the receipt. The Employer Identification Number (EIN) of the nonprofit is also a mandatory inclusion, as it identifies the organization to the Internal Revenue Service (IRS).

The receipt must specify the donor’s complete name and address, along with the exact date the contribution was received. For cash donations, the precise amount must be noted. If the contribution is non-cash, a detailed description of the donated property is required, but without assigning a monetary value, as the donor is typically responsible for valuing non-cash items.

A statement on every receipt, if applicable, confirms that no goods or services were provided by the organization in exchange for the contribution. Additionally, the receipt should include a statement affirming the organization’s qualified charitable status, indicating that contributions are tax-deductible to the extent allowed by law.

Receipts for Various Donation Types

For non-cash contributions, the receipt should provide a thorough description of the donated property. It is important for the nonprofit to describe the item but not to assign a value, as the donor is generally responsible for determining the fair market value of most non-cash donations for their tax records. For non-cash donations over $500, donors typically need to file IRS Form 8283.

When a donor receives something of value in return for their contribution, known as a “quid pro quo contribution,” the nonprofit must issue a specific disclosure statement if the payment exceeds $75. This statement must inform the donor that the tax-deductible portion of their contribution is limited to the amount that exceeds the fair market value of the goods or services received. The organization must also provide a good faith estimate of the value of those goods or services.

Vehicle donations have distinct requirements, particularly if the claimed value exceeds $500. If the organization sells the donated vehicle, the deduction for the donor is generally limited to the gross proceeds from the sale. The nonprofit must provide the donor with IRS Form 1098-C within 30 days of the sale, detailing the sale price.

Generating and Delivering Receipts

Nonprofits have several practical methods available for generating donation receipts efficiently. Many organizations utilize basic word processor templates or spreadsheet programs to create customized receipts, allowing for consistent formatting and easy data entry. Specialized donor management software or features within accounting software can automate the receipt generation process, pulling donor and donation details directly from their databases. This automation can significantly reduce administrative burden and potential errors.

Receipts should be provided to donors in a timely manner. For contributions of $250 or more, the IRS requires a contemporaneous written acknowledgment. This means the donor must have the receipt by the earlier of the date they file their tax return or the due date for filing that return, including extensions. Many nonprofits aim to send receipts within 24 to 48 hours of a donation, or by January 31st of the year following the donation.

Delivery methods can vary, with electronic delivery via email being a common option. Organizations can also send receipts through postal mail. Regardless of the delivery method, it is important for the nonprofit to maintain copies of all issued receipts for their own records and compliance purposes.