Donation receipts are important for a few reasons. The IRS requires nonprofits to send receipts for any charitable gift over $250, and we all know how critical it is to keep the IRS happy. But donors often expect receipts for gifts of any amount, and keeping them happy is a key part of inspiring them to give again.
Well-written donation receipts meet IRS requirements and make donors feel good about their gift. In this article, you’ll discover some do’s and don’ts to keep in mind as you create receipts that are IRS (and donor) approved—plus a series of receipt templates that you can download for free!
Here’s what’s included in this article:
- Why do you need a donation receipt?
- What to include in a donation receipt
- The do’s and don’ts of creating and sending donation receipts
- Donation receipt templates
Let’s get started!
Why Do You Need a Donation Receipt?
Nonprofit donation receipts make donors happy and are useful for your nonprofit. Donors use them as a confirmation that their gift was received; they’re important for anyone who wants to itemize their charitable giving when tax season rolls around.
At your organization, good donation receipt processes are an important part of staying compliant with IRS requirements. While you’re only legally required to send a donation receipt for gifts above $250, it’s best to send an individual receipt for every donation.
Your donation receipts need to include transaction details, but they provide lots of opportunities to delight your donors, too. In addition to the information about someone’s gift, you can add thank-you messaging, impact statements, and pictures that reiterate their connection to your cause. When you add those elements, your receipt will cover your legal obligations and sustain the feel-good emotions people experience when they give to charity.
What to Include in a Donation Receipt
What information should be included in a donation receipt? Let’s take a look at both the legally-required transaction details and the optional content you can build into your receipt.
IRS-Required Transaction Details
First, let’s talk about the practical information you need to include in your receipt. According to the IRS website:
The written acknowledgment required to substantiate a charitable contribution of $250 or more must contain the following information:
- Name of the organization;
- Amount of cash contribution;
- Description (but not value) of non-cash contribution;
- Statement that no goods or services were provided by the organization, if that is the case;
- Description and good faith estimate of the value of goods or services, if any, that organization provided in return for the contribution; and
- Statement that goods or services, if any, that the organization provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case.
In addition, a donor may claim a deduction for contributions of cash, check, or other monetary gifts only if the donor maintains certain written records.
Let’s expand on that last bullet point about goods and services. In order for a donation to remain tax deductible, no goods or services can be exchanged for the donation amount. For example, event tickets, purchases from your online store, and raffle ticket purchases are not tax deductible.
You may encounter instances where a donor’s transaction includes both a purchase and a donation. For example: Say a donor buys a $40 ticket to your upcoming event. They also add a $10 donation in addition to the ticket price. Their total is $50, but only $10 is tax deductible. If you find yourself in a situation where donors can make a purchase and a donation in the same transaction, you may want to create a dedicated receipt for that event. Then, include a note about the tax deductibility of their gift.
Many online fundraising platforms—including Neon CRM and other Neon One products—automate this process. Our platform will automatically populate your donation receipts with each donor’s transaction details, which means you don’t have to worry about staying up to date on IRS requirements.
Thank-You Messaging and Impact Statements
Your online fundraising platform automatically sends receipts to your donors. Make the most of them! Adding some thoughtful content to your receipt can transform it from a humdrum transactional email to a heartwarming message that sets the stage for future engagement.
- A high-quality image that reminds your donor why they decided to give in the first place. If your receipt’s image contains the same subject, branding, or overall tone as the images you used in your appeal or on your donation form, that’s even better.
- Thank-you messaging that celebrates your donor’s generosity and welcomes them to your community of supporters.
- Some language around how your donor’s gift will make a difference. Try sharing a success story from one of your clients and tell your donor that their generosity will result in similar outcomes. Or share some details about an upcoming program or initiative and include some details about how your donor’s support will make it possible.
If you plan on following up with a standalone thank-you letter (which we highly recommend you do), let your donor know you’ll be in touch over the next few days. They’ll be more likely to read any future communications when they’re expecting them.
Donors that are brand-new to your organization may benefit from more than a single email. Combining a thank-you letter with a welcome email series can be a great way to start building a relationship with new supporters!
The Do’s & Don’ts of Creating and Sending Donation Receipts
Make the most of your donation receipts by following these simple best practices.
DO: Keep the Formatting Simple
Your donors should be able to scan their receipt and quickly identify the information they need. This includes their donation amount, your organization’s name, the date they made a gift, and their payment method. If you’ve chosen to include images and copy at the top of your receipt, make sure you include a note that their transaction details are listed below.
DON’T: Forget About Donations of Goods and Services
Sending receipts for in-kind donations is harder than sending receipts for online gifts, but it’s still important. Staying consistent with your receipting practices shows that you appreciate in-kind gifts just as much as cash donations.
Donations of goods—such as vehicles or clothes—and services require a donation receipt if the value exceeds $250. It’s your donor’s responsibility to provide an estimation of their donation’s value. As a courtesy, your organization should acknowledge that value in your receipt.
DO: Make Use of Automations
Automated receipting is a standard feature in many nonprofit software systems, and it can be a game changer when it comes to staying on top of your receipting process.
When you automate your receipt generation, you also standardize the look and feel of your receipts. This kind of consistency can make life much easier for your donors who give multiple times a year!
DON’T: Forget to Say “Thank You”
A donation receipt doesn’t take the place of a well-written thank-you, but it is a great opportunity to celebrate your donor’s generosity. Add a few sentences thanking them for their support, and let them know the kind of impact they’ve made possible with their gift. Keep this section relatively short: You’ll want to send a more substantive thank-you letter. Here’s why.
According to NonprofitHub, first-time donors who get a personalized thank-you letter within 48 hours of their gift are four times more likely to give a second gift. You can learn more about thank-you letters by reading our article on how to write the perfect donation thank-you letter.
DO: Remember to Send Out Year-End Donation Receipts
It’s common practice for nonprofits to send a summary of all a donor’s gifts at the end of the year. A recurring donor, for example, would receive a receipt after each gift, and they’d also receive a statement of all their giving activity for the year. If you’ve automated your receipting process and send gift acknowledgments directly after someone makes a gift, you’re not technically required to send a year-end letter. That said, doing so can be a great way to celebrate your relationship with donors who have given multiple times in the past year.
You should send your year-end receipts in early January. That way, they’ll reflect the donor’s activities in the previous year in their entirety. Nearly a third of giving happens in December, so sending year-end summaries earlier can result in some gifts being missed.
These Templates Will Help You Build Your Donation Receipts
Writing a donation receipt from scratch is a big task, but these templates will get you started. We’ve included templates for standard donation receipts, event registrations, and other common nonprofit transactions. Each template also includes a fundraising tip that will make your receipts even more effective! Download the individual templates you want, or click the button below to download all of them at once.
One-Time Donation Receipt Template
One-time gifts are the most common type of donation. Use this template to build high-impact receipts for each of your campaigns. Who knows? That one-time donor may go on to be a loyal supporter of your cause.
Event Registration Receipt Template
Your supporters will look to their registration receipts for important event information. Take advantage of their interest! Add a sentence or two about the work they’ll support with their participation.
Recurring Gift Creation Receipt Template
Recurring donors are a fundraiser’s best friend. Celebrate their ongoing generosity with a receipt that goes into detail about what their gift will achieve. This is also a great opportunity to ask your donor to share a little about themselves by answering a quick survey.
Recurring Gift Processed Receipt Template
When someone creates a recurring donation, they’ll receive an email every time that gift is processed. Keep your receipts fresh by periodically updating them to reference the work your sustaining donors made possible that month. A simple sentence or two can be plenty, especially if you send targeted communications to your recurring supporters.
Pledge Creation Receipt Template
Pledges are often a handy option for donors who want to give a significant gift but need to split their donation into a few installments. When someone creates a pledge, take the time to celebrate their generosity. Remind them what work they’ll make possible and share some information about the tangible outcome of their donation.
Pledge Processing Receipt Template
Every time you process an installment of a donor’s pledge, they’re one step closer to fulfilling their goal of giving you a big-impact gift. In your receipt, make a note of how much left of their original gift amount and thank them for their ongoing support.
New Membership Receipt
Get your newest member excited about your program by including information about their membership perks. If possible, give them a little information about next steps they might enjoy, like an upcoming members-only event or ways to connect with other members in your community.
Membership Renewal Receipt Template
You reminded your member about your program perks when they enrolled the first time. Remind them when they renew, too! This is a great opportunity to reiterate the value of being a member, especially if you have new or overlooked perks you want to emphasize.
Writing Great Donation Receipts Can Make a Big Impact
A good donation receipt does two jobs. It fulfills a practical need for both you and your donors: It ensures you send IRS-required acknowledgements to your supporters, and it’s a great way to make them feel great about supporting your cause. When you combine your donor’s transaction details with a great image and some thoughtfully-written content, you’ve got a practical receipt that sets the stage for donor engagement in the future.
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