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Donor Gift Receipts: IRS Substantiation Requirements

With the end of the year approaching, many not-for-profits see an increase in giving. Therefore, we thought it would be helpful to provide a brief summary of donors’ documentation requirements for tax-deductible gifts and what not-for-profits can provide to donors to assist in fulfilling these requirements.

The Internal Revenue Service has provided documentation requirements for charitable contributions.  According to IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements, a not-for-profit is required to provide a written disclosure to a donor who receives goods or services in exchange for a single payment in excess of $75.  Additionally, while a not-for-profit that does not acknowledge a contribution incurs no penalty, a donor cannot claim the tax deduction for any single contribution of $250 or more without such acknowledgment. Although it is the donor’s responsibility to obtain the acknowledgment, the not-for-profit can assist the donor by providing a written statement containing the following:

  • The name of the not-for-profit
  • The amount of cash contribution
  • A description (but not the value) of a non-cash contribution
  • A statement that no goods or services were provided by the not-for-profit in return for the contribution, in such cases
  • A description and good faith estimate of the value of goods or services, if any, that a not-for-profit provided in return for the contribution
  • A statement that goods or services, if any, that a not-for-profit provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case

A separate acknowledgment may be provided for each single contribution of $250 or more, or one acknowledgment, such as an annual summary, may be used to substantiate several single contributions of $250 or more.  The acknowledgment can either be provided in paper or via email.

If you have questions about what gift receipts your organization should be providing to its donors, please contact Chris Mickelson (cmickelson@blueandco.com) or your local Blue & Co. advisor.

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