You’ve started your nonprofit, and it’s time to begin fundraising so you can accomplish your mission. Now, how do you go about doing that? As a tax-exempt organization, you must meet specific requirements when communicating with donors following a contribution. Even something as simple as sending a donor letter can be more challenging than you realize. Here’s what you need to know:

Always Send a Thank You Note

Your donors have unlimited options for how they can spend their money, but they’ve chosen to spend it on your cause. It’s important that all donors receive a thank you note as soon as possible following a donation.

Sending a thoughtful and well-written note to a donor immediately after receiving their gift is not only courteous but also a way to express that you value their support — in turn, this increases the likelihood of them donating again.

IRS Requirements

When your tax-exempt nonprofit receives a monetary or non-monetary gift over $250, the IRS requires you to send a formal “donor acknowledgment letter.”

While you do have the option of including a thank you note in the acknowledgment letter, we recommend sending them separately. Most nonprofits send a thank you note immediately after receiving a gift, then send all donor acknowledgment letters simultaneously later in the year. This is generally done before January 31st of the following year to coincide with tax season. 

The formal letter must include the following:

  • a statement declaring your nonprofit’s tax-exempt status as a 501c3;
  • your nonprofit’s legal name and employer identification number;
  • the donor’s name and the date the gift was received;
  • the gift amount (if monetary) or description (if non-monetary); and
  • any goods or services (such as a bumper sticker or free admittance to an event) provided in exchange for the donation and the associated monetary value, or a statement that no goods or services were provided in exchange for the donation if applicable.

Tips for a Successful Letter

Thank you notes and acknowledgment letters should be visually appealing and professional. Include a high-quality version of your nonprofit’s logo in the letterhead and make sure your return address is listed on the letter. Address the letter specifically to the donor instead of using a generic salutation like “Dear Friend,” and show the donor how helpful their contribution has been by including a few sentences explaining how the donation was used to help your nonprofit achieve its goals.

Although there are several important factors to consider when corresponding with donors, our team is here to help you through every step. Resilia’s Tax Exemption and Tax Exemption Plus plans come with an Essentials service designed to ensure nonprofit founders like you are following best practices and doing everything necessary to stay compliant with all government agencies. 

Schedule your free consultation today to learn more about how Resilia can help you!