Posted by Emily Schmidt, CPA
There is a German proverb that goes, “He who saves in little things, can be liberal in great ones.” When you think about it, this proverb speaks to the nature of budgeting for nonprofits. Are you looking for a way to save a little money on administrative costs and, consequently, increase budgeted funds for your charitable mission? If so, your nonprofit should definitely consider sending contribution acknowledgments to your donors electronically.
Per the IRS, a written and contemporaneous acknowledgment of any contribution of $250 or more is required to be received by a donor by the time they file their individual return, and subsequently, retained by the donor in order to take a charitable deduction. The acknowledgments you send to donors should contain the name of your organization and the amount and date of the contribution. Finally, the acknowledgment should contain the phrasing “no goods or services were provided in exchange for your contribution,” if applicable. Otherwise, a description and an estimate of the value of the goods or services provided to the donor in return for the contribution should be included.
Did you know donation acknowledgments do not necessarily have to be provided as a hard copy? Your nonprofit is also permitted to send contemporaneous acknowledgments electronically via email.
You should not minimize the benefits of delivering acknowledgments by means of email. Your organization would no longer have to pay for paper, ink, stamps and envelopes that would have been used every time you had sent these types of communications through the mail. Furthermore, you could feel content knowing your nonprofit’s reduced paper usage would help save environmental resources.
In addition to saving money, you could streamline your acknowledgment process and ensure your donors receive contribution confirmations promptly. You would have the option to create a template attachment acknowledgment along with a personalized message which could be sent with the click of a button. Your donors would surely be grateful to receive your acknowledgment in a timely manner so they might readily claim the appropriate charitable deduction on their Form 1040.
If you would like to add more time to your day and money to your mission, your organization should consider taking advantage of delivering contribution acknowledgements electronically. Your donors and your budget will thank you for it.