Nonprofit Donation Receipt Glossary and FAQ Hub
Plain-English definitions of the terms that show up in receipting, substantiation, and donor records, followed by answers to the questions nonprofits ask most.
- Acknowledgment letter
- The written thank-you a nonprofit sends after receiving a gift. When it contains the elements required by the IRS, it also serves as the donor's substantiation for a deduction, which is why the terms acknowledgment and receipt are often used interchangeably.
- Annual giving statement
- A consolidated document, usually sent in January, that lists every gift a donor made during the prior calendar year with dates, amounts, and a total. The IRS accepts a periodic statement of this kind as substantiation as long as each contribution is listed separately and the required language is present.
- Charitable solicitation registration
- A state-level requirement, in force in many states, that a nonprofit register with a state agency before asking that state's residents for donations. Some states also require a specific disclosure sentence on solicitations and receipts, so check the rules for each state where you raise money.
- Contemporaneous written acknowledgment
- The IRS term for the receipt a donor must have in order to deduct a single gift of $250 or more. Contemporaneous means the donor receives it by the earlier of the date they file their return or the due date of that return including extensions.
- Deductible amount
- The portion of a payment a donor may claim as a charitable contribution. For a pure gift it is the full amount; for a payment that included goods or services, it is the payment minus the fair market value of what the donor received.
- Donor record
- The single entry in your database that represents one legal giver, whether an individual, a couple, a business, a foundation, or a fund sponsor. Every gift should attach to exactly one donor record, and each giver should have exactly one record, which is the foundation for accurate statements.
- Donor-advised fund (DAF)
- A giving account held at a sponsoring organization, from which the account holder recommends grants to charities. The donor's deduction occurs when they fund the account, not when the grant arrives, so a nonprofit should thank the individual but should not describe the grant as their deductible gift.
- EIN
- Employer Identification Number, the nine-digit federal tax ID assigned to your organization. It is not strictly required on a receipt by the federal substantiation rules, but donors and tax preparers expect it and including it removes any doubt about which organization issued the document.
- Fair market value
- The price at which property or a service would change hands between a willing buyer and a willing seller, neither under compulsion. Nonprofits use a good faith estimate of fair market value to describe benefits given to donors; they do not assign fair market value to noncash gifts received.
- Form 1098-C
- The IRS form a nonprofit provides to a donor who contributes a motor vehicle, boat, or airplane when the claimed value exceeds $500. It reports what the organization did with the vehicle, which affects how much the donor can deduct.
- Form 8282
- The donee information return a nonprofit must file if it sells, exchanges, or otherwise disposes of donated property within three years of receiving it, when that property was reported by the donor on Form 8283 above the relevant threshold.
- Form 8283
- The IRS form a donor files to claim noncash charitable contributions when their total noncash deductions for the year exceed $500. For higher-value items the form requires a qualified appraisal and a signature from the receiving organization acknowledging receipt, not value.
- Gift date
- The date a contribution is considered made for tax purposes. For a mailed check it is generally the postmark date; for a card payment it is the date the charge is made; for stock it is the date the shares are transferred. The gift date determines which tax year the contribution belongs to.
- Goods or services statement
- The sentence on a receipt stating whether the organization provided anything of value in exchange for the gift. It is required on every acknowledgment for gifts of $250 or more, even when the answer is that nothing was provided.
- Hard credit and soft credit
- Hard credit records the legal giver whose name goes on the receipt. Soft credit records another party who influenced or is associated with the gift, such as the individual behind a DAF grant or a spouse, so they can be thanked and reported on without receiving a tax receipt.
- In-kind donation
- A noncash gift of goods, property, or, in some cases, services. Goods and property may be deductible by the donor at their fair market value, subject to limits; donated services are not deductible, though related out-of-pocket expenses may be. The receipt describes the item and never states a value.
- Insubstantial benefit
- A small thank-you item, such as a mug or tote bag bearing the organization's name, that falls under dollar thresholds the IRS adjusts annually. Benefits that qualify as insubstantial can be disregarded on the receipt, which is why the donor may still deduct the full gift.
- Intangible religious benefit
- A benefit provided by an organization operated exclusively for religious purposes that is not generally sold in commercial transactions, such as admission to a worship service. When this is the only benefit provided, the receipt must say so rather than describe and value it.
- Itemized deduction
- A deduction claimed on Schedule A of the federal return in place of the standard deduction. Historically, charitable gifts reduced taxes only for donors who itemized; recent federal changes add a limited deduction for certain non-itemizers, so receipt requests may come from a broader group of donors.
- Matching gift
- A contribution made by an employer or other entity that matches an employee's gift. The matching entity is the legal giver of the match and receives its own receipt; the employee is typically soft credited for the match on their record.
- Merge field
- A placeholder in a letter template, such as the donor's name or a gift total, that is filled from a data source when statements are generated. Mismatched merge fields are one of the most common causes of wrong names and wrong totals on receipts.
- Pledge
- A promise to give a specified amount in the future, often in installments. A pledge is not a contribution until it is paid, so receipts are issued for each payment as it arrives rather than for the pledge itself.
- Public charity
- An organization recognized by the IRS as tax-exempt under section 501(c)(3) that receives broad public support, as distinct from a private foundation. Gifts to public charities are generally deductible, and most of the receipting rules discussed on this site apply to them.
- Qualified appraisal
- An independent valuation by a qualified appraiser that a donor must obtain for most noncash gifts valued above $5,000, with exceptions such as publicly traded securities. The appraisal is the donor's obligation, not the nonprofit's, though the nonprofit signs the donor's Form 8283 to confirm receipt.
- Qualified charitable distribution (QCD)
- A direct transfer from an individual retirement account to a charity by an owner who has reached the eligible age. The amount is excluded from the donor's income rather than deducted, but the donor still needs a written acknowledgment confirming that no goods or services were provided.
- Quid pro quo contribution
- A payment made partly as a contribution and partly in exchange for goods or services, such as a gala ticket that includes dinner. For any such payment over $75, the organization must provide a written disclosure describing the benefit and stating its good faith value, and the deductible amount is the excess.
- Recurring gift
- A contribution that repeats automatically on a schedule, usually monthly. Each installment is a separate gift with its own date and should appear as its own line on the annual statement rather than being collapsed into a yearly total.
- Restricted gift
- A contribution the donor has designated for a specific purpose or program. Restriction affects how the organization may use and account for the funds; it does not change the receipt requirements, though many organizations note the designation on the statement as a courtesy.
- Stewardship
- The ongoing work of thanking donors, reporting on how their gifts were used, and maintaining the relationship between asks. Prompt, specific acknowledgment is the first and most basic act of stewardship, and the year-end statement is often the most-read stewardship touchpoint of the year.
- Tribute gift
- A contribution made in honor or in memory of someone. The donor receives the tax receipt; the honoree or their family typically receives a separate notification that does not include the gift amount unless the donor asks for it to be shared.
Questions people ask
Is a nonprofit legally required to send donation receipts?
Strictly speaking, federal law places the burden on the donor to obtain a written acknowledgment for any single gift of $250 or more, and the organization is only legally required to provide a written disclosure for quid pro quo payments over $75. In practice, an organization that does not send receipts is failing its donors and will hear about it in April. Nearly every nonprofit receipts every gift as a matter of course.
What is the minimum a donation receipt must include?
For a gift of $250 or more: the organization's name, the amount of cash or a description of noncash property, and a statement about whether goods or services were provided in exchange, with a description and good faith value if they were. Add the date of each gift and your EIN even though the federal rules are less explicit about them, because donors and preparers expect both.
When do year-end statements need to be sent?
The donor must have the acknowledgment before they file their return or by the return's due date including extensions, whichever comes first. Since some donors file in early February, the safe target is to have statements in the mail or in inboxes by the end of January, with the ability to produce an individual statement on request for anyone who asks sooner.
Can we send receipts by email instead of on paper?
Yes. The IRS accepts electronic acknowledgments, including email, as long as the content meets the substantiation requirements. Many organizations email smaller donors and mail printed statements to larger or older donors, and keep a delivery log either way so a replacement can be produced quickly.
How should we receipt a gift that came through a donor-advised fund?
Thank the individual who recommended the grant, but do not describe the grant as their tax-deductible contribution, because their deduction happened when they funded the DAF. A short note confirming receipt of the grant from the sponsoring organization, stating that no goods or services were provided, is the usual approach, and the individual is typically soft credited in your records.
How do we receipt an in-kind or noncash donation?
Describe the item or property in reasonable detail, note the date received, and include the goods and services statement, but do not assign a dollar value. Valuation is the donor's responsibility; for larger items they may need Form 8283 and a qualified appraisal, and you may be asked to sign the form to confirm receipt.
What if the donor received something in return, like a gala ticket or an auction item?
State what they received and its good faith fair market value, and make clear that only the amount paid above that value is deductible. For any such payment over $75, this disclosure is legally required and the organization can be penalized for leaving it out. An auction purchase at or below fair market value has no deductible portion at all.
Do we need to receipt gifts under $250?
Not for the donor's federal substantiation, since a bank record or a simple written communication from the organization showing name, date, and amount is sufficient for smaller gifts. Most organizations receipt them anyway because it costs nothing extra in a batch and because a thank-you for a $40 gift is often what turns a first-time donor into a repeat one.
How do we handle donors who give through payroll deduction?
Payroll gifts are usually substantiated by a combination of the donor's pay stub or W-2 and a pledge card or similar document from the organization that states no goods or services were provided. If the gifts reach you through a workplace giving intermediary, that intermediary may issue the acknowledgment; ask so you can avoid duplicate or missing receipts.
Should the year-end statement list every gift or just the annual total?
List every gift on its own line with its date and amount, then show the total. The IRS accepts a periodic statement as substantiation only when each contribution is itemized, and donors need the individual dates to reconcile against their own records. A single lump sum with no detail does not meet the requirement.
What if a donor asks for a receipt for a year we have already closed?
Produce it from your records for that year and send it. There is no rule against issuing a replacement or a late acknowledgment, though a late one may not help the donor if they have already filed. This is the main reason to keep a copy of every statement and a clean gift history that can be queried by donor and year.
How long should we keep copies of donation receipts?
Keep them at least as long as the period during which a return can be examined, which is commonly three years from filing but can be longer in some circumstances. Many organizations keep receipts and gift records for seven years as a practical standard and retain major gift documentation permanently. Storage is cheap; reconstruction is not.
Do state laws add anything to the federal receipt requirements?
They can. Many states require charitable solicitation registration, and some require a specific disclosure statement on solicitation materials, which organizations often add to receipts as well. The federal substantiation rules are the floor; check with your state's charity regulator or your accountant for anything that applies where you raise money.
Can we give volunteers a receipt for their time or expenses?
The value of donated time or services is not deductible, so you should not issue a receipt stating a value for it. Volunteers may be able to deduct unreimbursed out-of-pocket expenses incurred while serving, and for $250 or more of such expenses they need a written acknowledgment from you describing the services they provided and stating whether any goods or services were given in return.