The IRS requires that a charity send a formal acknowledgment letter for any donation that is more than $250. The donor will use this letter as proof of his or her donation and right to a tax deduction. Both types of letter can be accomplished at the same time or separately. But they should be sent immediately after the donation is received.
Here are the minimum requirements of that acknowledgment letter:
- Your organization's name.
- The amount of the cash contribution.
- A description (but not value) of non-cash contribution (sometimes called gift-in-kind). The donor is responsible for estimating the value of non-cash contributions when they are reported to the IRS on a donor's tax return.
- A statement that no goods or services were provided by the organization, if applicable.
- A description and good faith estimate of the value of goods or services, if any, that the organization provided in return for the contribution. An example of this is a benefit dinner where some of the money received pays for the actual dinner, while the rest is a donation.
- A statement that goods or services, if any, that the organization provided in return for the contribution consisted entirely of intangible benefits if applicable. An example might be a small gift typically of a value under $75.