How to create a donation receipt

How to create a donation receipt

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To encourage people to assist their communities, the government allows donors to deduct charitable contributions from their federal tax returns. Donors must have bank records or receipts from charities before taking deductions, according to Internal Revenue Service rules. Charities aren’t required to give receipts unless the donation is worth $250 or more. Charities also must include a written disclosure to donors who receive goods or services for a donation of more than $75.

Decide whether to use the nonprofit’s letterhead, e-mail, a postcard or a special form to create the receipt. The IRS doesn’t mandate how the receipt should look. How much money you have to spend will play a part in your decision. A letter, while acknowledging the donation, also can include some information about the nonprofit’s successes so far and make a pitch for another donation. For people who donate online, consider using e-mail, as you will already have the donor’s e-mail address.

Write out the receipt with your organization’s name, the donor’s name and the amount of money or a description of the item donated, but not the value. Determining the value is the donor’s job. Also give the date of the donation. If the nonprofit gave the donor an item or service in return for their contribution, the nonprofit must provide a description and good-faith estimate of its value. Religious organizations also must include a statement that “intangible religious benefits” were provided but they have no monetary value for tax purposes, if that is the case, according to IRS rules. For example, altar wine has no value for tax purposes. Under IRS rules, it is not necessary to include the donor’s Social Security number or tax identification number.

Provide a written disclosure in the receipt to donors who give more than $75 and receive something of value in return. The written disclosure should state that the amount of the contribution that is deductible on federal income taxes is the amount that exceeds the fair market value of the gifts, and give the amount. For example, if a contributor gives a nonprofit $100 and receives a ticket in return for a concert by the local symphony, the nonprofit is obligated to tell the contributor how much the fair value of the ticket is on the open market — for example, $35. The contributor will then know that he can only deduct $65 from his taxes as a charitable contribution. Generally, token items, such as a coffee mug with the nonprofit’s logo on it, are exempt from this requirement as being insubstantial, as are low-costs items given freely to the donor but that the donor does not order or expect from the nonprofit.

Send the receipt no later than January 31 of the year following the donation for the donor to take his deduction. To take deductions, receipts must be contemporaneous. According to IRS rules, this means the donor must receive the receipt by the time hes files his individual federal income tax return for the year of the contribution or the due date of the return, including any extensions.

How to create a donation receipt

Step 1: Navigate to Your Admin Dashboard

If your home page is not your Admin Dashboard, click on the drop down box at the bottom of the screen next to “Viewing Dashboard For” to view a list of organizations that you are an administrator for. Click on the name of your organization you’d like to access.

How to create a donation receipt

Step 2: Navigate to Your Donations Table

From the Admin Dashboard, scroll down to the “Recent Donations” section and click on “View All Donations” at the bottom.

How to create a donation receipt

Step 3: Resend Donor Receipt

From the donations table, find the donor you’d like to resend the receipt to, and click on the receipt icon in the “Actions” column in the same row as that donor.

How to create a donation receipt

When clicking on the receipt icon, you will be prompted to confirm the email address that the receipt was sent to previously OR you may indicate any other email address you would like to send the receipt to. If the donor did not receive their original receipt due to a typo in their email address, now is your opportunity to correct the email address or select a different one it should be sent to. Once you confirm the email address and make any changes, select “Send Receipt.”

How to create a donation receipt

Once your receipt has been re-sent you should see a confirmation at the top of the page. That receipt will be sent to the email address in the Recipient’s Email Address field at the time of the resend.

Note: If you change the recipient’s email address when resending a receipt, the email address on the donation record itself will remain unchanged. We recommend keeping track of these instances in your donor management system.

How to create a donation receipt

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If your business accepts donations, such as cash or used goods, you need receipt letters to give out. Such letters are generally used for tax purposes by the individual who makes the donation. Tax receipt letters can be given out in person or mailed. The letters let the individual know the donation was received and lists the value of the item for tax purposes. While the Internal Revenue Service does not require a specific form letter, certain information is required to be in the letter.

Send company letterhead, if your organization has it. Otherwise, enter in the name of your company and the company contact information on the tax receipt letter you are creating in your word processing software. The contact information should include at least the company address and phone number. If you do not have letterhead, input the company information in the document header.

Write the date of the donation on the letter. Since no specific format is required by the IRS, you can include the date anywhere on the letter you like, such as the top corner or the bottom of the letter. You can even leave a space to write in the date if you will not be using the letter immediately.

Describe the donated item. For tax purposes, the IRS requires a description of what is donated on the tax receipt letter. If cash is donated, the amount should be listed by the organization. For goods, you can list the items or leave a blank space to be filled out by the person making the donation. The IRS does not require the organization to list a description of donated goods because that is the responsibility of the person making the donation.

Create a few lines or leave a blank space for the value to be written in by the person making the donation, if the letter is for goods donated. The IRS does not require an organization to determine the fair market value of donated goods.

  • Volterra Residential College: Tax Receipt Letter — Value of the Goods Received
  • IRS.gov: Publication 526

Jamie Lisse has been writing professionally since 1997. She has published works with a number of online and print publishers. Her areas of expertise include finance and accounting, travel, entertainment, digital media and technology. She holds a Bachelor of Arts in English.

Your donors are going to expect a note at the end of the year totaling their charitable donations. This helps them keep track of their donations and enables you to see how much each person contributed to your charity. We can help you with the creation of a donation receipt template so you can easily send a receipt to all of your donors.

Get started creating the perfect template for your charity with our online receipt maker today.

Before we dive in, check out our online invoice generator for an easy way to create an invoice for your projects that will look fantastic.

Downloadable Receipt Templates

Here’s our compilation of donation receipt templates. Feel free to download, modify and use any you like. For more templates refer to our main page here.

How to create a donation receipt

How to create a donation receipt

How to create a donation receipt

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When and How Should You Send a Donation Receipt?

You will want to send a donation receipt at the end of the year to remind your donors of the contributions they made throughout the year. You can print and sign the donation receipt or send it through email, depending on your preferences. It’s a good idea to create a template you can use whether you want to send electronic receipts or if you’ll be printing and mailing them so you can ensure the formatting is correct for each one.

What Info Should Your Donation Receipt Have?

Your receipt may be used by your donor to show they made charitable donations throughout the year. You’ll want to make sure you have everything necessary in their receipt so they can use it for their taxes. To do this, make sure you include your charity information, their name, a summary of their contributions, the total for their contributions, and your signature.

You will want to list the cash amounts donated as well as the type of products or services donated to your charity. You can just create a general list of their contributions. This gives them an idea of how many times they donated and what they donated. A total at the end of the detailed list makes it easy for them to see exactly how much they donated to your charity throughout the year.

How Can You Make the Receipt Look Good?

Make sure you pay careful attention to the layout of your receipt. You may want to add a logo, if applicable, so it’s easy for the donor to see who sent the receipt to them without having to read through the receipt. If you plan on printing the receipts, make sure they’re printer-friendly.

We’ve got a whole collection of different free and printer friendly receipt templates here, for everything from cash receipts to rent receipts.

Consider making the receipt look more like a letter so it looks more personal than a typical receipt (use our receipt maker to do this easily). However, this is not necessary if you’d prefer it looks more like a receipt. Consider which way you’ll want to create the receipt based on your charity type and what you think your donors might prefer.

You’ll want to make sure you create a template you can use to send your donation receipts at the end of the year. We can help you make sure your receipts include everything and look fantastic. Use our online receipt maker to start creating the perfect donation receipt for your charity to use today. Your donors are really going to appreciate the receipt you send them at the end of the year.

by How to create a donation receiptAnna Maria Richards April 17, 2021, 12:24 pm

Many nonprofit organizations fail to realize that proper and well made donation receipts can boost their donor retention rates. A well executed donation receipt will leave a good impression on your donors and compel them to make further donations.

Donation receipts must be necessarily issued by every nonprofit to help not only the organization but also the donor to keep track of the donations. Today we are going to give you a few tips on how you can create compelling donation receipts.

1. Keep Them Short And Sweet

Make sure your donation receipts don’t read like essays. Your donors are likely to get turned off or uninterested if your receipt includes irrelevant details or long requests asking for more money.

While formulating a receipt, one should refrain from using complicated language and make sure it is easy to read and understand. Here are a few points you can keep in mind,

  • If you are going to ask for more donations in the receipt, make sure you do so in an engaging manner. State how more donations could help your nonprofit’s vision. Don’t make the receipt solely for asking more donations.
  • Have a proper structure for your receipt. Present the matter in a cohesive manner and make sure it is clear and concise.

2. Make It Less Like A Receipt

Donation receipts are probably the only chance you will get to interact with your donors. So why would you waste this opportunity by making your receipts plain and boring? One way you can make a good impression on your donors is to make sure your receipts are not like other money receipts. Here are a few ways you can spice up your donation receipts,

  • Give them a virtual experience through pictures and videos – You can include links to pictures and videos which showcase your nonprofit in action. The pictures can also be of activities and different events held by your nonprofit.
  • Give them an update – Brief your donors on the different milestones your nonprofit was able to achieve because of their donations. This can also include testimonials and success stories.

3. Include All The Relevant Information

There is some essential information you need to include in every donation receipt. It is always recommended to follow a standard layout for all your donation receipts. You can use automated donation receipt services to generate your receipts. The IRS makes it mandatory to include the following details in donation receipts,

  • Name of the organization
  • Donation date
  • Name of the donor
  • Amount of money donated by the donor
  • A statement regarding goods and services
  • If your nonprofit is tax exempt, you need to include the EIN of your organization.

You can also include your nonprofit’s contact details and address in case the donor wants to contact you. Including all these details assures your donor of the authenticity of your nonprofit organization.

4. Make Sure To Send Receipts On Time

Sending your receipts on time is more important than you think. You don’t want your donors getting frustrated or worried thinking whether their donations have been received and verified. Make sure to have your receipts sent 1-2 days after the donation has been received. Late receipts can lead your donor to stop making further donations. Regular receipts can help both the donor and the organization to maintain an accurate financial record.

5. Include Invites To Events And Activities

While maintaining an online connection with your donors is always good, a physical connection is even better. If your donor is a regular contributor and has made a number of donations, you can give them extra benefits like passes to free events and other activities. You can include a short invitation in your receipt inviting your donor to an event. These kinds of invites can be included after the donor completes a certain number of donations.

Conclusion

With a little bit of time and effort, you can make sure your donation receipts are up to the mark. There are plenty of donation receipt templates online available to help you formulate a successful receipt.

How to create a donation receipt

When it comes to connecting with your donors, nonprofit donation receipts may just be your secret weapon. Think about it: For tax purposes, you need to send donors a receipt whenever they give. It’s the one piece of mail that donors expect to receive from your organization – and even want! So while you have their attention, why not make the most of it? You could write a separate donation thank you letter, or you could simply include compelling content and make your donation receipt its own thank you.

For most organizations, donation receipts are automatic emails sent the instant someone makes an online donation. And that’s a great way to do it. At Kindful, we’re all about using marketing automation tools to make your donation receipts more efficient and effective. But there are many ways to make your donation receipt templates inspiring and creative!

Receipts can be a consistent and creative way to engage your audience and encourage even more donations. Let’s get creative with our donation receipts.

Making Donation Receipts Exciting

If someone has just given to your organization, the last thing they want to see in their donation receipt is another solicitation for even more money.

Asking for more money all the time is not the best solicitation practice. But you can lead them down a strategic path that increases their passion for your organization. You can take a less-than-exciting donor communication and turn it into an enticing engagement to get your audience more interested and involved. Turn that mundane receipt into a valuable donor engagement piece with content that means something.

Now the question is: What is valuable content? Just ask yourself what would entice you or open a story loop in your mind. Would it be something that makes you laugh? Makes you cry? Something that makes you mad enough to take action? Or curious enough to learn more?

Whatever it is, take these mundane donation receipts and turn them into content that will make your donors even more excited to support your organization. Take that simple communication piece and use it to put a face to your statistics and a story to your ideals. Here are 4 great pieces of content that you can include in your donation receipts to encourage even more donor engagement.

1. Short videos.

A 1-3 minute video is a great way to show off your work and inspire people to get involved. Link to your YouTube channel or a specific video on your site to drive traffic.

2. First-hand testimonials from your target population.

Let other people promote your vision for you, giving donors a personal account of how their dollars help change the world.

3. High-quality photos tell a story beyond words.

Photos can draw donors into your mission in just a few seconds. Link to a photo album of all your favorites.

4. Blog posts that are educational or inspirational.

These posts can showcase longer stories or content to help your donors feel more informed or inspired to support your organization.

How To Present Your Donation Receipts

Once you’ve decided what content you want to share with your donors, there’s still one more important step. To create donation receipts that won’t just be added to the pile and forgotten about until tax season, you need to present well.

Remember that donation receipts are not the time to ask for something more. This is the time to thank your donors and give them an opportunity to engage deeper with your mission. Get creative with how you tell your donors about this opportunity. Don’t beg for their help. Make them feel like they’re missing out if they don’t get more involved.

Take a look at the examples below and tell us which message you would click on.

Donation Receipt Messaging Comparison

Option 1 Option 2
Like us on Facebook to learn more and see photos from the field. Check out these amazing photos from our last trip and see the impact you are having all over the world.
Sign up for weekly blog updates to stay up to date on our work. Meet the community that now has clean water thanks to your support.
Watch this video to see how you can get involved with the great work we’re doing. Our friends want to say thank you! Take 30-seconds to see how your support makes an impact.

Did you notice how much more engaging Option 2 is? Not only do these short messages include a subtle note of thanks, but they also encouraged more donor engagement by showing how they’re making a difference. The truth is, with just a little extra time and creativity, you can dramatically improve the impact of even the most simple donor communications.

Automated Nonprofit Donation Receipts That Pop

Valuable content is key. Sharp presentation is important, too. But spending too much time on a good thing is still too much time. That’s why Kindful can help you create automated email receipts that incorporate all the elements that matter without taking up a ton of your valuable time. Check out our tips on crafting the perfect donor email and head over to your donor database to create donation receipts that will make your donors take notice.

With Kindful, you have the ability to include first-hand testimonials, links to media, and custom fields, so your donors receive a personal touchpoint with every receipt they get. You can even create a variety of different templates to send based on the amount people give.

Schedule a live demo with our team, and we’ll show you how easy it is to create and automate reports, utilize online and offline fundraising tools, quickly integrate and access all your data, and ultimately create more time to engage your donors.

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How to create a donation receipt

Open the template in Excel.

How to create a donation receipt

Detail

This general donation receipt template in Microsoft Excel spreadsheet format (“.xlsx”) includes fields for charity / organization name, address, contact information, donor name, several lines of description, an amount field, a handwriting signature field.

According to IRS Publication 1771, Charitable Contributions Substantiation and Disclosure, charitable donations are tax-deductible for the donor and reportable by the nonprofit organization. A donation receipt must include specific information about the value of the donation and what the donor received in return.

First of all, the most important item to include on the receipts is the name and status of charity / organization name. It must be a non-profit, meaning you have 501c3 status under the federal government. In our donation receipt design, we simply used the fields that are usually for seller information, located on the top of the Excel form.

Secondly, the receipt should include the donor’s name, this is necessary in order to be legally valid. Although not required, we’ve placed the “Phone#”, “Mobile#” fields on the top of the section outside the printable area. In case you want to include these information on the PDF donation receipt or printed receipt, you can easily move them into the “Donor” section.

Third, it is also required to clearly describe the donation, including the date the donation was made, as well as the amount of the donation.

The receipt must also declare whether the donor received goods in return for the donation.

While not required, this form includes a “Receipt#” field on the top of the form under the “Date” field. If you have used one of our form designs for invoicing, you may know it is just the “Invoice#” field – we just place a new label “Receipt#” before the cell. So all features Invoice Manager for Excel offer for the “Invoice#” field, works for the “Receipt#” field too. For example, the automatic receipt numbering feature, which generates a unique, sequential and unique based on a counter stored in the backend database. You can also retrieve information about an already-saved receipt by type in the receipt number into the “Receipt#” field.

Please also refer to How to Create a Donation Receipt on wikiHow, which explain the key points to note on creating a tax-deductible donation receipt. And visit sample donor substantiation language to get an idea on what to write on donation receipts.

How to create a donation receipt

Donation receipts can be confusing, especially for smaller nonprofits. Depending on where your organization is located and the types of donations you accept, you have a unique set of rules and regulations you need to follow.

In this article, we’ll break down everything you need to know about donation receipts to make the process as pain-free as possible for you.

Here’s everything you need to know about Donation Receipts:

How to create a donation receipt

What is A Donation Receipt?

Donation receipts are written records that acknowledge that a gift was given to an organization by a legally qualified/eligible donor.

There are a variety of qualified/eligible donees, depending on your country and region. Here are a few examples:

  • Registered 501(c)(3) Charitable Organization (US)
  • Registered 501(c) Non-profit (US)
  • Registered Charities (CA)
  • Non-profit organizations (CA)
  • Charity or Registered Nonprofit with an ABN # (AUS)
  • Charity registered with ACNC with DGR status (AUS)

These are only a few examples of types of qualified/eligible donees across the globe. In the United States (US) alone, there are 29 different types of 501(c) organizations. However, what unites the different types of organizations is the need to issue a receipt upon receiving a donation.

Here is what should generally be included in a nonprofit donation receipt:

  • The donor’s full name
  • The nonprofit organization’s name
  • Unique Donation ID
  • Date of the donation
  • The amount of gift received
  • Signatures from signing authorities

Depending on where you live, there are different rules regarding what to include in your receipt. It is important to note that these rules and regulations can change. It is best to go directly to your government’s websites to check for the exhaustive list of what to include. Details differ slightly when proving written acknowledgment in the US, a donation receipt in Canada, or a receipt in Australia.

See How Keela Automatically Creates Donation Receipts

Watch this quick video to learn how Keela CRM saves you time, designs tax-compliant donation receipts, and issues them faster for you.

How to create a donation receipt

What Does A Donation Receipt Look Like?

The Canadian Revenue Agency (Canada’s IRS) was nice enough to provide us with some examples of what a donation receipt should look like. Let’s take a look!

As you can see, this example outlines the necessary components of a donation receipt (e.g., the donor’s full name, the nonprofit organization’s name, Unique Donation ID, etc.).

Things can change a bit depending on the type of gift you receive. For example, if you receive a gift with an advantage attached or an in-kind donation, your receipt may look differently.

Let’s take a look at how the Canadian receipt changes with an advantage attached.

There are a few new fields: total dollars received, the value of advantage, description of advantage, and the eligible amount.

To be clear, not all nonprofits need to have a receipt that looks just like the ones featured above, but your receipt must contain all of the information outlined by your local laws and regulations.

To create a donation receipt that’s right for your organization, try this free online receipt generator. A better alternative is a nonprofit management software platform like Keela. With Keela, you can customize and automatically send out donation receipts in the blink of an eye.

How to create a donation receipt

Why Are Donation Receipts Important?

Donation receipts are written acknowledgments that prove a charitable donation was made. They are beneficial to both the individuals who make contributions to your nonprofits and your organization itself.

Here’s how receipting is beneficial to your donors:

  1. Tax Incentives: In most countries and regions, there are governmental incentivization programs for charitable giving. Donation receipts are records of charitable contributions that provide donors with the documents they need to be eligible for these programs. For example, in the US, you can generally deduct up to 50 percent of your adjusted gross income based on charitable contributions made, which reduces your taxes owed. Additionally, the UK has a Gift Aid program that incentivizes giving to charities and community amateur sports clubs (yes, they love soccer—or football—that much). This program allows these organizations to claim an extra 25p for every £1 you give. That’s a bang for your buck!
  2. Donation Confirmation: By giving receipts to donors, you eliminate any uncertainty that their donation wasn’t processed. Your donors can rest easy knowing that their money is being put to good use. Also, donation receipts help donors keep track of their finances. In that sense, donors greatly appreciate receiving donation receipts without having to ask for them.

Here’s how receipting also benefits your organization:

  • Stewardship Opportunity: Receipting is your nonprofit’s opportunity to begin the stewardship cycle. With donation receipts, you can send a heartfelt thank you message that will deepen the bond you share with your donors and encourage them to give again.

How to create a donation receipt

Build Your Nonprofit’s Donor Stewardship Plan

Stewardship activities are touchpoints for nurturing your donor relationships and help to increase your donor retention rate. With this FREE template, you can map out your donor stewardship plan.