Thank You (with a few IRS strings attached)

A timely thank you to your donors is a practice that let's your donors know how much you appreciate them.  The IRS has requirements that you need to follow if your donors want to deduct their contribution.

• Donations of more than $250 must be acknowledged in writing
• The phrase "no goods or services were received in exchange for this contribution" must be included with the letter (unless they did receive goods or services-see below)
• The letter needs to be sent prior to the due date of the donor's tax return.  Typically this would be by April 15 of the year following the year the donation was made.

If the donor did receive goods or services--for example, they purchased a ticket for a golf outing, then the value of the golf outing would reduce the contribution.  So if the event ticket is $150 and the value of the golf outing is $100, your thank you letter would note--for tax purposes, only $50 is tax deductible.  The fair market value of the food and the golf outing is $100.

NOTE:  if your donor does not receive a timely thank you letter OR the letter does not say ""no goods or services were received in exchange for this contribution" then they will not be able to take a tax dedcution for the donation.