Essentials For Year-end Tax Letters

What goes in your year-end tax letters

Here are a few tips on year-end tax letters from our partners at Little Green Light, the constituent relationship management software, or CRM. The Downstream Project has recommended and installed LGL for dozens of conservation partners.

A thank-you is the “story of you”

In addition to providing the necessary tax receipt information your donor needs, your year-end letter can be celebratory and used to thank your donors for what they’ve helped accomplish. Help them feel the direct connection between their giving and its beneficiaries. For example, rather than say, “Here’s what you’ve helped us accomplish,” cut out the middle person and just say, “Here’s what you’ve accomplished!”

Impact of the donation 

If your donor gave to a specified fund, be sure to share what that particular fund has delivered. This demonstrates your good stewardship of their donation. “Twenty-five people planted 150 along Heritage Creek to prevent erosion into the Chesapeake Bay.” “One hundred acres will remain open to farming forever.”

Required Information

The IRS requires that you acknowledge any single donation of $250 or more (but we recommend acknowledging donations of all sizes), and that you include the following information:

  • Name of your organization
  • Dollar amount of cash contributions (good idea to include the date of each gift)
  • Description (but not value) of non-cash contributions
  • Statement of which portion of the gift is tax deductible, and for the non-deductible portion, a description and good faith estimate of any goods and services you provided.

Source: IRS, Charitable Contributions – Written Acknowledgments

Little Green Light offers smart, efficient ways to automate year-end tax letters. You can read a little about them at this post.

If your organization is rethinking its donor management system this year, or finally leaving the world of spreadsheets for your first CRM, Downstream can help you plan for the move.

Get in touch with us here.

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