How To Write An Effective Donor Acknowledgement Letter For Your Nonprofit Organization?
Just like non-profit organizations depend on their customers to thrive in their industry, charitable institutions depend on their generous donors. The generosity of their donors is the fuel that keeps a charitable organization that keeps them running. One of the best ways to keep donors engaging with your nonprofit is by sending an acknowledgement letter for donation from your organization.
Unfortunately, many nonprofit organizations need to pay more attention to the significance of sending a donor acknowledgment letter for the contributions they receive. Charitable organizations must realize the effect an acknowledgment letter can have on their donors and how they can benefit from it.
Furthermore, they must learn how to create & mail thank you letters in the most effective way possible. But first, let’s start by discussing what a donor acknowledgment letter is and when you should send it.
What Is An Acknowledgement Letter For Donation?
A donation acknowledgement or acknowledgement letter for donation is a letter you can send to your donors to document their charitable contributions. The charity contribution can be in the form of gifts or money. Some acknowledgement letters also act as donation receipts, but that’s only true sometimes.
Ideally, nonprofits should send a donation acknowledgement letter to all their donors, no matter what the size or value of their contribution. One reason to do so is that every donor deserves to get acknowledgement for their donations. But there is a practical utility side to sending the acknowledgement letter too.
The donor acknowledgement letter you send enables individuals and organizations to keep an accurate record of their contributions. Besides that, it also helps your nonprofit organization to build a stronger relationship with donors and encourage their continued support.
When Should You Send An Acknowledgement Letter For Donation?
As discussed above, charity organizations should send a donation acknowledgement letter for every contribution they receive. In some countries like the US, charitable organizations have a legal requirement to send documentation to their contributors. Such countries also have a donation cap for when charities should send a donor acknowledgement letter or donation receipt.
For example, in the US, charities must send the appropriate documentation only if the donation value exceeds $250. However, that is not the case for charitable donations in Canada. According to the Canadian Income Tax Department, there is no requirement to send an acknowledgement letter for donation in Canada.
If yours is a registered charity, there is no legal requirement for you to send a receipt within a specific timeframe. However, the recommendation by Canada Revenue Agency tells you to issue payment receipts in the next calendar year after receiving the donation. The deadline for sending this receipt is February 28 of every year.
It allows the taxpayer (your donor) to claim their donations on their yearly income tax returns. Sending the donation acknowledgement letter can make this process faster for your donors. Besides that, the agency also recommends that registered charities issue their receipts periodically over a year. You can also give a single payment receipt detailing the contributions made by a donor in that year.
Consider creating a cumulative receipt and sending it along with the acknowledgement letter for donation to your contributors. But you should leave the details of your non-cash contributions out of the donation receipt. According to the Canada Revenue Agency, charities must issue a separate donation receipt for each non-cash donation.
Charities may send an acknowledgement letter for donation to show your appreciation in this case too. You can find more details on tax ramifications for charitable organizations here.
Why Should You Send An Acknowledgement Letter For Donation?
As discussed above, there is no legal or mandatory requirement for charity organizations to send an acknowledgment letter. Nonetheless, a donation acknowledgement letter is crucial in ensuring that the donor knows that you received their donation and are using it for a good cause.
Sending a donation acknowledgment letter is a choice and a sign of goodwill from your nonprofit organization. Moreover, you can implement it without interfering with your internal operation with the help of automation. Make sure to check if your website has the necessary capability to send acknowledgement letters automatically.
It would be best to use an advanced email marketing tool and a supporting CRM solution to send acknowledgment letters automatically. But, sending the donor acknowledgement letter via email may have a different impact on the recipients. People often ignore their email inboxes unless they receive personal correspondence.
Suppose you want your acknowledgement letter for donation to make a positive impact on the recipient. In that case, you are better off with an offline approach. We are talking about sending a personalized acknowledgement letter to each of your donors. It may seem like too much trouble to send an acknowledgement letter. But it does not have to be like that.
Like emails, you can also use an automated print and mail system like PostGrid to send your letters automatically. You can send a personalized donor acknowledgement letter for each donor using PostGrid. Much like automated email, you can do this with a template and an automation tool like PostGrid.
What Are The Details To Include In Your Donor Acknowledgment Letter?
An ideal acknowledgement letter should include all the details that can help the donor with their tax returns. More importantly, it should convey how much your charitable organization appreciates the donation. You can even include details about how your organization intends to use the contributions in the donor acknowledgement letter.
The essential details to include in your acknowledgement letter for donation are as follows.
Full, Legal Name Of Your Charitable Organization
One of the essential details you must include in your acknowledgement letter for donation is your organization’s name. Provide the full and legal organization name in the acknowledgement letter to let the recipient know the letter is from your organization.
You must decide what details you want to include in the donor acknowledgement letter for the contributions you receive. Even if the letter’s purpose is to show appreciation, you must have the organization’s name to avoid confusion.
Your donors may make charitable contributions to more than one organization. Additionally, you can include other details like your organization’s address and clarify its nonprofit status. Including these details in the letter of donation acknowledgement lets the donor know that their contributions are deductible in tax returns.
Donor’s Name
Another critical detail or element to include in your donation acknowledgement letter is the donor’s name. You can use the same name the donor uses while donating. Addressing the donor as “donor” instead of their name makes your letter look robotic, losing the personal touch it needs.
The good news is that you can quickly implement personalization for your online and offline acknowledgement letters. Ideally, it would be best to go for an offline approach as it can better impact the donors. You can create a personalized donor acknowledgement letter using tools like PostGrid. It can connect with your nonprofit CRM solution and accurately print the donor’s name in the letter.
If you send the donation acknowledgement letter via mail, you must include the donor’s address. You can also ensure the validity of the donor’s address using PostGrid’s address verification tool. Using PostGrid’s verification and automation tool together ensures fast and accurate communication for your organization.
Date Of Donation
It is a detail that charitable organizations often miss to add in their acknowledgement letter for donation, assuming that it’s irrelevant. But it can be helpful for donors during their tax filing process. We understand that including the donation date in the letter can be challenging in some cases, such as mailed cheques.
It might interest you to know that there is a quick fix to this problem. You can use the postmarked date on the cheques as the donation date and make it a standard for all your acknowledgement letters. Including the donation date in the donor acknowledgement letter lets the donor effectively plan their tax deduction for the year.
Donation Details
You can briefly describe the donation in the donation acknowledgement letter to help the donor quickly recognize their contribution. It is handy for businesses or organizations who donate to your charity because they may support more than one cause. You must state that and indicate the donation amount if it’s a cash donation.
For gifts or non-cash contributions, you can describe the items in the acknowledgement letter. In some cases, the donor may be eligible to receive tax deductions. But you’d still need to assess the item’s value and mention it in your donation acknowledgment letter from your organization.
If you receive stock gifts, you can include details like the number of stocks and company name. But, it is best to avoid having the fair market value in the donation acknowledgment letter as it can’t help with the donor’s tax returns. If the donor’s gift is a property, you can specify its address/location in your acknowledgement letter.
Statement For Any Goods/Service You Provide In Return (If Any)
Sometimes, charitable organizations may provide something in return for the donations they receive, such as admission to special events. It could be an admission to a gala, museum, or something else entirely. Make sure to mention this in your donor acknowledgement letter, as it can help your charitable organization.
Doing so enables you to present a good-faith estimate of whatever you gave in return to your donors. Including a statement in the donation acknowledgement letter is also advisable if the donor did not receive anything in return from you. In short, the point is to include any point in the letter that the donor will likely find helpful.
How To Structure Your Acknowledgement Letter For Donation?
You must structure your donation acknowledgement letter correctly to convey your message efficiently to your donors. You already know what details you need to include in the letter from the section above. All you have to do now is put them together in the correct order and send them to your donors.
Moreover, the acknowledgement letter for donation is a reflection of your charitable organization. You must maintain appropriate quality norms for the letter, as your donors may judge your organization using your letter. Here are some pointers to help you create an acknowledgement letter with proper structuring.
- Use your organization’s printed letterhead with logo and address.
- Include the date of writing the letter in the top left corner of the letter.
- Include the name and address of the donor on the left-hand side of the letter.
- Always use a salutation and follow it with the donor’s preferred name.
- Include one or two paragraphs in the body of the letter with all the necessary information.
- Use valedictions in the donor acknowledgement letter, such as “sincerely” at the end.
- Always include an authorized signature at the end of the acknowledgement letter.
Donor Acknowledgement Letter Sample
Suppose it’s your first time creating an acknowledgement letter for your charitable organization. In that case, you may still need help with writing the letter. Below, you can find a donor acknowledgement letter sample that can help you draft your letter more easily.
Subject: Ben, thank you for your kind contribution to The Green Earth Project!
Dear Ben,
We at The Green Project would like to thank you for your kind donation to The Green Earth Project. Kind minds like you are why we can continue to pursue our goal of building a greener earth free of pollution.
You donated $130 to The Green Earth Project on February 9, 2022. The donation was made through your credit card, supporting The Green Earth Project’s mission.
As a tax-exempt organization, we make it a point to ensure that every dollar we receive makes a difference to the world we occupy. Thank you for your unwavering support.
No goods or services were exchanged in this transaction, and your contribution is tax-deductible to the full extent under law. Please keep this letter for your tax records.
We thank you again for your contribution and dedication to saving our environment and helping us form a greener earth for future generations. The Green Earth Project looks forward to your continued support in our mission to save the planet.
Sincerely,
The Green Earth Project
What Is The Best Way To Send Your Donor Acknowledgement Letter?
The best way to send your donor acknowledgement letter is through print media like postal mail. There are several reasons for this. But the most significant grounds for using physical letters include their high open and read rate. It also offers a more personal way of communicating with the donor.
Most charitable organizations that don’t use physical mail do so because they believe it can become inconvenient to send them. But the truth is that sending a donor acknowledgment letter via mail is just as easy as sending it using email.
All you need is a template for your donation acknowledgement letter and an automated solution like PosGrid. With the help of an automated print and mail tool like PostGrid, you can quickly send error-free and personalized acknowledgement letters.
The best features for sending personalized acknowledgement letters through PostGrid include superior personalization and bulk mailing capabilities. You can integrate PostGrid’s print and mail API into your website and its CRM solution to accurately personalize your donor acknowledgement letter and mail them.
You can send several types of personalized mail using PostGrid. It means PostGrid’s tool can do much more than sending the donor acknowledgement letter for your organization. PostGrid even offers a template gallery and editor you can use to design postcards and business letters. Last but not least, you can also run advanced direct mail marketing campaigns using PostGrid’s automated solution.
Schedule a FREE demo to see how you can automatically send your acknowledgement letter for donation with zero manual involvement.
