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How to make convenient year-end tax statements for your donors

Posted January 14, 2021 by Virginia Davidson

tax receipts for donors

When you send year-end tax statements to donors, you provide them with a convenient summary of their charitable contributions. In addition to being a helpful document for donors to have as they complete their taxes, these statements give your organization an additional opportunity to express gratitude for your donors’ charitable giving.

Here are three things to keep in mind to help you prepare convenient year-end tax statements for your donors.

 

1. Year-end statements are handy to donors, even if you aren’t required to send them.

If you acknowledge gifts as they are received throughout the year, then it’s not required to send year-end statements. Your organization has already fulfilled its IRS obligation to provide documentation for charitable gifts of $250 or more.

But, even if you’ve already acknowledged gifts, sending year-end tax statements can help reinforce relationships with donors and build their trust in your organization.

Year-end statements are a handy tool for donors as they complete their taxes. Instead of searching for each acknowledgment your organization has sent over the year, donors can find all the information they need in one document. They will appreciate this convenience.

2. Year-end statements should be professional and accurate.

The look of your year-end statements should be in keeping with the other communications you send throughout the year. Include contact information in case your donors have questions. Remember to proofread your template, too. Typos or spelling errors look unprofessional and may cause your donors to question the accuracy of your records.

3. Provide details for gifts received over the past calendar year.

Make sure your statements provide donors with the information they need for their taxes. Your organization may have a fiscal year start date of July 1, but remember that, for tax purposes, your donors need information for the gifts they’ve made during the calendar year.

In your letter, include the date and amount for financial contributions, and list the donor’s total giving amount for the year.

For in-kind gifts, you may include descriptions of items but not their values. The IRS advises not to include values, as it’s up to the donor to determine the value of in-kind contributions.

Conclusion

If you’re a Little Green Light customer looking for specific guidance on how to create year-end tax statements in your account, check out these resources in our Knowledge Base. They include step-by-step instructions with a sample letter, a recorded webinar, and tips specifically for our Canadian customers.

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