Do you have to send annual statements to donors?

If you’re wondering whether your organization is required to send annual statements to its donors, the answer is no. There is no requirement to send annual statements, also known as year-end statements, every year in January. By sending acknowledgments throughout the year, your nonprofit organization has already fulfilled its IRS obligation to provide timely documentation for charitable gifts of $250 or more.

Some organizations do choose to send annual statements to provide donors with a single document that includes all the information they, or their tax preparer, will need for filing taxes related to tax-deductible gifts. This can be a nice way to provide your donors with a simple, convenient resource so they don’t have to hunt for each individual acknowledgment letter you sent throughout the previous calendar year.

But again, this is not required. In fact, it’s likely better to skip sending annual statements if you are concerned about the consistency of gift entry from the year prior, are uncertain about the accuracy of the contact information of your donors, or are just starting the process in February or later.

If you don’t want to send annual statements but you’d still like to offer a convenience to your donors, you could consider the following:

• Send a letter or email to your donors from the prior calendar year with contact information for someone to reach out to at your organization if they need a duplicate copy of an acknowledgment letter for their tax preparation. This way, you aren’t taking on more work than you can comfortably handle at the start of the year.

• In regular communications, such as a newsletter or eblast that you’re sending anyway, include a note about who to contact when in need of information for taxes. Include a specific contact person, not just a generic email address. That way you’re leveraging communications you’re already working on, rather than adding something new to your plate.

Conclusion

It’s not required to send annual statements to your donors, so don’t feel obligated to do so. You can choose to take a lighter-weight approach like the ones described above, or you can rest assured that donors will reach out to your organization if they need any documentation.