A non-profit organization cannot function without donors. If you work in one, when soliciting donations from businesses and individuals, make sure you have a donation receipt handy. This receipt is vitally important and will be used for your records. It is likely to be used to claim a tax deduction at the end of the year.
Since charitable donations are tax deductible for the donor and reported by non-profit organizations, receipts must include specific information about the value of the donation and what the donor received in return. The Internal Revenue Service (IRS) establishes guidelines regarding the data to include on receipts, although it does not provide specific forms. If you have questions related to tax laws, visit the IRS website or consult with a lawyer who specializes in tax matters. However, charities can create a simple donation receipt template on the computer or by hand to give to donors.
Steps to follow:
- Create a receipt on the computer. The only thing that needs to be printed on this page is the receipt itself.
- Center the words “Donation Receipt” at the top of the page. Use bold letters, so they can be seen clearly.
- Place your cursor on the left side of the page and enter the date the donation was made. Include the month, day, and year. The date is very important as you record this information on your tax return.
- Press the “Enter” button twice. Write the words “Received From ______”. In this space, the donor writes his individual name or the name of the company that is donating money or goods.
- Add another space and press the “Enter” button again, so there will be a space before the next line. Write the words “type of contribution” and leave space to write if the donation was of food, clothing, items, or money.
- Repeat the line spacing again and write the word “Amount” on the next line. This is where you will write the value of the contribution.
- Press the “Enter” button two more times, leaving enough space between the lines. Write the word “Signature” and leave space for you, or another authorized representative of the organization, to sign the receipt. This will give the donor legal proof, if the donation is contested for any reason.
- Repeat the spacing used in the instructions on your receipt. Write the words “Donation Tax Number” where your non-profit organization number will be written for the records of both your organization and the donor’s records.
Make a decision about the format. Donors do not need a specific receipt style for their donation; it can be a letter, a card, an email, or a form they need to fill out and return. If the corresponding information is included, the donation receipt serves as proof of donation.
Make sure there is enough space to put signatures, donation amounts, dates, etc.
Keep a copy of it. In the event of a handwritten receipt or a receipt on an unusable medium, it is important to keep a copy. It can be photocopied or scanned on a computer, for example. The tax document will be necessary later for tax reasons. Receipt books in some organizations duplicate receipts automatically.
Thank you notes should be kept separate. It is best to send a thank you note separately from the donation receipt, and not with it. The letter acknowledges the contribution of a donor on behalf of the organization, whereas the business forms are created for tax purposes. They can be sent in the same envelope, but they must be on separate sheets. Donors may consider posting the letter in a prominent place without showing how much they have donated.
