At Christianson, the businesses we serve range in industry and business-type. The focus today is on Not-For-Profit entities. As a not-for-profit organization you may be wondering what documents you are required to distribute to your donors per the IRS.
What are the disclosure rules for charitable contributions?
The IRS imposes record keeping and substantiation rules on donors for their contributions. Charitable organizations are required to provide a written disclosure to a donor who receives goods or services in exchange for a single payment in excess of $75.
If your donor makes a contribution from a payroll deduction as a single contribution and the contribution amount is at or in excess of $250, your organization must retain the pledge card or other documentation specifying that goods and/or services are not provided for any contributions made to your organization.
Now, if the donor has multiple payroll deductions meeting or exceeding the $250 threshold, each payroll deduction is treated as a separate contribution for the requirement for written acknowledgments.
What Should the Written Statement Include?
It’s the responsibility of the donor to ensure they have the appropriate information when it comes to tax time, but as the receiving organization, there are ways you can help them to make donating easy! If you provide the form to the donor, these pieces of information should be included:
- Your organization name
- The amount the donor contributed to your organization
- A description of the contribution (if the contribution is not cash)
- The statement (previously mentioned) that states that no goods or services were provided in return for the contribution (if applicable)
- An estimate of the value of goods or services that were provided in return for the contribution (if applicable)
- A statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits (if applicable)
There are many other ways that you need to ensure you are acknowledging and documenting the contributions that are made to your organization. For more information, you are welcome to visit here for the full IRS publication. Otherwise, if you have questions relating to documentation, recordkeeping, or any other not-for-profit practice relating to the financial requirements, reach out to Christianson today!