Fundraise Smarter

Stay Protected: What the IRS Expects You to Tell Your Donors

Posted by James Gilmer on Apr 18, 2016 10:00:00 AM

irs nonprofit compliance

There are some things in life that are super important but also, well...a little boring.



The DMV.

Not exactly sexy stuff. But the consequences of overlooking them are pretty severe.

That’s why I’m so grateful that there are people out there like the good folks at Harbor Compliance who are absurdly dedicated to helping nonprofits take care of the (let’s face it) boring yet OMG-you-better-not-forget-to-do-this kind of tasks that come with running a nonprofit.

Things like donation receipts and charitable solicitation disclosures.

Today on the blog, we’re joined by James Gilmer from Harbor Compliance who is going to tell us exactly what you need to include in your email solicitations and receipt emails to stay on the right side of the law.

Everyone say “Hi James!”


Alright James, take it away!


Donations, grants, and public support are all indicators that the community appreciates your charity's work. No matter the type of nonprofit you run, one of the easiest ways to show #donorlove is through a simple thank you note. As a matter of compliance, you may be required to provide additional forms of acknowledgement to your donors, both before and after you receive a gift.

Let’s start with charitable solicitation disclosures, which happen at the point of solicitation.

Charitable Solicitation Disclosures

Charitable solicitation disclosures are required when communicating with donors in about 24 states. They are located on your solicitation materials, including mailings, your website, and email solicitations, among other places.

States That Require Charitable Solicitation Disclosures

Disclosures are short statements that inform your donor where they can obtain more information about your charity, particularly its leadership, finances, and charitable programs.

They’re also proof of state charitable solicitation registration, since you will often include your charity’s license number or a telephone number of the state’s charitable solicitation authority.

As you might suspect, each state requires different language.

Let’s take a look at an example:

Pennsylvania’s required disclosure statement includes a lot of valuable information for a prospective donor:

"The official registration and financial information of (insert the legal name of the charity as registered with the department) may be obtained from the Pennsylvania Department of State by calling toll free, within Pennsylvania, 1 (800) 732-0999. Registration does not imply endorsement."

Disclosure Statements in Email

Adding disclosure statements to email solicitations is a bit tricky because the recipients most likely live all across the country. If you can, segment your email lists by state, and add the appropriate disclosure statements.

Fundraising Campaign Calendar


If you don’t know where your donors live, it’s a bit trickier. There’s really no way to avoid a hideous block of text somewhere on your solicitations, but you can clean up the presentation a bit. For instance, you can combine disclosures from all the states in which your charity is registered onto one document or page. You can style it like the rest of the email, or make it easily downloadable, like Heifer international does.



Disclosure statements are important because they help protect donors from unregulated and illegitimate charities. Donors do their research before they give, and they want to know your charity has complied with state requirements. While disclosure statements by themselves probably won’t sell your mission to a donor like an emotionally engaging fundraising campaign can, without the proper legal disclaimers in place, you could lose out on gifts without even knowing it.

Now let’s talk about acknowledging your donors and their gift.

Donation Receipts

We already covered sending a thank you note, which should be second nature to you by now!

Unfortunately, you’re not quite done. The IRS has recordkeeping rules for charities that receive donations, as well as for donors who make a gift. When your nonprofit receives a gift, your donor generally expects to receive acknowledgement in the form of a receipt. While it is the donor’s responsibility to ask the charity for this receipt, you can be proactive and have a template ready to send as soon as you receive a gift!

Per the IRS, for gifts over $250, your organization generally must provide your donors:

  1. The name of your organization
  2. The amount of cash contribution or a description of what was donated
  3. A statement that a contribution was given without anything in return (such as services, tickets, swag, etc.)

And a few others. Be sure to review the full IRS requirements here.

At the same time, your donors must keep this receipt and thorough records of their contribution in order to receive a tax deduction at the end of the year. The IRS has plenty of other rules about nonprofit recordkeeping, so be sure to review other possible requirements unique to your charity.

Like disclosure statements, donor receipts are required, but they don’t have to be unsightly. It’s best to have a template receipt on hand, where you can write in the donor’s information and describe the gift. Your donor receipts should be printed on organization letterhead at minimum (or styled in the same manner as your other email communications). You can also remind your donors how much of a difference they are making, where their donation will go, and who benefits from their gift, as long as the language required by the IRS is included. Remember, while there is room for a bit of creativity, this is a tax receipt for official purposes, so it may be best to leave the excessive color behind.

Your donors give because they are inspired by the work your nonprofit does in the community. You have an ongoing responsibility to your donors, both in staying compliant with charitable solicitation requirements, and in your recordkeeping efforts. Most importantly, your donors deserve to feel appreciated. By supporting your compliance efforts with meaningful thank-yous and a bit of charm, you’ll help grow your fundraising successes!

Author Bio:

james_gilmer.jpg James Gilmer is a compliance specialist for Harbor Compliance, which establishes 501(c) nonprofits and helps them stay compliant. Harbor Compliance assists charities in every state and several countries abroad. James serves on the Board for two nonprofits in Lancaster, Pennsylvania.

Topics: donor stewardship, nonprofit compliance, IRS

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