How to Properly Acknowledge 2025 Donations

As 2025 comes to an end, many nonprofits are focused on thanking supporters, finalizing year-end campaigns, and preparing for the new year. This is the perfect time to ensure every donor receives a compliant and meaningful acknowledgment for their gifts. These letters and emails serve two purposes: they keep donors engaged and they satisfy IRS requirements for tax deductions.

What the Law Requires

For any single contribution of $250 or more, donors must have a contemporaneous written acknowledgement from the organization before they can claim a tax deduction. This requirement comes from IRS Section 170(f)(8).

An acknowledgement is considered contemporaneous if the donor receives it on or before the earlier of:
• The date they file their 2025 tax return, or
• The due date (including extensions) for filing that return—typically in early 2026.

Each acknowledgement should include:
• The organization’s name,
• The date and amount of any cash contribution,
• A description (but not a value) of any non-cash donation,
• A statement indicating whether goods or services were provided in exchange, and
• If applicable, a good-faith estimate of the value of any goods or services provided.

If no goods or services were provided, include a simple statement such as: “No goods or services were provided in exchange for this contribution.”

Handling Special Situations

Quid Pro Quo Contributions: When a donor receives something of value (like a dinner, gift, or event ticket), the acknowledgement must specify the value of those goods or services and indicate what portion of the payment is tax deductible.

In-Kind Gifts: For non-cash gifts, describe the donated property or service without assigning a dollar value. Donors determine the fair market value on their own returns.

Donor-Advised Funds: If a gift is made through a sponsoring organization, send the acknowledgement to that funder while still thanking the individual who recommended the grant.

Beyond Compliance: Stewardship and Gratitude

Acknowledgements are not just about tax compliance—they are one of the best donor stewardship tools available. Send "thank you" messages promptly and make them personal. Mention the specific campaign, project, or community program the donor supported. Consider pairing acknowledgements with a short update on outcomes or a year-end message from leadership. A tone that was warm, appreciative, and specific helps build long-term loyalty.

Keep Organized Records

Maintain digital or paper copies of all acknowledgements in your donor database. These records demonstrate compliance in the event of an audit and ensure consistency across your communications.

While acknowledgments can be sent year-round, January 31, 2026 is the practical deadline for ensuring donors have what they need to substantiate their 2025 charitable deductions. Setting an internal cutoff date in early January helps staff verify donation data and issue letters on time

Final Takeaway

Acknowledgment letters sit at the intersection of gratitude and compliance. They fulfill IRS requirements, strengthen donor relationships, and set a professional tone for the year ahead. As you thank your supporters this season, make sure each acknowledgment includes the right information—and a sincere “thank you.”

For more details, see Internal Revenue Code Section 170(f)(8) and IRS Publication 1771, Charitable Contributions—Substantiation and Disclosure Requirements (Rev. 3-2016).