Donation Tax Receipt Essentials For Nonprofit Compliance

Are you confident that your nonprofit’s donation tax receipts are helping donors maintain their records and keeping you compliant with IRS regulations?

Donation receipts are more than just formalities — they’re essential tools to maintain transparency, safeguard your organization, and support donor loyalty. With an IRS-compliant receipt, donors can claim the tax deductions they’re entitled to, strengthening their connection to your cause and motivating future contributions.

From prominently featuring your nonprofit’s employer identification number (EIN) to crafting compelling impact statements, this guide walks you through everything you need to know to write donation receipts that benefit both your organization and its donors. It includes:

What donation tax receipts are
Why nonprofits need to provide donation tax receipts
IRS requirements for donation receipts
Tips for better donation tax receipts
Charitable donation receipt templates

With the right practices and tools, your nonprofit can streamline the process of issuing tax receipts, so you can stay compliant while enhancing the donor experience. From standard donation software to a nonprofit thrift store POS, your organization’s software makes it easy to generate accurate, IRS-compliant receipts for every gift. Let’s dive in.

What Donation Tax Receipts Are

A donation tax receipt, or donation receipt, is an official document a registered 501(c)(3) nonprofit provides to a donor as confirmation of a charitable gift. These receipts are written records that enable donors to claim tax deductions for their contributions.

Proper donation receipts include transaction details that meet IRS requirements, such as your nonprofit's EIN and donation amounts or descriptions. Donation tax receipts can also contain thank-you messages and impact statements to enhance their usefulness to donors.

Many nonprofits automate the process of issuing receipts through their donation software, which populates each receipt with relevant details about the donor’s unique contribution. While the IRS only requires receipts for gifts of $250 or more, it’s good practice for organizations to issue receipts for all donations.

Why Nonprofits Need To Provide Donation Tax Receipts

In the U.S., donors make an average of two donations each year. Prompt, compliant receipts maximize the impact of each gift while reinforcing trust in your organization. This practice meets legal requirements and leaves donors with a positive impression of your nonprofit’s professionalism, making them more likely to contribute again in the future.

Beyond fulfilling documentation requirements and enhancing the donation experience, here are key reasons why your nonprofit should issue donation receipts:

Reasons why nonprofits should issue donation tax receipts, listed in the text below

Legal compliance: Issuing donation receipts ensures that your nonprofit meets IRS requirements, which helps you avoid potential penalties and maintain your organization’s status as a recognized charitable entity.
Donor tax benefits: While many people give because they believe in a cause, they still appreciate the opportunity to claim their earned tax deductions. Donation receipts allow donors to deduct charitable contributions from their taxable income, reinforcing the value of giving.
Transparency: Providing receipts builds trust by clearly documenting each donation and demonstrating how contributions are managed. Adding elements like your nonprofit’s EIN also helps donors verify your organization’s legitimacy. This transparency strengthens confidence in your organization’s financial practices. Plus, including information about your nonprofit’s impact on receipts communicates that funds are used for mission-related programs.
Compliance with grant requirements: Many grantmakers require nonprofits to maintain accurate donation records. By meeting these requirements, you’ll demonstrate responsible stewardship and improve your likelihood of securing future grants.
Recurring donor retention: Over the average 8-year span of recurring donations, some organizations neglect consistent follow-up with recurring donors. Regularly providing receipts that highlight donation impact reassures recurring donors that their gifts are received and appreciated.

By consistently providing clear, compliant receipts, your organization strengthens relationships, builds trust, and paves the way for more future donations.

IRS Requirements For Donation Receipts

As a tax-exempt organization, your nonprofit must issue donation tax receipts for charitable contributions of $250 or more. Meeting IRS standards helps you avoid penalties or legal issues, so you can maintain your tax-exempt status. This also ensures donors can claim tax deductions without issues.

Here’s a rundown of key elements to include when writing donation receipts based on IRS requirements:

The IRS's requirements for donation of $250+, listed below

Your organization’s name and EIN
Amount of cash contribution
Description (not value) of non-cash contribution
Statement that the organization didn’t provide goods or services
- Alternatively, a description and good faith estimate of the value of goods or services that the organization provided in return for the contribution
- Statement that goods or services that the organization provided in return consisted of intangible religious benefits, if applicable

For in-kind contributions of goods or services, donors must determine the fair market value (FMV) of their gifts. Let’s say you run a nonprofit thrift store like Goodwill or Habitat for Humanity ReStore. Your team would describe the donated items (e.g. “one wooden dining table with four chairs, minor scratches”) on the receipt. Then, your donors could use your thrift store’s prices for those items to determine the FMV of their contributions.

Follow these requirements for any donation you receive, not just those of $250+. This allows donors to keep accurate documentation for tax purposes while reinforcing your organization’s professionalism.

Tips For Better Donation Tax Receipts

Let’s explore how to write a donation receipt that meets legal requirements and engages donors.

Leverage Software That Creates Donation Tax Receipts

Specialized software like ThriftCart makes generating donation tax receipts for your nonprofit both efficient and accurate. ThriftCart is designed to simplify the donation process by ensuring you promptly acknowledge each contribution.

Our platform offers helpful features like:

Staff receipt generation: Your staff can easily create customized receipts. They can select items being donated, add donor information, and collect a signature if needed. When done, they can either print the receipt or email it.
Dropoff donation receipts: Donors can drop off in-kind donations and generate their own tax receipts using a self-service kiosk.
Compliance assurance: ThriftCart ensures that all receipts meet IRS requirements, such as automatically including your EIN. This protects your organization and gives donors the necessary documentation for their tax deductions.

A mockup depicting someone creating a dropoff donation tax receipt with ThriftCart

Our system also makes it a breeze to level up customer support for your thrift store. Generate sales receipts, prompt cashiers to request donations, and encourage buyers to round up their purchases and donate their change to your organization.

To learn about the full capabilities of ThriftCart, check out how one happy client used our software to exceed their donation goals:

Incorporate Impact Statements

One of the driving forces behind a donor’s decision to give is affinity for a cause. eCardWidget’s guide to donation thank-you letters explains that donors want to know how their gifts are used to ensure their funds go to a trustworthy organization. Infusing concrete outcomes into your donation receipts emotionally connects donors to their impact.

Here are some examples of short impact statements and quotes you could include:

Your contribution helps provide nutritious meals to families in need across our community.
Your donated items help fund job training and employment opportunities at our thrift store.
Thanks to your donation, children in our community will receive essential supplies for the upcoming school year.

These short impact statements infuse appreciation into donation tax receipts, which helps supporters envision their concrete impact and displays your gratitude for their gifts.

Make Receipts Easy To Understand and Read

A clean layout organizes information like donation amount and contact information so donors can quickly locate key details. This also contributes to your nonprofit’s professional image. Use a simple, legible font (like Arial, Times New Roman, or Calibri) to ensure donors can easily follow the information without any confusion or strain.

Also, make sure there’s sufficient color contrast to improve readability. For e-receipts, you need a minimum color contrast of 4.5:1 based on the international Web Content Accessibility Guidelines. For context, black text on a white background offers the highest color contrast possible, 21:1. The lowest possible contrast occurs when the text and background colors are identical, 1:1. Use a contrast checker tool like WebAIM Contrast Checker to ensure your ratio meets guidelines.

Your donation receipts can still infuse your nonprofit’s brand, like with your official colors and logo — just make sure everything is well-structured and readable.

Charitable Donation Receipt Templates

Remember: The easiest option is to use software that automates your donation receipts. This way, you won’t forget important elements like your nonprofit’s EIN — but you can create your own receipts with templates and basic software like Microsoft Word, too. While this method can work for smaller organizations with low donation volumes, generating individual receipts can be labor-intensive, prone to compliance oversights, and make it harder to track receipt history.

That said, here are some templates for writing donation receipts. Keep in mind that these are just starting points, and it’s up to your team to ensure that you follow IRS guidelines.

Financial Donation Tax Receipt Template

Since 67% of all nonprofit contributions come from individual donors, it’s essential to give them a receipt that fulfills IRS requirements and strengthens their connection to the cause.

A well-designed receipt can foster trust and encourage repeat donations. Include the donation amount, date of gift, statement about whether any goods or services were provided in exchange, and your nonprofit’s tax ID prominently.

Use the following donation receipt template as a starting point for monetary contributions, including cash, checks, credit card payments, and electronic transfers.

A donation tax receipt template for cash and online donations

Financial Donation Tax Receipt

Receipt ID: [Unique Receipt Number or Code]

Donor Information:
Name: [Donor's Full Name]
Address: [Donor's Address, City, State, ZIP]
Email: [Donor's Email Address]

Donation Details:
Date of Donation: [Donation Date]
Donation Amount: $[Donation Amount]
Method of Donation: [Credit Card, Check, Online Transfer, etc.]

Purpose of Donation:
Your generous gift supports: [Program/Project, or “General Support”]

Impact Statement:
Thank you for your contribution! Your donation helps us [short impact statement, e.g. “provide meals for families in need” or “support wildlife conservation”]. Together, we are making a difference.

IRS Disclosure:
No goods or services were provided in exchange for this donation. Please retain this receipt for your records. It serves as documentation for tax purposes as required by the IRS.

Nonprofit EIN (Employer Identification Number): [Your EIN]

For questions, please contact us:
Phone: [Nonprofit’s Phone Number]
Email: [Nonprofit’s Email Address]
Website: [Nonprofit’s Website URL]

In-Kind Donation Tax Receipt Template

Many organizations accept in-kind donations, but food pantries and nonprofit thrift stores source inventory from donated goods, making an in-kind donation template especially useful.

The following template is designed for non-monetary gifts, such as goods (e.g. goods, clothing, technology), property (e.g. venue space), or services (e.g. marketing or accounting assistance).

It includes elements similar to those in the financial receipt template, such as space for donor information and your nonprofit’s EIN. However, it differs by including factors like a chart where donors can provide descriptions and good-faith estimates of their in-kind contributions, rather than specifying an exact monetary amount.

A charitable donation receipt template for in-kind donations of goods, services, and property

In-Kind Donation Tax Receipt

Receipt ID: [Unique Receipt Number or Code]

Donor Information:
Name: [Donor's Full Name]
Address: [Donor's Address, City, State, ZIP]
Email: [Donor's Email Address]

Donation Details:
Date of Donation: [Donation Date]
Description of Items Donated:

Item Description	Quantity	Condition	Estimated Value
[Description of Item 1]	[Qty]	[New/Used/Etc.]	[Value]
[Description of Item 2]	[Qty]	[New/Used/Etc.]	[Value]
[Description of Item 3]	[Qty]	[New/Used/Etc.]	[Value]

Impact Statement:
Thank you for your contribution! Your donation helps us [short impact statement, e.g. “stock our thrift store with quality items’ or ‘provide school supplies to children”].

IRS Disclosure:
No goods or services were provided in exchange for this donation. The donor is responsible for assessing the fair market value of the donated items. This receipt serves as documentation for tax purposes as required by the IRS.