Chronicle Live Discussion: Clever Ways to Thank Donors

Published on: by Gene Takagi Category:EVENTS, FUNDRAISING & CHARITABLE GIVING

 

Thank you card
On Thursday, October 31, The Chronicle of Philanthropy is hosting a live video discussion, Clever Ways to Thank Donors, that will show attendees how to be creative in their thank you's and also mindful of legal considerations, including federal rules regarding written acknowledgments and disclosures. You can also view the recorded version on the same site.

Tony Martignetti of Tony Martignetti Nonprofit Radio and Cody Switzer, The Chronicle's Web editor, are hosting. And I'll be a guest along with Claire Axelrad, fundraiser and principal at Clairification.

Cody started us off by asking me about the legal requirements around acknowledging donors for their charitable contributions. I gave a quick rundown of some basic rules:

  • A donor needs a bank record or written communication from the charity that states the name of the donor, the amount of the contribution, and the date of the contribution in order to be able to take a charitable deduction. A charity should be especially diligent about helping the donor establish her deduction when receiving a cash donation.
  • A donor needs more information from a charity for a charitable contribution of $250 or more. Notably, the written acknowledgment from the charity must include a statement that provides either (1) that the charity did not give any goods or services to the donor in return or (2) that the charity did give goods or services to the donor in return (in which case, the acknowledgment should describe the goods or services, including a good faith estimate of their value). There are several cases in which donors could not deduct their legitimate contributions just because the charity didn't provide them with written acknowledgments without one of the two statements above in a timely manner. And the IRS always wins when taking these cases to court.
  • A charity must provide additional information to the donor if providing goods or services back to the donor in exchange for a payment of more than $75, which is part charitable contribution and part purchase price. Such transactions are called quid pro quo contributions. In such circumstances, the charity must provide the donor with a written disclosure including a good faith estimate of the value of goods or services provided to the donor and a statement that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of money (and the fair market value of property other than money) contributed by the donor over the value of goods or services provided by the organization.
  • There are exceptions, including for certain defined token items and membership benefits.

Download Some Donation Receipt Rules for Charities [PPTX]

Tony then asked Claire about creative ways to thank donors. She first emphasized that charities need to thank donors within 48 hours (great advice!). Then she shared with us some examples, including handwritten cards, video thank you's, and baked goods.

See Claire's Pinterest Board on Gratitude – Nonprofits Say Thanks

As the lawyer in the discussion, I natch had to raise some cautions even while noting the importance of expressing gratitude in a variety of clever ways:

  • Exercise reasonable care in selecting any volunteer or staff person to personally engage with your donors, especially if they will be creating food items to give as a thank you. Rule of thumb: consider whether you would trust that person to deliver those items to your kids.
  • Train your volunteers or staff persons on how to engage with your donors. Make sure they don't make any misrepresentations (including stating how the donor's money will be used if that's not really the case).
  • Be careful of the potential dangers of any thank you gift (e.g., nuts in cookies, toys that might be swallowed by small children).
  • Get simple but sufficient licenses and/or releases if filming and/or publicly displaying videos of donors, particularly if children are involved.

Technical difficulties resulted in the recorded discussion being cut off after 45 minutes, but we continued to talk among ourselves as this is a fascinating and important topic for charities. Hopefully, we'll get the chance to do it again!