Year-End Giving Statements for Nonprofits: IRS Requirements and How to Automate

Every January, your team faces the same challenge: pulling together year-end giving statements for every donor who contributed to your organization. If you're doing this with spreadsheets, mail merge, and manual cross-referencing, you know the pain. This guide covers exactly what the IRS requires, what your statements need to include, and how to turn a multi-day project into a 15-minute task.

For churches specifically, we have a dedicated guide covering year-end giving statements for churches with tithe and offering-specific considerations.

Why Year-End Giving Statements Matter

For Your Donors

Charitable contributions to 501(c)(3) organizations are tax-deductible under IRC Section 170. For donors to claim their deduction, they need documentation:

• Gifts under $250: A bank record (canceled check, credit card statement, or bank statement) is sufficient for the donor's tax records.
• Gifts of $250 or more: A written acknowledgment from your organization is required. A bank record alone is not enough. Without your written acknowledgment, the donor cannot legally claim the deduction.

Your year-end giving statement serves as this written acknowledgment for all gifts throughout the year. One comprehensive statement satisfies the requirement for every donation — the donor doesn't need a separate receipt for each gift.

For Your Organization

Beyond the legal requirement, year-end giving statements are a stewardship touchpoint. They show donors the total impact of their generosity over the year. A well-formatted statement reinforces trust and can include a brief thank-you message that strengthens the relationship for the year ahead.

Organizations that send clear, timely giving statements see higher donor retention rates. When donors can easily verify their contributions and file their taxes without hassle, they're more likely to give again.

What the IRS Requires

The IRS has specific rules about what a charitable contribution acknowledgment must contain. Getting this wrong can create problems for your donors — and for your organization's credibility.

Required Elements

Every year-end giving statement must include:

1. Your organization's name — The legal name of your 501(c)(3) as registered with the IRS.
2. The amount of each cash contribution — List every cash donation with its date and amount. "Cash" includes checks, credit cards, ACH transfers, and any other monetary gifts.
3. A description of non-cash contributions — If a donor gave property, stock, vehicles, or other non-cash items, describe what was donated. Do not assign a dollar value — the IRS requires the donor to determine fair market value themselves.
4. A quid pro quo disclosure — State whether your organization provided any goods or services in exchange for the donation. If yes, provide a good-faith estimate of the value of those goods or services.
5. A statement of tax-exempt status — Confirm that your organization is a 501(c)(3) tax-exempt organization and that the contribution is tax-deductible to the extent allowed by law.

What to Include for Different Donation Types

Donation Type	What to List	Value on Statement?
Cash, check, credit card	Date and exact amount	Yes — full dollar amount
ACH / bank transfer	Date and exact amount	Yes — full dollar amount
Stock / securities	Date, number of shares, ticker symbol	No — donor determines FMV
In-kind (goods)	Date and description of items	No — donor determines FMV
In-kind (services)	Not required to acknowledge	N/A — services are not deductible
Vehicle donation	Date and description	Depends on how org uses the vehicle
Cryptocurrency	Date and description of the asset	No — donor determines FMV

The Quid Pro Quo Rule

If your organization provided goods or services in exchange for a donation, you must disclose this. Common examples:

• Gala tickets: If a donor paid $500 for a gala ticket and the dinner and entertainment were worth $150, your statement should note that the deductible amount is $350.
• Auction items: If a donor won an auction item worth $200 for a bid of $500, the deductible amount is $300.
• Small token gifts: If you gave donors a coffee mug, t-shirt, or other thank-you gift worth less than $13.50 (2026 threshold), you can disregard it — the full donation is deductible. This is called the "token exception."

The threshold amounts are adjusted annually for inflation. For gifts where the donor's payment exceeds $75, you must provide a written disclosure statement.

When to Send Statements

Send year-end giving statements by January 31st. This is the standard practice and gives donors time to use the statements for tax filing.

The IRS rule is that the written acknowledgment must be in the donor's hands before they file their tax return — or before the filing due date (including extensions), whichever comes first. Since some donors file early in February, January 31st is the safe target.

Timeline for Your Team

Date	Action
January 1-7	Close your books for the prior year. Ensure all December donations are recorded.
January 7-15	Generate year-end giving statements. Review for accuracy.
January 15-20	Send email statements to donors with email addresses on file.
January 20-25	Print and mail statements for donors without email.
January 31	All statements delivered.

If you're using donation tracking software that records gifts throughout the year, generating statements is a matter of running a report. If you're reconciling between spreadsheets and bank statements, this timeline is much tighter.

How to Format a Year-End Giving Statement

A professional giving statement should include the following sections:

Header

• Your organization's legal name and address
• Your EIN (Employer Identification Number)
• Statement date and tax year

Donor Information

• Donor's full name (as it should appear on their tax return)
• Donor's mailing address

Contribution Summary Table

Date	Type	Description	Amount
01/15/2025	Check	General Fund	$500.00
03/22/2025	Credit Card	Annual Campaign	$250.00
06/10/2025	ACH	Building Fund (Restricted)	$1,000.00
09/05/2025	In-Kind	50 canned goods	N/A — donor determines FMV
11/20/2025	Credit Card	Year-End Appeal	$500.00
Total Cash Contributions			$2,250.00

Required Disclosures

• Tax-exempt status statement: "Your organization name is a 501(c)(3) tax-exempt organization. Your contributions are tax-deductible to the extent allowed by law."
• Quid pro quo statement: "No goods or services were provided in exchange for your contributions" — or a disclosure of goods/services provided with estimated values.
• Non-cash contribution note: "The value of non-cash contributions is not included in the total above. Donors are responsible for determining fair market value for tax purposes."

Thank-You Message

A brief, sincere paragraph thanking the donor for their support. This is optional from an IRS perspective but important for stewardship.

The Manual Process vs. Automated Process

The Manual Approach (Spreadsheets + Mail Merge)

Most small nonprofits generate giving statements this way:

1. Export donation data from your CRM or spreadsheet
2. Cross-reference with bank statements to verify amounts
3. Sort by donor and calculate totals
4. Create a mail merge template in Word
5. Generate individual letters for each donor
6. Manually review for errors (misspelled names, wrong amounts, missing gifts)
7. Print, fold, stuff envelopes, and mail — or convert to PDF and email individually

Time required: 2-5 full days for an organization with 200-500 donors. More if your data lives in multiple systems that need reconciliation.

Common errors: Missed donations that weren't entered in the system, duplicate entries, wrong fund designations, transposed numbers, and donors who gave through multiple channels (online + check) getting incomplete statements.

The Automated Approach (Purpose-Built Software)

With integrated donor management software that records donations throughout the year:

1. Click "Generate Year-End Statements"
2. The system pulls every donation by donor, including all payment types and fund designations
3. Review the batch for completeness
4. Send by email (or download PDFs for printing)

Time required: 15-30 minutes. The work was done all year as donations were recorded.

Error rate: Near zero — because every donation was recorded at the time it was received, with automatic fund categorization and donor matching.

Alignmint generates year-end giving statements directly from your donation records. Every gift — cash, check, credit card, ACH, stock, and in-kind — is included automatically. Statements are formatted with all IRS-required disclosures and can be sent by email or downloaded as PDFs. Because Alignmint combines your donor CRM with fund accounting, the statements include proper fund designations (restricted vs. unrestricted) and the totals always match your general ledger.

Common Mistakes to Avoid

1. Assigning Values to Non-Cash Donations

This is the most common error. Your organization must never assign a dollar value to in-kind donations on the giving statement. The IRS requires the donor to determine fair market value. Your statement should describe the item donated (e.g., "one Dell laptop computer, used condition") but leave the value blank.

2. Missing the $250 Threshold

Donors cannot claim a deduction for any single gift of $250 or more without your written acknowledgment. If you don't send statements, your donors lose their deductions. This damages your relationship and your reputation.

3. Including Volunteer Hours

Volunteer time is not a tax-deductible charitable contribution, even if you track volunteer hours and calculate an in-kind value for financial reporting purposes (per FASB ASC 958-605). Do not include volunteer hours on giving statements.

4. Forgetting Quid Pro Quo Disclosures

If you held a gala, auction, or any event where donors received something of value in exchange for their payment, you must disclose the fair market value of what was provided. Failing to do this can result in penalties for your organization and disallowed deductions for your donors.

5. Sending Late

Statements sent in March or April create frustration for donors who file early. January 31st is the standard. Donors expect it. Miss it and you'll get phone calls.

Special Cases

Recurring Donors

For donors who give monthly or on another recurring schedule, list each individual gift with its date and amount — don't just show a single annual total. Donors need to see each transaction for their records, and the IRS requires acknowledgment of each gift of $250 or more individually.

Matching Gifts

If a donor's employer provides a matching gift, your statement should only include the gifts made directly by the donor. The matching gift comes from the employer's foundation and should be acknowledged separately to the corporation, not to the individual donor.

Donor-Advised Fund Grants

When you receive a grant from a donor-advised fund (like Fidelity Charitable or Schwab Charitable), the DAF is the legal donor — not the individual who recommended the grant. The acknowledgment goes to the DAF, not to the individual. Most DAFs handle their own tax receipts and do not need one from you.

Pledges

Pledges are not donations. Do not include unfulfilled pledges on giving statements. Only include actual payments received during the tax year.

Year-End Giving Statements and Fund Accounting

If your organization tracks restricted funds, your giving statements should indicate which gifts were designated for specific purposes. This isn't an IRS requirement, but it's good stewardship — donors want to see that their designated gifts were recorded correctly.

A statement that shows "Building Fund — $1,000" and "General Operating — $500" confirms to the donor that you honored their intent. This builds trust and encourages future restricted giving.

When your CRM and accounting system are unified, fund designations appear automatically on giving statements because the donation was recorded to the correct fund at the time of entry. When they're separate systems, someone has to manually cross-reference fund designations — another source of errors.

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Ready to generate year-end giving statements in minutes instead of days? Schedule your free setup or explore Alignmint's donor management features.