Often at this time of year I field questions about whether churches have to file annual donation statements. Here is what you need to know about how to prepare church giving statements.
First off, your church doesn’t have to file any statements or records with the IRS. The church giving statements are mailed to the donors themselves, not the government. In fact, strictly speaking, your church doesn’t even have to send those. You’d be stupid not to, but the burden really falls on the donor to prove their donation.
Why Your Donors Want Giving Statements
Long gone are the days that the IRS takes a donor’s word. They require proof for the donation to be a valid tax-deduction. If the total gift for the year is less than $250, the donor can provide their own proof (like a credit card statement or cancelled check). They don’t need anything from the nonprofit. But if their total for the year is $250 or more, they can’t write it off their taxes unless they also have a receipt or statement from the charity as proof.
The IRS also requires that such written statements be “contemporaneous” (issued in a timely manner). And they require that the donor have the proof in hand before they file their taxes. So it has become customary for churches to send a list of each donor’s gifts as an annual statement no later than January 31, which is when all tax statements are due (W2’s, 1099’s, etc).
What You Have to Include
The good news is that there’s no official format you have to use. The IRS just requires a few simple things on the statement for it to count:
- Your church’s name
- Your church’s EIN/tax ID number (recommended but not required)
- The amount and date of each monetary gift
- Some version of the following statement:
“No goods or services were provided by our organization in return for the contribution apart from intangible religious benefits.”
The summary above really only covers monetary contributions. You have to use different language if there was a non-cash gift (say, a video projector). Here’s a Donor Acknowledgement Letter Template you can use for that.
The other situation this doesn’t cover is if you’ve given the donor something worth more than $10 in consideration of the gift. Most churches wouldn’t do this for local givers, but is likely to come in to play if you are sending thank yous to outside supporters. Like if you send a hooded sweatshirt or hardbound book to supporters at the end of the year. There are even more complicated disclosures required if you do, so play it safe by not spending more than $10 on any thank you gift.
The easiest way to process all of your church giving statements is to keep track of each gift during the year using a church management software (ChMS) solution. You build a profile for each donor/family, record gifts during the year, and then in January you click a button to spit out the giving statements.
Otherwise you might consider recording all of the gifts in a spreadsheet and then mail-merging that data into a form letter that includes the requirements above. Or hire a bookkeeper.
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