Understanding Donation Receipts

 By Janet Marcel

‘Tis the season of hustle and bustle for non-profits – the community events, donations to needy families, winter clothing drives, special holiday services – it’s enough to make anyone’s head spin!  And after the new year, when the rest of us relax into our warm winter hibernations; non-profits are still experiencing the chaos, this time it’s the hectic domination of paperwork.  “Donation receipts” is just one thing on that list.  Because of the complex rules involved, it’s worth taking some time to make sure you get it right.

In order for a family (or company) to claim a tax-deduction for a donated gift, there are very confusing rules the IRS has imposed.  To help make sense of it all, there are a few IRS publications that are worth reading if you are in charge of issuing donation receipts; in addition to a website that guides you through the process with useful videos and articles at www.stayexempt.irs.gov.  All churches are subject to these IRS rules regardless of their tax-exempt status because all churches are automatically qualified organizations for the purpose of accepting donations even if they’re not a 501(c)3 charity. 

Most people don’t need a donation receipt for tax purposes.  Only companies, or people who itemize their deductions on Schedule A (Form 1040) can take a deduction for their charitable contribution.  However, it is a very good practice to send receipts to every giver each January for two reasons.  First, so your ministry is on the forefront of your donor’s mind.  Some donors aren’t members but occasionally send a donation or sponsor an event.  In that case when they get a donation receipt, it immediately peaks their interest to visit the website or to donate again.  Second, people donate to ministries and organizations that seem organized and healthy.  If a donor feels confident that every year he or she will receive a receipt early and doesn’t have to remind someone or call a million times, or substantiate the receipt with check numbers or amounts; they are more apt to donate again and pass the word along to more affluent donors. 

So, the IRS now says that for any donation amount, a taxpayer must support the deduction with something like a bank statement, a cancelled check, credit card statement or a receipt from the organization.  But if a single donation is $250 or more, they must obtain an acknowledgement from the charity to claim the deduction (a bank statement is not enough).  Now, both of these obligations are the donor’s responsibility to obtain, not the organization’s to provide.  So, don’t let anyone scare you into thinking it’s a law to send receipts or you will go to jail.  The only thing that is a requirement for a charity to provide involves a different type of donation.

Contributions are only deductible to the extent they are gifts and nothing is received in return.  A donation made by a donor in exchange for goods or services is known as a “quid pro quo” contribution, and only the amount that exceeds the fair market value is deductible.  (“Quid pro quo” is Latin, and it means “this for that”.)  So, if a charity issues a concert ticket with a fair market value of $40 in exchange for a $100 donation, that $100 is not fully tax-deductible because the donor received something in return.  The IRS says that charities are required to provide a written disclosure when they accept a quid pro quo donation larger than $75. 

The IRS doesn’t provide any template or form for these receipts, so you can use your own creativity if you are in charge of issuing them.  However, it is best practice to have consistency from year to year to help establish the organization’s brand.  You can issue a postcard, a form, a sales receipt, a letter, an email, a certificate; any format you’d like, provided

it has the following.

The name of organization (tax id number or social security number is NOT required)

The amount of cash contribution

Statement that no goods or services were provided by the organization in return for the contribution (if that was the case)

Description of non-cash donations (but not the value)

Quid pro quo donations need to have an estimated value of the goods or services provided in return for the contribution

Many people enjoy giving their time and money for charitable causes especially this time of year.  Instead of looking at donation receipts as just another “task”, use it to express a heart-felt “thanks!” to your fellow supporters.   

Janet Marcel is the director of Paper Trail of Western New York and has been assisting non-profits for over 15 years.  For more information about professionally-crafted donation receipts, visit her website at www.wnypapertrail.com.

5 Questions with Pastor Jim Ruddy

Pastor Jim Ruddy

Senior/Executive Pastor

The Tabernacle

Orchard Park, NY

1) Tell me about your decision to move to Buffalo to pastor The Tabernacle. Was it something you struggled with or no? 

Our decision to move to Buffalo wasn’t arrived at quickly; in fact it was several years in the making.  I came into relationship with Pastor Tommy Reid and The Tabernacle about 10 years ago at a time when the Holy Spirit was enlarging my understanding of the Kingdom.  Pastor Reid extended an invitation to come to Buffalo and spend some time with him in the Scriptures. That initial visit brought about a deep heart-connection and an eventual invitation to serve on The Tab’s Apostolic Oversight Council, part of the Church’s accountability structure. For a number of years I walked with Pastor Reid as he prayerfully considered how the Lord would have him transition the leadership of the Church. At one point I had to wrestle with the question if God was calling me to be his successor ; a question that was not easily answered, especially in light of the fact that my wife Mari-Lee was sensing the Lord’s leading to Buffalo. After a long season of prayer we both agreed that while God had something for us in Western NY, I was not the man to receive the baton from Pastor Reid. It’s hard to express how delighted I was when Pastor Reid selected Dr. Robert Stearns as his successor. First, because I’m convinced that God has uniquely graced him with the capacity for such a role, and secondly, because I thought I was off the hook (Smile). Now, these many years later, Mari-Lee and I are amazed at the way the Lord has brought about the perfect scenario for us to find our rightful place at The Tab.

 2) You talk about being the number 2 man at The Tabernacle now, under Bishop Robert Stearns. Is that an easy adjustment for you coming from a Senior Pastor role in PA?

Actually, the thought of being part of an Apostolic Team is one of the themes the Lord used to capture my attention – sort of like a burning bush – causing me to turn my heart toward what He was doing at The Tab.  Again, because I’m fully persuaded that God has appointed Dr. Stearns as Bishop and Senior Leader of The Tab, I can gladly fill my role as the Five-Fold Pastor, giving my attention to the day-to-day life and ministry of the Church.  Recently Pastor Darius Pridgeon ministered at The Tab, and after seeing how I sort of filled in the gaps, he pulled me aside, smiled and said, “Every church needs one of you.” I liked that. 

3) Can you talk to me about the transition process with Bishop Emeritus Tommy Reid. As someone who has pastored The Tab for more than 50 years, what is his role now at The Tab? 

We can only imagine how challenging it would be for any of us to entrust our legacy to another, especially if we’ve invested more than half-a-century in building it. I’m glad to say that this transition wasn’t handled haphazardly but there was a tremendous amount of dialog regarding the various roles each of the team members would fulfill.  Although Bishop Reid has released the oversight of the Church, he is still fully recognized as the spiritual father of the House and we are thrilled that he has his rightful place of honor at The Tab. Along with this he has resumed a most aggressive travel schedule ministering outside the Church on a regular basis; something that has always been an important part of his calling.

4) What is your vision for The Tab, say 5 years from now? 

Well now you’re touching on a challenging topic. The last time I asked God to give me a well-articulated vision of what He was doing with the Church, He took me to Revelation, Chapter 1 and told me, “Your vision will not be of the candlestick, but of the One who walks among the candlesticks!” I’m sure you’d agree that one thing that has hurt the work of God has been when a new leader arrives in an established Church and tries to force their vision to bear upon the congregation.  I believe the vision is resident in the House, and for The Tab that means being what we’ve always been – a House of His Presence focused on

intimately knowing Jesus and passionately making Him known throughout the region, the Nation, and the World. Bishop Stearns and I, along with Pastor Aimee Reid and the rest of the team, are committed to seeing this vision comes to full fruition.

5) Coming from the outside in, what is your perception of the opportunity for the Gospel in Buffalo? Is it ripe for harvest so to speak or hard ground? 

First off, I’ve been greatly encouraged by the cooperation that exists between the pastors and churches throughout the region. I’d only been in Buffalo for a few  days when I was invited to sit with a group of dynamic leaders from across denominational lines who are committed to winning this City. While some may choose to go it alone, it’s clear that there is a Spirit-led coming together of Kingdom-minded leaders who are seeking God for His strategy to reach Buffalo. In the same way that God met Joshua and shared his plan to take Jericho, I believe He will answer those of us who are willing to lay down our egos and logos in order to see the Gospel bring renewal and restoration to this region. For me, I’m glad to be just one more voice that is getting ready to shout, “God has given us the City!”

Perspectives Starts January 20

-A different LIVE instructor every week from diverse ministry & cultural backgrounds- pastors, professors, bible-translators, missionaries, businessmen, church-planters.
-Every class is an interactive learning experience- including dynamic prayer, diverse worship, creative demonstrations, cultural experiences and group discussions.
-Anyone can take the class for a certificate but Undergraduate and Graduate level credit also available.
-This class is life changing and you won't be disappointed. Be one of the 130,000 people  world-wide that have taken the course so far.

WHAT is Perspectives?

Perspectives on the World Christian Movement is a catalytic course designed to equip the people of God to partner with Him in His mission to reach all peoples, tongues, tribes, and nations. It presents the biblical, historical, cultural, and strategic aspects of fulfilling the Great Commission. We encourage anyone who is serious about gaining a deeper understanding of God’s ultimate purpose in the world to attend this course.

Perspectives seeks to reveal the nature of God's heart to be worshipped by all nations, and that we are called to be a part of HIS purpose regardless of whether we feel called to serve overseas, at home or in our own work place. It's about a deeper understanding of who God is, what He's about, and how we are ALL called to be a part of it. Throughout the 15 weeks, students will learn about God’s nature, His purpose, and how He uses ordinary people like us to bring the glory to His name.