Send constituents a letter in January that details their tax-deductible donations from the previous calendar year. Help them take all their tax credits, and thank them for their generosity, too.  

Legally, a year-end tax receipt documents that your organization received tax-deductible charitable contributions. It also documents that you are a 501(c)(3) organization eligible to provide such deductions. Thus, this letter should only list revenue transactions (donations, pledge payments, and recurring donation payments). Send a separate letter that lists in-kind donations since constituents must assign a fair market value to these donations.

Note: This article assumes you are familiar with creating letters and filtering. If you need to brush up, see Create a Letter Template, Edit a Letter, and Filter Emails and Letters.

  1. $250 or More
  2. Tax-Deductible Letter
  3. In-Kind Donations Letter

$250 or More

Most organizations only send tax-receipt letters to donors who gave a total of at least $250 in revenue during the year. Create a report to see who these donors are, and then use that report in your letter's filters.

  1. Create a new constituent report.
  2. In the filter area, click Constituent and select Household.
  3. In the Include section, add the transaction filter:
    1. Click Add Filter.
    2. Click Has Transaction icon in reports  Transactions.
    3. Click Has Any and select The Calculated.
    4. Click Amount and select Revenue Amount.
    5. Click Transaction icon in reports Transactions and select Transaction icon in reports Specific Transactions.
    6. In the Include section, click Add Filter.
    7. Click Date.
    8. Change the filter to read Date is During Last Year.
    9. Click OK.
    10. Type 250 in the first Between box. Your filter should look like this:
    11. Click OK until you are back on the main screen.
  4. Click Save And, and then Go to Report List.
  5. Name your report Year-End Tax Receipt Donors and click Save.

Tax-Deductible Letter

Create the tax-deductible letter and filter it to include constituents who gave $250 or more last year. You can reference the report you created above in your letter to save time. See Use Filters from Another Report if you're not sure how to reference a report.

  1. Click Letters icon.
  2. Select Transactions.
  3. In the Describe Your Letter section, select Receipt from the Purpose menu.
  4. Click Next.
  5. Customize your letter as needed. Remove the Amount and Date merge fields.
  6. Add another paragraph with this text: 
    • This letter lists your tax-deductible transactions for [year]. Pledges and soft credits are not included. If you made any in-kind donations, we will send details in a separate letter.
  7. If no goods or services were provided by your organization in return for contributions, add this paragraph:
    • No goods or services were provided by the organization in return for the contribution(s).
  8. If goods or services were provided, add a paragraph with a description and good faith estimate of the value of goods or services, if any, that your organization provided in return for the contribution(s).
  9. Add a data table (see Edit a Letter Template for help with adding a data table). Add the following columns from the Transaction section. If you have some events, consider adding a column for Appeal. This may help donors understand why only part of the Amount is deductible.
    • Type
    • Deductible Amount
  10. Click Insert.
  11. After the table, add a line to total the deductible amounts:
    • Type 'Your total Deductible Amount is'
    • Click Insert Bloomerang Field icon and click Deductible Amount.
  12. After the signature block, add another paragraph with this text: 
    • [Your organization name] is a 501(c)(3) nonprofit organization with EIN #12-3456789. Donations are tax deductible as allowed by law.
  13. Substitute actual values for the year, your organization name, and the organization's employee identification number (EIN). Your letter should look something like Figure 1.

    Figure 1: Letter listing tax-deductible donations

  14. Click Save And and then Keep Editing.
  15. Click Filter.
  16. In the Include section:
    • Reference the "Year-End Tax Receipt Donors" report you created in the "$250 or More" section. Here is what you click:Constituent icon in reportsConstituent > Add Filter > Is InConstituent icon in reportsa Constituent Report> Select a Report > Year-End Tax Receipt Donors. Click OK until you are back on the main screen.
    • Add Type = Donation, Pledge Payment, Recurring Donation Payment
    • Add Date = Last Year.
  17. In the Exclude section:
    • Remove both existing filters.
    • Add Method = In Kind.
  18. Click Save And and Preview.
  19. Continue processing your letters as normal.

Tip: Constituents with bad, incomplete, or missing addresses are skipped. Merge field issues might also cause a constituent to be skipped. Review the skipped recipients and view some strategies for handling them. 

In-Kind Donations Letter

Constituents must assign a monetary value to in-kind donations when filing their tax returns. You can send them a letter that lists their in-kind donations to help them.

  1. Make a copy of the tax-deductible letter and open it. 
  2. Click Details and rename the letter. 
  3. Click Design and make any needed changes to the letter. 
  4. Replace the paragraph about the tax-deductible transactions with this text:
    • This letter lists your in-kind contributions for [year]. You assign a fair market value to these donations for tax purposes. If you made any monetary donations, we will send details in a separate letter.
  5. Change which columns are included in the table:
    • Click Insert Data Table icon.
    • Remove Amount, Type, and Deductible Amount
    • Add the Appeal, Method, and In Kind Description fields. 
    • Click Insert
  6. Delete the line and field that totals the deductible amount. Your letter should look something like Figure 2.

    Figure 2: Letter listing in-kind donations

  7. Click Filter
  8. In the Include section:
    • Delete the Has a Specific Constituent filter. Keep the Type and Date filter. 
  9. In the Exclude section, drag the Method filter and place it next to the Date filter in the Include section. 
  10. Click Save And and Preview
  11. Continue processing your letters as normal.