Shared Services: Five Tips for Accepting and Acknowledging Gifts

As we enter the season of giving and approach year end, here are five tips to keep in mind for accepting and acknowledging gifts.

1. Make sure gifts are posted in the appropriate calendar year for tax purposes.  While fewer people will itemize their deductions this year, it’s estimated that 11% of  taxpayers will itemize, and when the gift is posted could matter.

  • Checks have to be in the mailbox by the end of the year.  A gift could be dropped in in the mail box on December 31 and it may not be postmarked until after January 1.  You should establish a policy for how to comply with gifts that are determined to have been dropped in the mailbox by December 31.  Sharing this with staff in advance will minimize confusion when processing gifts.
  • For credit card gifts, you must post the gift in the year that the transaction occurred.  If a donation is made via your website, then the transaction will be processed immediately.  However, if you’ve done a mailing where donors write in their credit card information, then you need to ensure that you process the credit card transactions by December 31 at the latest.  If your offices are closed over the holidays and you wait to run the credit card when you return, then the gift will be counted in 2019.

2. Stock Gifts

Stock gifts may take several days to transfer.  You cannot count the stock gift until you have received it.

3. IRA Gifts

If a donor makes a gift from their IRA, make sure the gift comes directly from their IRA to your organization.  If it does not, then the donor may be taxed on the gift.

4. Acknowledge the Appropriate Donor

If a gift is given through a Donor-Advised Fund or Private Foundation, the gift must be posted to that organization and NOT the individual(s) that directed the gift.  Use the name on the check to determine where it should be posted and who should be acknowledged.

5. Acknowledgement Letters and Thank You Notes

On acknowledgement letters, indicate that no goods or services were received for the gift.  However, if a good or service was given in exchange for the gift, indicate that as well.

We’re all waiting to see how tax reform will impact giving this year. Though charitable giving rose 14% last quarter, much of the surge was due to an increase in large gifts, according to the Chronicle of Philanthropy.  At Support KC, we’re here to help you navigate fund development process.  Please don’t hesitate to reach out to see how Support KC can help contribute to your fund development success.  Also, to learn more, please visit the IRS requirements for gift acknowledgement.

Jenne Vanderbout, Ed.D
Chief Operating Officer
Support Kansas City, Inc.

About the Author

Support KC

For the benefit of the nonprofit sector everywhere, we wanted to provide resources for ways we can continue to operate and grow within this era. And once social distancing begins to fade, what lessons can we take from this to improve our operations permanently. Come back often for more updates.

Accounting & Fiscal Management

  • Structure general ledger, chart of accounts, setup assistance
  • Monthly accounting support: accounts payable, accounts receivable, deposits and receipts, bank reconciliation
  • Payroll preparation
  • Preparation of management reports
  • Financial report preparation for board meetings
  • Grant tracking and reporting
  • Preparation of IRS Form 990
  • Preparation of annual 1099’s
  • Preparation of schedules for independent audit, assistance with audit completion
  • Cleanup of past accounting records
  • Budget preparation assistance, reporting and analysis
  • QuickBooks training

Governance & Strategy Development

  • Governance training
  • Executive mentoring and coaching
  • Board retreat facilitation
  • Strategic planning documents
  • Outcomes and impact measurement and reporting
  • Survey assistance

Database Management

  • Database design and development
  • Gift and demographic data entry
  • Donor acknowledgement letters
  • Import and export of data; mail merges; exports to mail house
  • Data and donor analysis
  • Integration with accounting systems, fund development and social media activities
  • Database training
  • Ongoing support and technical assistance

Fund Development

  • Create annual fund development plan
  • Fund development plan audits
  • Board Training
  • Capital campaigns
  • Grant management: research, writing and reporting
  • Major gifts and planned giving
  • Special event planning and support
  • Annual fund drives
  • Annual appeal mailings