Shared Services: Five Tips for Accepting and Acknowledging Gifts

by Support KC

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.

 

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

 

  1. 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.

 

  1. 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.

 

  1. 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.