According to IRS Publication 1771, Charitable Contributions - Substantiation and Disclosure Requirements, donors must have a written acknowledgment from the 501(c)3 nonprofit that receives their donation in order to claim a tax deduction for each charitable contribution that exceeds $250.
The IRS states that written acknowledgments of charitable contributions should include the following:
- Name of recipient nonprofit
- Amount of cash donated OR a description (omitting the estimated amount) of the non-cash contribution received
- As applicable:
- A statement that the nonprofit did not provide any goods or services in return, if that was the case
- A description and good-faith estimate of the value (not cost) of any goods or services the nonprofit provided in return (for example, the market value of an event ticket)
- A statement that the goods or services provided by the nonprofit in return for the contribution were entirely intangible religious benefits, if that was the case
Can I use my automated transaction receipt from Overflow as my charitable acknowledgment letter?
No. That automated transaction receipt is simply to note the details of your transaction for your records. The receiving nonprofit will eventually send you a charitable acknowledgment letter for your gift that is IRS-compliant.*
When will I receive my charitable acknowledgment letter?
The nonprofit you donated to will send you a charitable acknowledgment letter after receiving your donation. Most nonprofits send out acknowledgment letters within 30 days of receiving your donation, and are required to send them out before January 31st of the following year.
Why is the date listed on my stock donation acknowledgment letter different than the date I initiated the transaction?
The IRS defines non-cash assets as having been transferred when they are received by the nonprofit. Stock gifts can take anywhere from 1 day to 2 weeks to process and transfer out of your brokerage account into the receiving brokerage account. Therefore, the received date listed on your stock acknowledgment letter is most likely different than the date the gift was initiated.
*Note: You will not receive a letter immediately as the date noted in the letter must be the date that the nonprofit actually received your donation. In the case of stock gifts, this could be up to two weeks after you initiate the donation.
Overflow does not provide tax, legal, compliance, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, compliance, or accounting advice. Your organization should consult its own tax, legal, compliance, and accounting advisors before sending or concluding any transaction, communication, or otherwise.