Tips to Prepare Statements for Tax Year 2025
Before you tip back that celebratory bubbly to say goodbye to the year of challenges and joys that was 2025, there’s one more task to remember to set up for January: preparing tax statements for donors!
As a reminder, if you’ve already mailed/emailed an acknowledgement with the required information you do not need to summarize the year of giving again. But with the high numbers of sustaining givers it is generally worth the effort to create that annual giving summary. Greater Public recommends all tax statements be sent by January 31st.
These tax statements must follow the IRS guidelines, and the relevant points are highlighted below.
- Donors are responsible for maintaining a bank record or written communication for donations of less than $250 and a written acknowledgement from the donee for donations of $250 or more for which they intend to claim a deduction on their tax return.
- Your station or organization is responsible for providing written disclosure to donors who receive goods or services in exchange for a single donation of $75 or more. This written acknowledgement must be “contemporaneous” which is generally understood as being sent before the donor files their tax return.
- There is a “token exception” for “insubstantial goods or services” (such as a thank-you gift). For tax year 2025, to be deemed insubstantial, the fair market value can not exceed:
the lesser of 2% of the payment or $136.00; or… Meets the following criteria: The donation is at least $68.00, and the thank-you gift bears your station’s name and/or logo and is valued at no more than $13.60. - Your station is required to provide a written disclosure or receipt for donations of $75 or more that are partly for goods or services and partly for a donation. Your station must provide a good faith estimate of the fair market value of the item(s). This is referred to as a “Quid Pro Quo” contribution. For more information on the token exception see this blog.
What information should you include on a tax statement?
According to IRS Guide for Charitable Contributions: Substantiation and Disclosure Requirements, the IRS requires the following information:
- The name of organization
- The amount of cash contribution
- A description (but not the value) of non-cash contribution
- A statement that no goods or services were provided by the organization in return for the contribution, if that was the case; or a description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution.
How can my tax statements help me with my donors?
Nearly every station could be doing more strategic engagement with their donors. Donors are telling us and philanthropy researchers that they don’t understand the impact of their gifts, and that they do want to know more.
Annual tax statements, by mail or email, are an opportunity to include a touch-point. As donor retention rates decline, it is critical to connect with and thank donors for their support. Include a note, report or letter with the statement outlining the impact of the donor’s support, stating that you look forward to their continued partnership with your station.
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