You can send constituents a letter in January that details their tax-deductible donations from the previous calendar year. You can help them claim 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. Because of these requirements, this letter should only list revenue transactions (donations, pledge payments, and recurring donation payments). You must send a separate letter that lists in-kind donations, because constituents must assign a fair market value to these donations. For more information, read the IRS Guidelines for Substantiation and Disclosure Requirements.
This article explains how to generate and mail a letter for tax-deductible or in-kind donations. To send a mass email to constituents that includes a link to their giving statement, or to download a giving statement for an individual constituent, read About Year-End Giving Statements.
Note: This article assumes that you are familiar with creating letters and filtering. If you need to brush up on these topics, read Create a Letter Template, Edit a Letter Template, and Filter Letters.
Mail Letters for Tax-Deductible Donations
Create a Year-End Tax Report (Revenue)
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 using the Year-End Tax Report (Revenue) template to see transactions, and then use that report in your letter's filters.
Click Reports.
Click New Reports.
Click Start From a Template.
Select Year-End Tax Report (Revenue).
Click Details.
Enter a Name for your report such as "Year-End Tax Receipt Revenue."
Click Save And, then select Keep Editing.
By default, the Year-End Tax Report (Revenue) report filters include donations, pledge payments, and recurring donation payments with a date of last calendar year, from households that have given at least $250 in the last calendar year. It excludes any transactions with a method of in-kind or marked as refunded.
Note: The report template filters for last year. If you are working on the report prior to January 1st, and you would like to preview the gifts from this calendar year, you can change the two date filters in the report to this year, or filter for the specific date range.
(Optional) Modify Date Filters
If you are previewing the report prior to January 1st and would like to preview transactions from this year, modify the date filters.
Click the first include filter, Date is last year.
Click Last year and change it to This year, then click OK.
Click the third include filter, Has a Specific Constituent.
Click Is a Specific Constituent.
Click Sum of Revenue Amount of Specific Transactions.
Click Date is last year.
Click Last year and change it to This year.
Click OK four times.
The report now shows data for this year instead of last year. Be sure to change the dates back using the same process when you reference this report for your letter.
Create a Tax-Deductible Letter
Create the tax-deductible letter and filter it to include constituents who gave $250 or more last year. In your letter, you can reference the report you created in the previous section to save time. For more information about how to reference a report, read Use Filters from Another Report.
Click Communications.
Click Letters.
Click New.
On the Transactions tile, click Select.
Enter a Name.
From the Purpose list, select Receipt.
Click Next.
Customize your letter as needed.
Remove the Amount and Date merge fields.
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.
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).
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).
Add a data table. For help with data tables, read Edit a Letter Template.
Add the following columns from the Transaction section. If you have events, consider adding a column for Appeal. This might help donors understand why only part of the amount is deductible.
Type
Deductible Amount
Click Insert.
After the table, add a line for the total deductible amount:
Add this text: Your total Deductible Amount is
Click the Insert Bloomerang Field icon and click Deductible Amount.
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.
Substitute actual values for the year, your organization name, and the organization's employer identification number (EIN). Your letter should look something like this:
Click Save And and then click Keep Editing.
Click Filter.
In the Include section, do the following to reference the "Year-End Tax Receipt Revenue " report that you created in the "Year-End Tax Report (Revenue)" section:
Click Is in a Transaction Report.
Click Select a Report.
Click Year-End Tax Receipt Revenue.
Click OK.
In the Exclude section, remove both existing filters.
Click Save And and Preview.
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.
Create a Tax-Deductible Letter for Skipped Email Recipients
If you send a year-end giving statement mass email, Bloomerang CRM might not send the email to some constituents. Bloomerang CRM automatically skips constituents in these cases:
Bad, incomplete, or missing email address. The constituent does not have a valid email address in Bloomerang CRM.
No matching email interests. The constituent unsubscribed from the email template interest or opted out of all emails.
You can create a custom letter for those constituents. In the letter, reference the “Year-End Tax Report (Revenue)” report and add an interaction filter for the original email message.
To create a year-end tax letter for skipped email recipients:
Click Communications.
Click Letters.
Click New.
Select Transactions.
In the Describe Your Letter section, enter a Name for the letter.
From the Purpose drop-down list, select Receipt.
Click Next.
Click Filter.
In the Include section, click Add Filter.
Select Is in a Transaction Report.
From the Select a Report drop-down list, select Year-End Tax Report (Revenue).
Click OK.
In the Exclude section, click the existing Has a Specific Constituent filter.
In the Include section, click Or.
Click Has Interactions.
Click Interactions, then Specific Interactions.
In the Include section, click Add Filter.
Click Date.
Click During, then Between.
In both date boxes, enter the date that you sent the original tax summary email.
Click OK once.
Next to the Date Is filter, click And.
Click Subject.
In the Subject Contains text box, enter the Subject line of the original tax summary email. You must use the exact wording.
Tip: Enter the Subject from the Details tab. Do not enter the template name.Click OK once.
Verify that your filter looks like this:
Click OK.
Verify that your filter looks like this:
Click OK.
Verify that your filter looks like this:
Click Save And, then Preview.
Continue processing your letters as normal.
Mail Letters for In-Kind Donations
Create a Year-End Tax Report (In Kind)
Constituents must assign a monetary value to in-kind donations when filing their tax returns. Create a report using the Year-End Tax Report (In Kind) template to see in-kind transactions, then use that report in your letter's filters to notify them of their in-kind gifts.
Click Reports.
Click New Report.
Click Start from a template.
Select Year-End Tax Report (In Kind)
Click Save And, and then click Keep Editing.
Name your report something descriptive, like "Year-End Tax Receipt In Kind," and click Save.
By default, the Year-End Tax Report (In Kind) report filters include transactions with a date of last year, transaction types of pledge payment, donation, or recurring donation payment, and transactions with a method of in kind.
Note: The report template filters for last year. If you are working on the report prior to January 1st, and you would like to preview the gifts from this calendar year, you can change the two date filters in the report to this year, or filter for the specific date range.
(Optional) Modify Date Filters
If you are previewing the report prior to January 1st and would like to preview transactions from this year, modify the date filter.
Click the first include filter, Date is last year.
Click Last year and change it to This year, then click OK.
The report will now display data for this year instead of last year. Be sure to change the date back using the same process when you reference this report for your letter.
Create an In-Kind Donations Letter
To mail a letter to constituents that lists their in-kind donations, use the report that you created from the Year-End Tax Report (In Kind) template.
To create an in-kind donation letter:
Make a copy of the tax-deductible letter and open it.
Click Details and rename the letter to "Year-End Tax Letter In-Kind."
Click Design and make any needed changes to the letter.
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.
Change which columns are included in the table:
Click the Insert Data Table icon.
Remove Amount, Type, and Deductible Amount.
Add the Appeal, Method, and In Kind Description fields.
Click Insert.
Delete the line and field that totals the deductible amount. Your letter should look something like this:
Click Filter.
In the Include section:
Click Is in a Transaction Report .
Click Year-End Tax Receipt Revenue.
Search for and select the report that you created from the Year-End Tax Report (In Kind) template. In our example, we named the report "Year-End Tax Receipt In Kind," but you might have chosen a different name.
Click OK.
Click Save And and Preview.
Continue processing your letters as normal.