Tab 24: Sample Gift Acknowledgement Letters

Required Documents

• Cash gift letter
• Non-cash gift letter
• Gift of stock letter

• Gift to donor advised fund letter

 

How do I correctly write a gift of stock letter that includes stock values?

Many foundations receive gifts of stock, immediately convert the stock into cash, and then state the amount of funds received as a result of the sale in their gift of stock letter. A letter that contains the following language will likely fail the standard: "Thank you for your gift of 100 shares of XYZ stock. The value of your charitable deduction is $10,000."

IRS rules require that acknowledgement letters for gifts of appreciated property, including stock, should describe the property but not state a value. However, if done correctly, the common practice of including valuation information such as the high, low, or average per share or the amount deposited into the donor's fund as a courtesy to the donor, will not cause your community foundation to fail this standard. The letter should give an adequate description of the property and be clear that any valuation information is being provided strictly as a convenience. If the letter includes valuation information, additional language encouraging the donor to seek advice from a tax advisor for the tax deductible amount of the gift is required.

Taking the insufficient example used above, one might include the following language in a gift of stock acknowledgment letter: "Thank you for your gift of 100 shares of XYZ stock. The stock was sold on November 1, 2008, with a day's trading high of $101.75 and a low of $99.50. The amount $9,750, after fees, was deposited into your fund account. This information is being provided as a courtesy and you should seek advice from your personal tax advisor for the tax deductible amount."

What language should be included in the gifts to donor advised funds letters?

Under the Pension Protection Act, donors must obtain an acknowledgement of all gifts made to a donor advised fund. Community foundations should submit a sample gift acknowledgment letter for a gift to a donor advised fund that states that the community foundation has exclusive legal control over the contributed assets as required by law. Note that the community foundation sample acknowledgment letter for a gift of cash or non-cash property could also fulfill the requirement for a sample acknowledgment letter for a contribution to a donor advised fund.

Our community foundation holds a fundraising dinner every year. Are there requirements for this type of acknowledgement letter?

In this instance the donor is receiving something of value in return for the gift. For example, at a fundraising dinner the donor pays $200 for a ticket to a dinner that is valued at $50. The community foundation must provide a value for what the donor is receiving in return for the ticket. If you hold fundraisers of this nature, you should provide a sample gift acknowledgment letter.

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