All Parish Donors Must Be ThankedFailure to Send Annual Donation Records and Letters of Appreciation Jeopardizes Future Gifts

 

Have you ever given a gift to anyone and not been thanked? What is your reaction? They must not have liked it. They must not have needed it. I certainly will not give them another gift. Parishioners often have these same kinds of reactions if the parish fails to annually send an end-of-year donation record and thank-you letter. Making these records available for pick-up or making donors actually request the statement does little to enhance the all-important relationship with the donor and can actually jeopardize any future giving. Here’s why.

Over the last twenty years there has been a tremendous growth in the number of non-profit organizations and also in the study of what makes an individual donate to any type of charitable organization. This research shows that more than anything else donors want to know that their gifts have made a difference. If we do not thank donors and let them know some of the ways that their gifts are making a difference, donors do not feel that their gifts are valued by the organization.

In the parish community we could argue that our parishioners should give out of a sense of stewardship or in grateful response to God’s many blessings to them. Yet, even if stewardship is the primary motivation for our giving, good stewards still want to know that the gifts they give are making a difference. When a donor does not get the sense that the parish values the gifts, even a good steward could be tempted to give his or her gifts to an organization that is recognizing and appreciating those gifts.

To be appropriately grateful to all parishioners, a parish should do the following:

  • Annually send a donation record and thank-you letter for all Offertory gifts. See A Simple Formula for A Thank-You Letter 207.00 Kb and New Tax Substantiation Rules for 2007 for more information on writing and sending thank you letters and donation records.
  • If you are using an Electronic Offertory Giving service provider, be sure that the parish sends the thank-you letter to those donors, too. The gift is to the parish not the provider and thus the parish should send the note. Also, when the parish sends the thank-you and donation record it provides a way to double check that the gift the donor designated was indeed transferred to the parish.
  • If parishioners make gifts to the parish by just dropping a check into the basket without using an envelope, be sure donor information from the check is recorded in your Servant Keeper files and these individuals, too, receive an annual thank-you letter. Do not let money counters treat checks like cash. All checks should be recorded in donor files and recognized annually.
  • Consider sending a special thank-you letter the first time a parishioner makes a gift. This immediately reinforces the giving habit with them.
  • Immediately recognize all planned gifts, such as will bequests and gift annuities. Even when the actual donor is deceased, family members appreciate knowing that the gift has made a difference at the parish.

For more information on additional appreciation strategies, contact Dave Baranowski at 314-792-7215 or davidbaranowski@archstl.org.

A Simple Formula for a Thank-You Letter

When you send tax substantiation letters to your parishioners, besides the legal and financial information, be sure to include a thank-you letter with these six elements.

  1. Clearly identify why you are writing them. For example:
    On behalf of our parish community and all those who have benefited from your generosity, I want to thank you for the faithful and generous financial contributions you have made to NAME OF PARISH this year.
  2. Let them know how their gift has made a difference. For example:
    Your support allows our parish to be the hands and face of Jesus in so many ways. Our school, our beautiful liturgies, our youth program, our outreach to the elderly, and our assistance to the poor all exist because of your generosity.
  3. Praise their generosity or spirit of stewardship. For example:
    Your commitment to our parish is truly an inspiration to me.
  4. Assure them of the parish’s own good stewardship. For example:
    I assure you that, for my part, I am committed to making wise and prudent use of the many financial gifts parishioners like you have entrusted to my care. Our Parish Council, Finance Council and parish staff strive constantly to properly manage and care for the resources and facilities of this wonderful parish.
  5. Ask for their continued support. For example:
    I hope that I can count on your continued support in the year ahead. Together, we can make our parish a dynamic place of prayer, faith formation and ministry.
  6. Ask for God’s blessings upon them. For example:
    May our generous and abundant God, who is the source of every good gift, continue to bless you and your family.

NEW TAX SUBSTANTIATION RULES FOR 2007 

A tax law newly effective in 2007 for individuals disallows a charitable deduction for any contribution of a cash, check, or other monetary gift unless the donor satisfies certain substantiation requirements. Before this law was enacted, individuals were only required to obtain substantiation for gifts of $250 or more. Because the tax law now requires substantiation of all cash, check or other monetary gifts regardless of size, charities should provide donors with substantiation letters thanking them for their gifts.

The new law requires a donor to maintain, as a record of all monetary contributions, a bank record or a written communication from the donee showing the name of the donee organization, the date of the contribution, and the amount of the contribution. Although a cancelled check will satisfy these requirements, the most advantageous form of substantiation is a written letter from the charity acknowledging receipt of the contribution and showing the contribution date and amount. This allows the charity to thank the donor at the same time as it fulfills the donor’s substantiation requirements to obtain a tax deduction for the contribution.

Because charities should have substantiation letter procedures in place from previous years for gifts in excess of $250, expanding those procedures to now include all cash, check, or other monetary contributions should be a simple step. Since the rules that apply to contributions of $250 or more are more rigorous than the new rules that apply to cash, check, or other monetary contributions under $250, satisfying those more rigorous rules will automatically satisfy these new rules. Failure of a donor to maintain a record of these gifts prohibits the donor from deducting the contribution on an income tax return.

Charities should proactively use this new tax law to thank their donors for their contributions. Charities that fail to acknowledge gifts from donors, regardless of size, do not realize the amount of future gifts that they may lose because of that oversight.