Introduction
For many years, the nonprofit industry standard has been to send EOY donor tax receipt letters by postal mail by January 31 of the subsequent year. Recently, many organizations have started sending out these tax letters via email (please consult your CPA or tax consultant regarding legality of sending by email rather than postal mail).
Example IRS Language
Whether you send these letters by postal mail or email, they should include the required IRS legal language and the aggregate amount donated from the prior year for each donor.
Example of IRS required language (PTP is not the authority on this legal language, contact your organization's CPA, legal or tax consultant for confirmation):
No goods or services were provided in return for your "X year" contribution(s). Your contributions to "your organization name" are tax-deductible to the extent provided by law, please contact your tax advisor regarding deductibility.
"Organization Name (EIN #xx-xxxxxxx)" is a "X state"-based nonprofit recognized as a tax-exempt public charity under Sections 501(c)(3) and 170(b)(1)(A)(vi) of the Internal Revenue Code.
Both of these types of statements should be included in your letter.
There is a simple Powerbase workflow for sending your EOY tax receipt letters to donors by email:
Create and save your EOY tax letter as a Mosaico Template:
MAILINGS > MOSAICO TEMPLATES
Either create a brand new template, or copy an existing template that already has the theme and logo that you want and edit it to include your EOY letter content and save it as a new template.
When creating your template content, use TOKENS to pull in demographic information (First name, last name, address, dear first name, etc...) and most importantly, use the TOTAL DEDUCTIBLE CONTRIBUTIONS LAST YEAR token to pull in the aggregate donation amount from the prior year for each donor.
Note about the TOTAL DEDUCTIBLE CONTRIBUTIONS LAST YEAR token: the deductibility of contributions in your database and thus the contributions that your summary field includes in the deductible total depends on how you have set up the parameters for your financial types and summary fields. For example, if you have created a new financial type that you intend to be deductible but you have not set it up properly to be considered deductible, the summary field token "Total deductible contributions last year" will not know to include it. For help determining if your summary field is configured correctly, see our summary fields document or contact us at support@progressivetech.org
Create your group of contacts who made tax deductible donations last year:
Do a search for your desired donors. There are several things to consider when doing your search: do you want to send a tax receipt to everyone who donated, or just those who gave a total of $250 or more (the requirement of the IRS)? Do you want to send to both organizational and individual donors or just individuals? You'll want to pull in only those donors who gave tax deductible gifts from the prior year.
After you consider all the factors, run your search and put the resulting list of contacts into a group.
Select ALL contacts in the search results > from the ACTIONS dropdown menu, select GROUP - Create GROUP and name it something like "RECEIPTS_EOY Tax Receipts for X year donors. (We recommend creating this group as a regular/static group rather than a smart group. If you make it a smart group, it will update the next year and it may cause confusion.)
Make sure to make the group a MAILING LIST in the settings.
Create a new email (MAILINGS > NEW MAILING) and choose your group of donors and your template. Make sure everything looks like you want it to in your email, make sure to test your email first and then send it!