Is It Tax Time Yet?

By Erica Waasdorp

If you’ve been following this blog for a while, you know that I don’t typically recommend sending monthly thank-you letters to monthly donors. Instead, I suggest you send one thank-you letter when they join, and in that, you explain that from now on, they’ll start receiving updates on how their gifts are making a difference. Also mention that they’ll receive a tax letter in January with an overview of all their gifts.

I know many of you are feverishly working to enter all gifts with a postmark or check date of December 31, 2020, especially with some areas of the country heavily inundated with mail and subsequently mail delays.

I am so grateful that the postal workers worked hard to process as much mail as they possibly could, but the package and mail volume was unprecedented. I’m still receiving mail from December now.

Of course, you have donors who have started to call now for tax receipts, especially because more donors are able to deduct their gifts. I think it’s fine to say that you’re still entering gifts and that you should be able to send something out by the end of January.

When you have entered all gifts through the end of December 2020, run a report that shows your monthly donors and their gift totals for the calendar year.

Then create a warm and fuzzy thank-you letter with a little update on how their gifts have made a difference. There is no need to break out gifts by month, but please make sure to include all gifts — not just their monthly gifts.

You can download this template right and customize it for your purposes.

Then, depending on the number of monthly donors you have, send it out with a little handwritten note.

Don’t worry about doing an extensive impact report at this stage; just save that for when you’re ready or when it fits your schedule. It’s another great opportunity to provide your monthly donors with updates. But do try to send the tax letter out no later than January 31 or as close to it as possible. Donors will understand that things are different these days, so feel free to work that into the letter.

And if you have a legacy brochure or legacy buck slip, now’s the time to plant the next seed.

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Tax, Legal & Compliance

Erica Waasdorp Author's page

Erica Waasdorp is one of the leading experts on monthly giving. She is the president of A Direct Solution, a company serving nonprofit organizations with fundraising and direct marketing needs, with a focus on monthly giving and appeals. She authored "Monthly Giving: The Sleeping Giant" and "Monthly Giving Made Easy." She regularly blogs and presents on fundraising, appeals and monthly giving — in person and through webinars. She is happy to answer any questions you may have about this great way of improving retention rates for your donors.

Erica has over 30 years of experience in nonprofits and direct response. She helped the nonprofits she works with raise millions of dollars through monthly giving programs. She is also very actively supports organizations with annual fund planning and execution, ranging from copywriting, creative, lists, print and mail execution.

When she’s not working or writing, Erica can be found on the golf course (she’s a straight shooter) or quietly reading a book. And if there’s an event with a live band, she and her husband, Patrick, can be found on the dance floor. She also loves watching British drama on PBS. Erica and Patrick have two step sons and a cat, Mientje.