Table of contents
Table of contents
Share this article
150K+ changemakers already subscribed
While seemingly simple, donor acknowledgment letters can conjure up plenty of confusion in the nonprofit world. From understanding their exact purpose to figuring out when to send them, this kind of gratitude can be a bit tricky to nail. But if you do it right, they can be oh-so-powerful.
In this article, we’ll cover everything there is to know about this form of stewardship, including a free donor acknowledgment letter example template, so you can hit the ground running.
What is a donor acknowledgment letter?
A donor acknowledgment letter (DAL for short) is a formal message a nonprofit organization sends to supporters who have made a financial contribution to the organization. Usually, DALs include personalized acknowledgment of a specific gift amount and its impact.
Sending a DAL is an opportunity for organizations to connect with their supporters and express gratitude for their support, whether it’s given online, in person, or in response to direct mail fundraising.
It’s important to note that an acknowledgment letter is not always the same as a donation receipt, which is an IRS requirement for every charitable contribution of $250 or more. A DAL, on the other hand, is more of a donor thank you letter sent to anyone who gives in order to build a relationship, (although many will also include tax information to cover both bases).
What kind of contributions is a DAL appropriate for? 💰
Short answer: All of them! No matter how much your supporters contribute, everyone who gives should receive a donor acknowledgment letter. This includes:
- Online donations
- Checks and other recorded offline contributions
- In-kind donations
- Matching gifts
- Memorial gifts
- Donor-advised funds
- Legacy gifts
⭐ Pro tip: With Givebutter, you can add or import offline donations made by cash or check to keep all of your donor data—and acknowledgments—in one place.
Why should your nonprofit send donor acknowledgment letters?
Whether by email or snail mail, donor acknowledgment letters are critical for donor retention. Here are five reasons why you should acknowledge all of your donors in this way.
1. Relationship building 💛
A recent donor loyalty study showed that 71% of donors feel more connected to an organization when they receive personalized materials. You can personalize a donation receipt email or text message (and you should!), but a thank you letter shows a level of care that can’t be beaten—especially when you acknowledge the recipient’s donation amount, what campaign or initiative they contributed to, and how they made an impact creates a lasting impression on supporters.
2. Legal compliance ⚖️
For organizations that would like to incorporate donation receipt information into their DALs—especially for those $250+ donors that may seek a tax deduction for their charitable contribution—your letter should include the following information:
- The legal name of the organization
- Exact donation amount and date
- Description for non-cash contribution (if applicable)
- Good faith estimate of the value of goods or services (if applicable)
- A statement confirming no exchange of goods/services exchanged for tax-exempt donation (if applicable)
While there is no specific deadline required of a DAL, it’s always wise to thank donors soon after they’ve made a gift. When it comes to donation receipts for tax purposes, be sure to send a receipt the same year as the donation was made.
3. Sustainability 💸
Great DALs can also encourage repeated giving. We know that donors who get a thank you message within two days after they make their contribution are four times more likely to donate to the organization again.
A more personalized letter—especially if it comes in the mail—complements any digital acknowledgments you’ve already made, furthering those connections and bringing in more support in the long term.
4. Competitive edge 🏆
Many nonprofits are often competing for the attention of the same supporters. An easy, evergreen way to stand out from other nonprofits is to consistently send DALs.
About 91% of organizations stop acknowledging recurring gifts by the third month. While you don’t have to mail a separate letter for each monthly contribution, an acknowledgment email sent every month thanking them and continuing to show the impact of their ongoing gift will make supporters feel far more connected to your organization.
5. A friendly reminder 🚨
Remember: Out of sight; out of mind. Consistent donor acknowledgment letters are a great way to stay in touch with supporters and update them on your programs and the change your organization is making in the world.
Your donors are more than an ATM—treat them like the critical part of your organization that they are!
How to write a donor acknowledgment letter in 6 steps
Ready to get started on your DAL? Follow these steps and download the template donor acknowledgment letter sample to knock yours out of the park!
Step 1: Get organized 🤓
Donor acknowledgment letters can often get lost in the shuffle—busy nonprofit workers can forget who to send letters to, where to send them, and even what gift to acknowledge.
In order to avoid forgetting to thank donors or forgetting to send the IRS's required donation receipts, it’s important for nonprofits to use a robust software solution in order to streamline all of their mailings and e-mailings.
⚒️ Tools needed: Save time (and stress less!) by keeping all of your donor acknowledgments organized in Givebutter’s free nonprofit CRM. You can enable automatic donation receipts for all gifts and ticket purchases, track which donations have been acknowledged, and even send targeted messaging to any donor segment you want.
Step 2: Make it personal 🫂
According to a marketing report from McKinsey, 78% of respondents said that personalized content made them more likely to become repeat customers. While nonprofits are in the business of charitable giving and not selling products, this kind of insight is just as valuable.
When nonprofits personalize their donor acknowledgment letters with specific details (rather than only sending mass messages), recipients are more likely to respond in kind.
⚒️ Tools needed: With Givebutter’s marketing and engagement tools, nonprofits can use dynamic merge fields to input specific donation amounts, supporter names, and more. Recipients will feel like they’re getting a handwritten note—even if it’s an email.
Step 3: Showcase impact ❤️🩹
Donors want to know exactly how their contributions made a difference. Similar to crafting an annual appeal letter or a year-end giving letter, your DAL should include specific programs or initiatives that were advanced by a donor’s gift.
To jumpstart your writing, consider how your letter might answer questions like:
- Who specifically did this gift help?
- Why does their gift matter right now?
- What were both the short-term and long-term impacts of their gift?
- What do their gifts mean to your organization?
⚒️ Tools needed: A robust nonprofit CRM with detailed contact profiles is a great way to review and analyze the impact of your donors’ gifts. Sort your donor segments by campaign type, gift amount, or your own custom filter, and find out exactly how your supporters helped progress your goals.
Step 4: Customize 🎨
Nonprofit donor acknowledgment letters that lack custom design often end up in a stack of throw-away mail or in the “junk mail” folder. Include brand logos, colors, photos, videos, and more in order to stand out from the spam and reinforce your brand identity.
⚒️ Tools needed: Use Givebutter’s Canva integration to create engaging fundraising campaigns and eye-catching donor messages that are as unique as your mission—all without leaving Givebutter.
Step 5: Set yourself up for success 🚀
Donor acknowledgment letters are an ongoing donor stewardship practice. In order to save both time and energy—and a whole lot of headache—be sure to set notifications for new donations and create automatic donation receipts so supporters get an immediate “thank you” right away, which you can follow up with your DAL.
You should also make sure to use clear and concise language. DALs should be short and to the point without any industry jargon or long-winded sentences.
⚒️ Tools needed: With marketing automation tools, Givebutter enables nonprofits to fully customize donation receipts, nonprofit emails, and more.
Step 6: Inspire action 💪
In your DAL, reiterate your organization’s mission and impact so donors are reminded of why they gave to your nonprofit in the first place. Include information about how readers can get in touch with you, as well as other channels where they might connect more informally (Instagram, Facebook, etc.).
And while a DAL is not a donation request letter, it never hurts to include information for donors that want to give again or get involved in your work in another way. Whether your donor acknowledgment letter is in print or digital, include a clear way for readers to continue their contributions, volunteer, or participate in another activity related to your mission.
⚒️ Tools needed: Make it as seamless as possible for donors to take next steps. Share a link or an easy-to-scan QR code that takes supporters to your Givebutter donation page or an upcoming event in seconds.
Donor acknowledgment letter template
Hit the ground running with this customizable donor acknowledgment letter sample.
Let Givebutter do the heavy lifting
A great donor acknowledgment letter can be a powerful tool for creating connections and inspiring future giving and engagement.
To make the most of your DALs, you need the right tools for easy automation, custom branding, and personalization. With Givebutter’s donation forms, fundraising pages, CRM, and marketing tools, nonprofits can accept donations, send automated donation receipts, and—coming in 2023—create and export fundraising letters, all in one convenient place.
Sign up for free to start sending automatic donation receipts, and be on the lookout for the launch of fundraising letters in 2023!
Share this article
150K+ changemakers already subscribed