Learn how to write impactful, IRS-compliant thank-you letters that boost donor retention and show genuine appreciation. Perfect for nonprofits looking to deepen donor relationships and inspire continued support.
As a nonprofit, the generosity of your supporters is critical to the success of your mission. Whether it's a straightforward donation or a sponsorship or ticket purchase for an event, donors are at the heart of some much of what you do. And the fact is: Getting someone to donate or attend your event is one thing but keeping them engaged and showing them that their support truly matters is another.
One of the simplest and most impactful ways to do this is through a meaningful thank-you letter. In this blog, we’ll break down how to craft thank-you letters that go beyond the generic "Thanks for your donation!" and turn a simple acknowledgment into the heartfelt connection that it should be. Plus, we’ll provide clarity into what’s required by the IRS when thanking donors and the necessary elements that should be included in your acknowledgment.
Perhaps you’re thinking, “Why does a thank-you letter really matter?” Especially when most thank you letters are post-donation and automated emails sent through your software. Yet the truth is, a well-composed and thoughtful thank-you letter (or email) isn’t just a nice gesture - it's a powerful tool to deepen your relationship with supporters. Whether your donors have contributed $5 or $5,000, a well-written letter can turn a one-time donor into a lifelong advocate. Here’s why:
They Show You Care (Like, Really Care)
Donors give because they believe in your cause. But they also want to feel seen and appreciated. A thank-you letter is your chance to tell them, "You matter to us." It makes them feel valued, and that can go a long way in building lasting relationships. Think of donors like this: The donor is the Hero of their story. Your nonprofit is the Hero’s weapon. So, center your thank-you notes on the Hero and how they’ve used the weapon for doing good!
They Build Trust
When you take the time to personally thank someone, you’re showing them that their donation or ticket purchase isn’t just a transaction - it’s a part of a bigger mission and the better world that you’re working to create. It’s a simple but crucial way to build trust and transparency.
They Increase the Likelihood of Future Donations
Research shows that well-crafted thank-you letters are directly tied to donor retention. When you show gratitude and demonstrate the impact of their gift, donors are more likely to donate to your organization again. With most donor thank-you letters automated through software, there’s no easier way to cultivate donor loyalty.
Now that we know why these letters are important, let’s talk about how to write them.
1. Personalization, Personalization, Personalization
A generic "Dear Valued Donor" will not work. Personalize each letter with the donor’s name and reference the specific donation or ticket purchase. You can also add in the date of the donation as well as the name of the campaign or the event. These touches will make the letter feel much more genuine. If you’re automating the thank-you letter, merge text fields within your software should provide this functionality.
Example:
"Dear Sarah,
Thank you so much for your donation of $100 to support our community clean-up project. Your contribution is already making a difference!"
2. Express Heartfelt Gratitude
It is important to make the donor feel appreciated and special. This is their moment (remember: they’re the Hero!), so don’t skimp on the "thank you." Go beyond the basics and show them that their generosity is making a tangible impact.
Example:
"Your generosity is helping us provide essential supplies to families in need, and we're incredibly grateful for your support. We couldn’t do this without you!"
3. Show the Impact of Their Support
Donors want to know that their money is important to you and being used wisely. Don’t just say thank you - tell them a few specifics about how their donation is making a real impact. Whether it’s helping to fund a specific project or providing resources to a community, be clear about where their money is going. This is a great opportunity for well-worded and concise storytelling or providing short examples of significance.
Example:
"Because of your donation, we've been able to purchase 500 meals for local families this week. It’s a small act with a big impact, and you’re at the center of it."
4. Keep it Warm and Conversational
You don’t need to write like a robot. In fact, a conversational tone will make the letter feel more genuine and relatable. Your donor is not just a "financial contributor," they’re a partner in your mission. Speak to them like you would a friend or valued collaborator.
Example:
"We’re so excited to have you as part of our community. Your generosity inspires us to keep pushing forward, and we’re thrilled to have you along for the ride."
5. Add a Personal Touch
If possible, consider adding a handwritten note to the letter. It could be a simple “Thank you so much for your continued support” or “You’re helping make a real difference.” Small gestures like this can go a long way in making a donor feel valued.
If the thank-you is a post-donation automated email, this is a secondary step that can be done by staff, volunteers and board members. Creating a task flow for donations above $500 or $1,000 that assigns different members of your organization the job of writing and mailing a quick handwritten note can an incredibly impactful (and fulfilling) gesture.
Example:
Handwritten note: "Sarah, you’re truly amazing! Thank you for being part of this cause."
6. Provide Opportunities for Further Engagement with a Clear Call To Action
Your thank-you letter shouldn’t be a one-way street. Give your donors ways to stay involved with your mission – something unrelated to a financial ask. Joining a volunteer opportunity, following you on social media, or signing up for future campaigns are all great suggestions that keep the door open for continued engagement.
Example:
"Would you like to stay involved with our community clean-up efforts? Feel free to reach out to our volunteer coordinator at [email] or visit our website for upcoming opportunities."
When crafting thank-you letters, it’s also important to consider the IRS regulations that govern how nonprofits must handle gift acknowledgment. This ensures your donors can claim their tax deductions and your organization stays compliant.
To be IRS-compliant, a thank-you letter must include specific details for donations, particularly for those of $250 or more. These include:
For donations of $75 or more, the letter must include a good faith estimate of the value of the goods or services the donor received.
A "quid pro quo" gift occurs when a donor makes a payment partly as a contribution and partly for goods or services. For example, if a donor gives $100 and receives a dinner worth $40 (the Fair Market Value or FMV), the donor has made a "quid pro quo" contribution. In these cases, the nonprofit must inform the donor of the value of the goods or services they received in exchange for their donation.
The IRS requires that nonprofits provide a written acknowledgment for these types of gifts, and it must include the fair market value of the goods/services provided. This ensures the donor can claim only the portion of the gift that is a true charitable donation.
Your software solution should allow this to be automatically assigned to tickets, sponsorships and items for sale. (Take a look at the BetterUnite solution if yours does not!).
Example:
"Thank you for your generous $100 donation. In exchange for your donation, you received tickets valued at $40 to our fundraising gala. Your tax-deductible contribution is $60."
Donors expect to receive a thank-you letter promptly after their donation. An automated email thank-you letter is best in our digital age and most donors find it easiest to save the digital acknowledgement for their tax returns. The IRS doesn’t require gift acknowledgment to be sent immediately, but it should be done within a reasonable time frame - ideally within a few days of receiving the gift, if you are sending snail mail letters. A timely thank-you letter reassures the donor that their gift has been received and strengthens the relationship.
If the gift is made through a donor-advised fund (DAF), the nonprofit should send an acknowledgment to the donor, but it does not need to include information on the tax-deductibility of the gift. The DAF provider will have already issued a tax receipt to the donor. If the donor chose to remain anonymous, the nonprofit will not have donor contact details and cannot send a personalized thank-you letter.
*Disclaimer: The content of this blog and on this website is for general informational purposes only and should not be interpreted as legal, accounting, tax, investment, or financial advice. For the most current and accurate information, please consult with a qualified professional (such as an attorney, accountant, or tax advisor). BetterUnite makes no guarantees regarding the accuracy or timeliness of the information provided here.
Now that we’ve covered the IRS requirements, let’s go over some best practices for crafting thank-you letters that not only meet legal standards but also leave a lasting emotional impact on your donors.
1. Make it Personal
As mentioned earlier, personalization is key. Use the donor's name, donation date and donation amount, and highlight how the contribution will be used. This creates a more intimate and sincere connection.
2. Create Emotional Connections
Donors give because they believe in your cause and they believe that with their help, you can do more. Tap into that emotion in your thank-you notes. Share stories of how their donation is making a real-world impact. Include personal stories or testimonials from the people whose lives have been affected by the donor’s contribution. In today’s very visual environment, photos, gifs and short videos are also great to include (keep reading for more tips on photos and videos!).
Example:
"Your donation of $250 helped provide winter coats for 50 homeless children in our community. Your gift has kept them warm through the harshest months, and for that, we can’t thank you enough."
3. Be Timely
All online donations or purchases should be followed with an immediate and automated thank-you email. If you are mailing a thank-you letter, doing so as soon as possible shows that you are on top of your operations and that the donor’s contribution truly matters to you. Prompt acknowledgment goes a long way in building trust and deepening the donor’s relationship with your nonprofit.
4. Offer Opportunities for Further Engagement
A thank-you letter shouldn’t be the last contact you have with a donor. Encourage ongoing engagement by offering ways for them to stay involved. This could include volunteering, attending future events, or following you on social media. Creating a post-donation or purchase email marketing flow (or drip campaign) that you can enroll donors in is a next-level effort that will pay off dividends.
Your writing is powerful, but adding a visual element can take your thank-you to the next level. Consider creating a short thank-you video featuring your team or the beneficiaries of your nonprofit. This personal touch will help your donors feel even more connected to the impact of their support.
BetterUnite makes it easy to create and send videos along with your thank-you letters, allowing you to integrate compelling visuals and make your donor outreach feel even more personal. Whether it’s a video from your executive director or a thank-you message from a person whose life has been directly impacted by your donor’s contribution, visuals make your appreciation even more heartfelt.
At BetterUnite, we understand how busy nonprofit staff and event managers can get. That’s why we’ve designed tools that help streamline and automate your donor communications while keeping them personal and meaningful.
With BetterUnite, you can:
Automate the Sending Process: Set up automatic thank-you emails or letters triggered by a donation or ticket purchase, so you never miss an opportunity to show gratitude.
Customize Content Easily: Personalize your thank-you messages with the donor’s name, donation amount, and specific event or cause they supported, all through simple templates. Also utilize conditional responses to acknowledge specific actions taken by donors. For example, if someone purchases a sponsorship, they can receive detailed language thanking them for that purchase in addition to the general thank you.
Track Engagement: See who opened your thank-you emails, which can help you tailor future communications to increase donor retention.
Offer Multiple Touch-points: Combine your thank-you letters with follow-up emails, surveys, text messages, or event invitations, all from a single platform, making it easier to maintain ongoing relationships with your supporters.
A meaningful thank-you letter is more than just a formality or an IRS obligation - it’s an opportunity to show donors that their contributions truly matter. By following the tips we’ve shared, you can create heartfelt, personalized letters that leave a lasting impression and foster strong connections with supporters.
And remember, BetterUnite is here to help you make the thank-you process easier and more impactful. With our powerful and integrated tools, you can focus on what really matters - building long-term relationships that fuel your nonprofit’s success.
*Additional reading: please refer to the National Council of Nonprofit guidance on tax acknowledgement requirements
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