Producing Tax Summary Letters
by Gene Weinbeck
It's time to produce Tax Summary letters (also called End of Year letters) again. They are usually sent in January after the last donation for 2009 is in. To help you breeze through this process, here's a coherent plan of attack for FundRaiser users.
In FundRaiser Select and Professional, you can choose which columns will be displayed, like Mode (check, charge) or Benefit (if the donor received any goods or services from you in return for their donation). With Benefit, you can display the amount and description of the benefit, and GiftList will subtract the benefit total from the total given and show the actual tax deductible amount.
Gift Totals Function
Other Merge Functions You Might Use in your Letter
Another merge function in Select and Professional is GiftCount, which allows you to say how many donations the donor gave. You could say, for example, "Thank you for your 7 gifts totaling a generous $500, of which $375 is tax deductible."
First, start by deciding how you want to list the donations in your letter. Two merge functions found in the FundRaiser word processor are used specifically for this type of letter.
- GiftList function
- GiftTotal function
You may decide to use either or both of these merge fields in your letter.
The difference between these two functions is the level of detail they give. GiftList provides a list of donations. GiftTotal provides a single total amount.
After you've decided how to list donations, get your letter template ready. There is a sample letter called EndOfYear that comes with FundRaiser. Click on the WP (Word Processor) button in FundRaiser to open up the built-in word processor. Edit the message to suit your organization's mission and change the year for the GiftList merge function by deleting the function, then re-inserting it. If you've decide to use the GiftTotal function in addition to (or instead of) GiftList, then make that change to the template also.
If you already have a letter that you used successfully last year, then all you need to do is reset the GiftList and/or GiftTotal functions in your letter template, so that you can change the date range from to the correct year. To reset these functions, just double-click on them to bring up the criteria window.
Before you print your letters, and now that you've gotten all the details of the letter done, double-check that you have all of your gifts from the year entered into the system. It sounds like an obvious matter, but it will be much easier to print letters for all donors, rather than having to go back and print letters one-at-a-time for those that were somehow overlooked. Maybe while you've been getting the letter details ready one last check has surfaced.
Now, run a Query of everyone who donated last year. First click on the Query button, then on the Gift Fields tab.
While you can save a little money by selecting only those who gave more than $20 or so during last year, we recommend that you send a letter to everyone who gave, regardless of amount. Why? Because this is the perfect time to re-establish your relationship with all your donors. Even if someone gave only $5, you may be able to convince them to give more or to give more often. You can be pretty certain that they will not give even the $5 if you do not maintain your relationship with them.
To print letters, click on the Print menu, then on Letters. Choose "All Donors In Query". Then click on the folder button for "Choose Letter to Print". Find your End Of Year letter and click Open. Click on the Print button, then preview your letters to make sure they look okay, and then click on the printer button to print.
To print labels or envelopes, click on the Print menu, then on Labels or Envelopes. Again, choose "All Donors In Query" and follow the same basic printing steps as above. The labels or envelopes will be printed in the same order as the letters.
About End of Year Letters by Sasha Daucus
IRS Publication 1771 explains the federal tax law for organizations such as charities and churches that receive tax-deductible charitable contributions and for taxpayers who make contributions.
IRS Exempt Organization customer service–Telephone assistance specific to exempt organizations is available by calling IRS Exempt Organizations Customer Account Services toll-free at (877) 829-5500.
FundRaiser Software offers non-profit organizations intuitive donor management software that is easy to learn and easy to use. Three programs, ranging from simple to sophisticated, let you choose the features you need now, while guaranteeing a built-in growth path for the future. Software flexibility, budget options, and superb technical support make FundRaiser Software uniquely adaptable to the needs of non-profit organizations - whatever their mission.