More than ever before, we gather for this season of giving to express our gratitude. The eternal pause felt through this year has given us unseen clarity and community.
As the year closes, especially in the nonprofit world, we reflect on the hard, communal work that helps all of us grow. This work is a core part of your mission as church leadership. As much as those reminders serve you well, it doesn’t make navigating end of year documentation any easier.
Your church year-end contribution letter is a complex document that requires legal parameters to be satisfied. Mix that with expressing your gratitude to your donors and the whole experience can feel a bit confusing.
There's a middle ground that can help you find balance in completing this molehill that's disguised as a mountain. We'll review what's legally required of your congregation and best practices to support your members. These best practices, tips and requirements include...
- A Church Year-End Contribution Statement Definition
- Example: Year-End Contribution Letter
- What Should Be In A Contribution Statement?
- How to Prepare
- How to Take Care of Your Donors
- Defining Your Key Role in the Creation of the Statement
What Is A Church Year-End Contribution Statement?
There is so much misinformation in every area of donors and end of year statements. Not uniquely, this occurrence can cause a trickle-down of disorganized thought and process. So, let's clear up anything that might be feeling a bit dusty.
In order to maintain non-profit status, your church does not need to fill out a contribution statement at the end of the year. It is not a legal requirement, and there are no penalties for skipping this process. However, in lieu of community and tax deductions, you would be ill-advised not to.
Your contribution statement is your church's opportunity to create dialogue. Legalities aside, this is one of the most important occasions to unite with your fellowship. Over 30% of giving occurs in December, so the language you choose can make or break the chance to hit your year-end financial goals.
Express the value of your donors in a tangible way, offering gratitude and acknowledgment of their hard work. We all know how good it feels to be honored for the way we've shown up. Not only does it make us feel good about the task at hand, but we might be more inclined to bring along friends and family to h.
Your contribution statement can be the beginning of a meaningful conversation about what's been accomplished this year with donor support. It is so easy to get caught up in the busy body mode, and so often we forget to extend our true gratitude beyond a simple "thank you" in the moment.
Statistics show us that folks who have been thanked for their hard work and dedication are more likely to show up for that same level of work again.
Let's explore some examples of what kind of non-legal content your contribution statement can express to your donors.
Thank You For Everything
It is as honorable as it is crucial to acknowledge the support and unconditional positive regard anyone has gifted us, let alone within a faith community. This practice puts the relationship before the task.
When we put the relationship before the task, we continue ebbing and flowing in the beautiful world of rapport building. The connection formed within faith communities is unparalleled. Your fellowship and congregation members begin to build trust and confidence in their church's ability to follow through on their mission.
When you sit down to write your thank you, consider personalizing it. A little gratitude can go a long way. When you express gratitude for your community members, your impact is clear.
Those folks who feel the love will return it 10 fold.
And feeling so bound to their practices will translate to their loved ones. Eventually, your community could grow beyond what you initially envisioned. And that's the entire purpose of spreading your mission and reaching your community.
A collaboration of doing more for one another, guided by faith, and bound by fellowship. Take advantage of this opportunity to connect, it's an important one.
The Past Years Accomplishments
Donors have shown up for their faith community in ways others can't or won't. Highlighting the difficult work that's been accomplished due to their hands reaffirms the need for their support and encourages future donation.
Let's say this past year was big on repairs. Listing the needs that were fulfilled by way of donor support can create tangibility. The gratitude expressed can bridge the gap between the use of those dollars and the incredible work it went to.
Support the hands that feed you. In this case, it's about coming together to accomplish a common goal.
Glancing back at these successes reminds us how it was possible to make them happen. All the while, your congregation is working in partnership to develop ideas for next year's projects.
Next Year's Hopes
After discussing all of the hard work that's been fulfilled through donor support, checking in about next year's wishes and wants could excite a new conversation.
Your contribution statement can be unique in its approach by identifying how integral your donor's gifts were this year. It can also express that your congregation is hopeful those donors will continue to support the needs of the church.
When you distinguish a figure that your congregation needs to be a force of love in your community, make sure it's listed on your website. This part may be tough to squeeze into your year-end letter, so make sure you let your members know when they can begin planning for next year's offerings.
Allow space for feedback regarding what community members would like to see in the church and their neighborhood.
Encouraging this type of feedback gives donors an opportunity to express their thoughts. It highlights that you are doing your part to nurture their willingness to contribute financially and spiritually.
In the grand scheme of things, that's what all of us are looking for, validation of our appreciation.
The purpose of a mission in any organization is to define what you can be accountable for and how you plan to honor that mission. We do this through the coordination of extra hands, hearts, and faith.
Identifying your mission in a simple sentence can wrap up your contribution statement with an all-encompassing reminder of why you serve. And, it can be a great reminder for you, too.
If the collective mission and vision can be expressed through your work, find a way to sum that up into words. Show your donors that their time, money and efforts are helping the progression of their village.
Make apparent in your letter the significance of the giving season and giving throughout the year. Be direct in your ask, your members are ready to show up for their community again, so skip the fluff.
While these are a lot of points to consider, make sure your letter is concise but thorough. Use your voice to connect the puzzle pieces of your year.
Somewhere around 400 to 500 words is a great way to get your message across and include the important parts. It should look and sound something like the example below.
Example: Year-End Contribution Letter
Dear Jane Smith,
We are humbled by your financial and intangible contributions to our community this year. Our mission continues to impact our neighbors through our low barrier practices and willingness to put our hands together to provide. This work would not be possible without every single member of our congregation.
Because of your compassion and understanding, we’ve been able to accomplish some vital work:
- Remodel the front and back entrances to be accessible for all abilities.
- Began a community garden.
- Connected with homeless services to provide intermittent shelter during code purple (below 32 degrees).
- Provided child care for low-income families in transition.
On the back page, you will find donation data for tax purposes. We are very fortunate to have your support this year, and we look forward to serving our community together next year.
Our year-end campaign information will be available on our website and via newsletter. We are aiming to finish the month of December with a goal of $10,000. With your continued support, we can keep integrating our community so that no one goes without.
What Should Be In A Contribution Statement?
The federal government has set parameters regarding what should be in your contribution statement.
In order for everything to be processed accurately, it is imperative you follow the IRS guidelines.
Make sure your church's name is listed, as well as the donation amount for cash donators. You'll need to have a description of non-cash donations, and a statement that no goods or services were received by the donors to verify the tax-deductible status.
Legalities aside, the body of your contribution statement is going to highlight your end of year giving campaign and any related events worth notating.
An end of year campaign can be simple. Donors should have the option to give in person or remotely. There are a few loose ends you can make sure are tied prior to the end of the year.
Check your website and make sure all donation options are accessible and fully functional.
Get you and your team ready for success by having systems in place that provide consistent documentation. Have a master template you can rely on that is easily adjustable should a special circumstance arise.
Starting a spreadsheet with the donor information can be a huge help at the end of the year. It is required to have explicit data recorded for your submission. Using a spreadsheet to log donations through the year can also help you save an enormous amount of time at the end of the year.
Picture five minutes per day of logging information instead of 15 hours of deciphering chicken scratch during the last week of the month.
Spend the end of December with your friends and family, celebrating the awesome work you’ve managed to accomplish instead of being stuck at the office under a mountain of paperwork.
Take Care of Your Donors
The IRS has adjusted its tax penalty and could reject charitable donations if the donation receipts (year-end) are missing key information. There are new requirements to ensure your donor's compliance gives them and you the benefits all parties deserve. Being aware of these requirements can help support your donors in an actionable way.
A simple way that you can support them is by thoroughly combing through your letter before issuing it. Not only will incorrect information hold you back from congregation needs, but a donor may also receive a tax penalty for submitting the wrong information.
Have a method of direct communication for donor receipt and charity questions. If you're choosing to engage with a year-end contribution letter, make sure you follow through on all of its requirements. It can be helpful to have a checklist handy with expectations you can cross off as you complete them.
Having a staff and volunteer meeting to let them know how donors may reach out can cover miscommunication before it happens. That awareness makes one less exhausting trip through the grapevine to find out how donors can access their charity receipts.
Make an email or question box available on your website for donors to send questions or requests for receipts from your congregation. Having open accessibility will make the entire process run smoother for all parties, which is ideal for this time of year.
To characterize the big picture of this act of giving, it is important to acknowledge how important you and your church's role is in the community.
Folks rely on the community and understanding they can find at their local congregation. In the best and worst of times, it is a consistent source of unwavering, unconditional positive regard.
It is a place to sit without judgment of oneself or of others, and its reputation precedes itself through acts of kindness and consideration. When your community is looking for a way to make a difference, they may lean on you for guidance.
Year-end contribution statements are a way to wrap up the entire year's events, good and bad and show your community through something tangible that their value and worth is felt.
The presence of your donors is crucial to the vitality of your congregation. They rely on you to guide, show up and offer the support needed to be well. Likewise, you rely on them to provide nourishment for the congregation through ideas, financial resources and togetherness.
The all-hands in approach to your role inspires people to lead by example. Before you know it, you're walking around with folks asking how they can support you left and right.
This exact exchange is what makes community and fellowship so special. One hand washes the other and never runs out of material to dry them with. A cyclical distribution of love, support, and identity. Likeness and warmth throughout the year, but especially during the season of giving.
if you emulate the value and mission of your congregation, it will become contagious. Your donors will see you walking the walk and join you on the path toward serving the entire world.
Make It Count
Your church year-end contribution letter can be a powerful resource for your congregation.
When utilized to its full potential, it will provide the relationship and unity needed to serve in the way that your congregation intended to.
Use best practices like logging information through the year, checking off your IRS requirements and most importantly- acknowledging your community for the incredible job they've done.
Looking for Letter Templates to Get Started?
Without a framework, or an example, crafting an appeal or a thank-you message can be cumbersome. That's why we built a complete guide that not only offers 105 letter samples and templates for nearly any situation, but also offers specific guidelines to help.