As 2025 winds down, nonprofits are making their final push to encourage year-end giving. Meanwhile, donors are reviewing their tax strategies to maximize deductions before filing season. This overlap makes it especially important for charitable organizations to revisit the IRS substantiation requirements for charitable contributions. 

Why does this matter? Because no nonprofit wants to jeopardize a donor’s deduction due to incomplete or delayed acknowledgments. As we head into 2026, here’s what organizations need to know to keep their acknowledgments accurate and compliant.

Substantiation Basics 

Under Internal Revenue Code Section 170(a) and related regulations, taxpayers must have proper documentation to deduct charitable contributions. 

• For contributions of $250 or more: Donors must receive a contemporaneous written acknowledgment from the charity. 
• “Contemporaneous” means the acknowledgment must be obtained by the earlier of: 
  • The date the donor files their return for that year, OR the return’s due date (including extensions). 

It is considered best practice to send acknowledgments promptly after receiving a gift, and no later than January 31st of the following year. Many nonprofits send acknowledgments right after receiving a gift to thank donors quickly and prevent a year-end rush. 

What should an acknowledgment include?  

To meet IRS requirements, each acknowledgment should contain: 

• The amount of cash contributed and a description (but not the value) of any non-cash property. 
• A statement of whether goods or services were provided in exchange for the contribution. 
• If goods or services were provided, a description and good-faith estimate of their value, or a statement that the only benefits were intangible religious benefits.

Quid Pro Quo Contributions 

When donors receive something of value in return, such as event tickets or a gala dinner, nonprofits must disclose the fair market value of those benefits. Donors can deduct only the portion of the gift that exceeds the value received. 

Special Considerations for Non-Cash Contributions 

When donors contribute property instead of cash, additional rules apply: 

• Fair Market Value (FMV): Determining FMV is the donor’s responsibility, not the nonprofits. Nonprofits should avoid providing estimated values in acknowledgments. 
• Appraisals: Non-cash gifts exceeding $5,000 generally require a qualified appraisal for the donor’s deduction to hold. 
• Vehicles: Contributions of cars, boats, or airplanes may require the nonprofit to file Form 1098-C with the IRS and provide a copy to the donor. 

Updates and Trends Heading into 2026 

• Electronic Acknowledgments: The IRS allows acknowledgments to be sent electronically (via email or donor portal) as long as all required elements are included. Many nonprofits now prefer this method for efficiency and donor convenience. 
• Audit Focus: IRS examinations continue to emphasize proper documentation of non-cash gifts and quid pro quo contributions. Consistent, accurate reporting is key. 
• Donor-Advised Funds (DAFs): As DAF giving grows, nonprofits should confirm acknowledgments clearly note when gifts are received through these vehicles, since deductibility rules differ for donors. 

Protect Donors and Your Organization 

Accurate and timely acknowledgments protect your donors’ tax benefits and strengthen trust in your organization. As year-end approaches, now is the time to review your acknowledgment practices and ensure your nonprofit is ready for 2026. Our nonprofit specialists can help you stay compliant while keeping your focus on your mission. Contact us to learn more.