Year-End Donation Tracking

When donors make gifts near the end of the year, the question inevitably arises: “is the gift deductible this year?” Hopefully, this will help answer any questions you might have…

To qualify as a gift in a respected year, federal regulations require that checks must be dated on or before December 31 AND, the envelope accompanying the check must be postmarked by December 31 as well. The date the envelope is metered is NOT the same as the postmark date. For instance: if an envelope has a meter date of December 30, 2008 and a postmark date of January 2, 2009, then the transaction is recorded as a 2009 donation.

For hand delivered checks, the date the check is received determines which year to record the donation.

A postdated check is a check that is dated in the future. Postdated checks are not recognized as a donation until the day of the date of the check. For example, suppose the church receives a check on December 30, 2008 but the check is dated January 1, 2009. In this instance, the donation is classified in 2009.

All this being said, when receiving year end donations, please be sure to use the above explanations when classifying donations. If we maintain your donor database, please be sure to let your bookkeeper know what calendar year the donation should be recorded. Generally, if the check is dated on or before December 31, 2008, we will assume it is a 2008 donation. However, if the postmarked date is AFTER December 31, please be sure to specify that on the copies of the checks / deposits that you send us.

As always, don’t hesitate to contact us if you have any questions regarding this.

3 Comments

  1. W
    Posted January 15, 2009 at 11:55 am | Permalink

    What is the penalty for organizations that knowlingly break this rule (i.e. applying checks to the 2008 year which are clearly postmarked January 2009 (with a check date Dec. 31 2008)?

  2. Posted January 15, 2009 at 1:02 pm | Permalink

    The IRS may fine a charity, that deliberately issues a false acknowledgement to a contributor, up to $1,000 for an individual or up to $10,000 if the donor is a corporation.

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