When is a written acknowledgement required?

For donors claiming a federal income tax deduction of $250 or more, a contemporaneous written acknowledgement is required by IRS rules and should state the amount, description of noncash gifts, and whether goods or services were provided.

Can donors sign acknowledgments electronically?

Yes. Electronic signatures that demonstrate intent, consent, attribution, and retention meet ESIGN and UETA standards for most transactions; confirm platform audit trails and authentication strength for high-value gifts.

How should restricted gifts be managed?

Record restrictions clearly, route to finance for restricted fund accounting, notify program managers, and review any restriction for legality or feasibility before acceptance.

What records must we keep and for how long?

Maintain donation records to satisfy IRS substantiation and institutional audit needs; generally follow a minimum 3-year federal retention baseline and longer for sector-specific obligations.

Do we need a donor TIN or Form W-9?

Request a donor TIN or W-9 when required for reporting or when the donor requests certain acknowledgments; missing TINs can trigger backup withholding obligations.

How do we revoke or cancel a pledge?

Follow the policy's revocation procedure: document the donor's request in writing, confirm any contractual terms, and notify finance and development to stop processing.

Electronic Signature
Templates
Charity
Donation Policy and Procedures

Donation Policy and Procedures

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

What the Donation Policy and Procedures Cover

The Donation Policy and Procedures document defines how an organization accepts, records, acknowledges, restricts, and disposes of gifts and contributions. It establishes acceptance criteria for cash and noncash donations, roles and approvals, donor privacy and data handling, receipt and substantiation practices for tax purposes, and procedures for restricted or in-kind gifts to ensure consistent legal and financial treatment across programs, fundraisers, and third-party channels.

Why a Formal Donation Policy Matters

A written Donation Policy and Procedures creates consistent handling of gifts, protects donor intent, supports tax substantiation, and reduces operational and compliance risk by clarifying roles, review steps, and recordkeeping requirements under federal and state rules.

Who Typically Uses This Document

The policy also guides volunteers, third-party fundraisers, and service providers that handle donor information or process transactions.

Development and fundraising staff responsible for intake, acknowledgments, and donor communications.
Finance and accounting personnel managing receipts, deposits, and reporting.
Board members and executive leadership approving large or restricted gifts.

Core Elements to Include in the Policy

A professional Donation Policy and Procedures should be concise, actionable, and aligned with tax and privacy law. Include acceptance criteria, documentation requirements, valuation procedures, acknowledgment templates, stewardship rules, and escalation paths for unusual gifts.

Acceptance Criteria

Define acceptable donation types, minimum acceptance thresholds, prohibited items, and who may approve nonstandard gifts to minimize liability and reputational risk.

Gift Classification

Differentiate unrestricted, temporarily restricted, permanently restricted, designated, and in-kind gifts and specify program accounting treatment and reporting for each category.

Acknowledgment & Receipts

Provide templates for written acknowledgments, include required substantiation language for tax purposes, and outline timing and delivery methods for donor receipts.

Valuation Procedures

Set rules for valuing noncash gifts, requirement for appraisals or Form 8283 when applicable, and internal review for high-value contributions.

Privacy & Data Handling

Describe donor data collection, storage, permitted disclosures, and procedures to comply with HIPAA or other sector-specific privacy rules where donor health information is involved.

Conflict & Acceptance Review

Establish due diligence for potentially sensitive gifts, board notification thresholds, gift acceptance committee roles, and processes for refusing or returning gifts.

Step-by-Step: Creating or Using the Policy

Follow this sequence when adopting or applying the Donation Policy and Procedures to new gifts.

01

Draft or Review: Prepare policy draft and compare with IRS and state charity rules.
02

Approve Governance: Submit to executive leadership or board for formal approval.
03

Train Staff: Educate fundraising and finance teams on intake and recordkeeping steps.
04

Operationalize: Implement templates, workflows, and storage practices for daily use.

Updating or Amending the Policy — Process Grid

Use this grid to manage revisions, ensuring stakeholders, legal counsel, and auditors are engaged appropriately.

01

Initiate Change:

Identify the issue and propose draft language.

02

Legal Review:

Obtain counsel input for tax or regulatory impacts.

03

Board Review:

Present amendments to the board or designated committee.

04

Staff Notification:

Publish the updated policy and provide training.

05

Implementation:

Deploy updated templates, forms, and workflows.

06

Audit:

Schedule periodic compliance checks and document results.

Configuring an Online Donation Policy Workflow

Key settings to create a digital workflow for donation intake, approvals, and acknowledgments.

Field	Configuration
Template	Use a standard policy template with required fields locked.
Approval Flow	Route gifts above thresholds to finance then board.
Notifications	Email alerts to fundraising, finance, and compliance.
Storage Location	Secure cloud folder with restricted access controls.

Where Completed Policies and Donation Records Should Be Sent

Clear routing ensures legal compliance and timely acknowledgments for donors and oversight bodies.

Development Office: Primary recipient for intake records and donor communications.
Finance / Accounting: Receives deposit records, journal entries, and tax substantiation.
Legal / Compliance: Reviews high-value or restricted gifts for acceptability.
Donor Copy: Send the signed acknowledgment to the donor for their records.

Digital Delivery and eSignature Considerations

Ensure chosen platforms support audit trails, exportable records, and access controls to meet legal and audit requirements.

File Formats: PDF and DOCX are standard for retention and redaction.
Integrations: Connect CRM/finance systems for automated posting.
Authentication: Use email, SMS, or stronger verification for high-value gifts.

Essential Data Elements to Capture

Donor Name: Full legal name

Contact Details: Address and email

Donation Amount: Exact dollar value

Gift Date: MM/DD/YYYY

Designation: Restricted or unrestricted

Payment Method: Check, ACH, card, or in-kind

Key Timing and Delivery Expectations

Timely processing supports donor relations and meets substantiation expectations under tax rules; specific timing may vary by organization and donor type.

Acknowledgment Timing:

Provide contemporaneous written acknowledgement for gifts $250 or more per IRS substantiation rules.

Deposit Timing:

Deposit funds promptly according to finance schedule to reduce custody risk.

Annual Statements:

Issue donor statements annually or at year-end for donors' tax use.

Appraisal Deadlines:

Obtain required appraisals before filing when noncash gifts trigger Form 8283 requirements.

Retention Deadline:

Retain records per institutional schedule and applicable law.

Common Errors to Avoid

Failing to document donor restrictions clearly leads to misapplied funds and donor disputes.
Delaying acknowledgments can jeopardize donors' tax substantiation and reduce trust in stewardship.
Misvaluing in-kind gifts without proper appraisal can create IRS challenges and potential penalties.
Storing donor records insecurely or without access controls increases privacy and breach risk.

Consequences of Incorrect Handling

Tax Deduction Loss: Donor may lose deduction

Backup Withholding: 24% withholding for missing TIN

State Fines: Civil penalties for unregistered solicitation

Reputational Harm: Donor trust erosion

Audit Exposure: Increased IRS or state review

Contractual Breach: Violation of donor restrictions

eSignature Vendor Comparison for Donation Workflows

Common commercial eSignature options and core pricing/features to consider when digitizing acknowledgments and policy approvals. Pricing reflects typical per-user annual billing tiers.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Practical Examples of Policy Use

Realistic scenarios showing how the Donation Policy guides decisions and documentation.

Large Restricted Gift

A donor offers $250,000 for a new program

Finance requests appraisal and board approval
The policy required board review, a restricted fund account, and a signed gift agreement to preserve donor intent and reporting.

In-Kind Property Gift

A corporate donor offers surplus equipment

Development requests valuation and title review
Procedure required environmental check, internal valuation, and donor acknowledgment with conditions for acceptance or refusal.

Who Can Sign and Approve Donations

Executive Director

Typically authorized to accept unrestricted gifts and sign standard acknowledgment letters; board policy may reserve acceptance of large or restricted gifts to the board.

Chief Financial Officer

Responsible for financial acceptance, recording gifts, issuing receipted documentation, and ensuring tax substantiation is maintained for audit purposes.

Frequently Asked Questions and Practical Answers

Answers to common questions about donation handling, acknowledgments, and electronic signatures for policies and receipts.

Need help? Contact support

When is a written acknowledgement required?
For donors claiming a federal income tax deduction of $250 or more, a contemporaneous written acknowledgement is required by IRS rules and should state the amount, description of noncash gifts, and whether goods or services were provided.
Can donors sign acknowledgments electronically?
Yes. Electronic signatures that demonstrate intent, consent, attribution, and retention meet ESIGN and UETA standards for most transactions; confirm platform audit trails and authentication strength for high-value gifts.
How should restricted gifts be managed?
Record restrictions clearly, route to finance for restricted fund accounting, notify program managers, and review any restriction for legality or feasibility before acceptance.
What records must we keep and for how long?
Maintain donation records to satisfy IRS substantiation and institutional audit needs; generally follow a minimum 3-year federal retention baseline and longer for sector-specific obligations.
Do we need a donor TIN or Form W-9?
Request a donor TIN or W-9 when required for reporting or when the donor requests certain acknowledgments; missing TINs can trigger backup withholding obligations.
How do we revoke or cancel a pledge?
Follow the policy's revocation procedure: document the donor's request in writing, confirm any contractual terms, and notify finance and development to stop processing.

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