Charitable contribution deductions in the United States are governed by strict substantiation rules issued by the Internal Revenue Service. Among these, the IRS $250 Donation Rule is one of the most critical—and most frequently misunderstood—requirements for U.S. charities.
This rule determines when a written donation acknowledgment is legally required, what information must be included, how it must be worded, and when it must be provided to the donor. Failure to comply does not just create administrative issues; it can result in donors losing their tax deductions during an IRS review.
This guide provides a complete explanation of the IRS $250 rule, including receipt requirements, timing rules, benefit disclosures, non-cash contributions, year-end statements, and common compliance mistakes—so charities understand exactly what is compulsory and what is not.
What Is the IRS $250 Donation Rule?
The IRS $250 Donation Rule requires that donors obtain a written acknowledgment from the charitable organization for any single contribution of $250 or more in order to claim a tax deduction.
This rule applies regardless of:
- Payment method (cash, check, credit card, ACH, online)
- Whether the donor is an individual or business
- Whether the organization is a nonprofit, church, or religious organization
The key concept is substantiation. The IRS requires independent confirmation from the charity that the donation was made and whether the donor received anything in return.
What the $250 Threshold Really Means
The $250 threshold is evaluated per contribution, not cumulatively.
Examples
- One donation of $300 → Written acknowledgment required
- Two separate donations of $150 each → Written acknowledgment not required
- Monthly donations of $100 → Each month evaluated separately
However, charities are still encouraged to issue receipts for all donations as a best practice.
IRS Receipt Requirement for Large Donations
For donations of $250 or more, a donor cannot rely on bank records alone. A written acknowledgment from the charity is mandatory.
Acceptable Forms of Written Acknowledgment
- Email
- PDF document
- Printed letter
The format does not matter. Content does.
Mandatory Information Required in a $250+ Donation Receipt
The IRS requires all of the following elements. Missing even one makes the receipt non-compliant.
Required Fields
- Legal name of the charitable organization
- Date of the contribution
- Amount of cash donated or description of non-cash property
- One of the following statements:
- “No goods or services were provided in exchange for this contribution.”
- OR a description and good-faith estimate of the value of goods or services provided
- “No goods or services were provided in exchange for this contribution.”
Example of Required Disclosure Language
No goods or services were provided in exchange for this contribution.
This sentence is not optional. It is a legal requirement.
Understanding “Goods or Services” (Quid Pro Quo Contributions)
If a donor receives anything of value in return for their donation, the charity must disclose it.
Common Examples of Goods or Services
- Event tickets
- Meals at fundraising dinners
- Merchandise
- Membership benefits with monetary value
Example: Fundraising Dinner
- Donation paid: $500
- Fair market value of dinner: $75
The receipt must state that $75 in goods or services were provided and only $425 is tax-deductible.
Exceptions: What Does NOT Count as Goods or Services
Certain benefits are considered intangible religious or token benefits and do not require valuation.
Examples:
- Religious services
- De minimis items (stickers, bookmarks)
- Low-value items with the charity’s logo
In these cases, the receipt should still include the “no goods or services” statement.
Special Rules for Churches and Religious Organizations
Churches are not exempt from the IRS $250 Donation Rule.
- Written acknowledgments are still mandatory
- Religious benefits do not eliminate receipt requirements
- Year-end statements are commonly used but must still be compliant
Non-Cash Donations and the $250 Rule
For non-cash donations of $250 or more:
- The charity must describe the item
- The charity must not assign a value
- Appraisals are the donor’s responsibility
Example of Proper Description
One used office desk in fair condition.
Timing Rules: When Must the Receipt Be Provided?
The donor must receive the acknowledgment before:
- Filing their tax return
OR - The tax return due date (including extensions)
Issuing receipts after this point does not satisfy IRS requirements.
Year-End Giving Statements and the $250 Rule
Year-end statements can satisfy the $250 rule if they include:
- All required receipt elements
- Individual donation dates and amounts
- Goods/services disclosures for each qualifying contribution
A generic summary without disclosures is not sufficient.
Common IRS Compliance Mistakes
Many charities unknowingly violate IRS rules due to manual processes.
Common issues include:
- Missing disclosure statements
- Incorrect donation dates
- Editable receipts without control
- Receipts issued too late
- Mixing acknowledgments with marketing language
These mistakes often surface during audits or donor tax disputes.
Why Controlled Receipt Generation Matters
Because IRS compliance depends on accuracy, consistency, and record integrity, charities benefit from standardized receipt processes that limit errors and maintain documentation history.
For U.S. charities seeking a structured and compliance-focused approach, DonorKite supports the generation and delivery of IRS-compliant donation receipts and year-end giving statements through controlled workflows. This helps organizations apply consistent acknowledgment language, maintain accurate records, and support IRS substantiation requirements without relying on manual templates or spreadsheets.
How DonorKite Supports Compliance With the IRS $250 Donation Rule
The IRS $250 Donation Rule requires charities to issue written acknowledgments with specific mandatory disclosures for qualifying contributions. DonorKite helps U.S. charities apply this rule consistently by standardizing donation receipt content and formatting in line with IRS substantiation requirements.
DonorKite supports IRS-compliant receipts for cash donations, benefit (quid pro quo) donations, in-kind (non-cash) contributions, and pledge payments, ensuring the correct acknowledgment language and disclosures are applied based on the donation type. Receipts can be generated and delivered through email, SMS, or WhatsApp using controlled workflows that help reduce compliance errors for donations of $250 or more.
Final Takeaway
The IRS $250 Donation Rule is not complex, but it is strict. Written acknowledgments are legally required, specific language is compulsory, and timing matters. Charities that understand and consistently apply these rules protect both their donors and their organization from compliance risk.
Treat donation receipts as compliance documents—not courtesy messages—and ensure every qualifying contribution meets IRS standards.
Frequently Asked Questions (FAQs)
Do I need a receipt for donations under $250?
For donations under $250, the IRS does not require a written acknowledgment from the charity if the donor has a bank record or similar proof of payment. However, issuing receipts for smaller donations is considered a best practice and helps maintain clear records for both the donor and the organization.
The mandatory written acknowledgment rule applies only when a single contribution is $250 or more.
How should “No goods or services were provided” be included on donation receipts?
When no goods or services are provided in exchange for a donation of $250 or more, the receipt must include a clear and explicit statement such as:
“No goods or services were provided in exchange for this contribution.”
This language must appear directly on the written acknowledgment. Omitting this statement, altering its meaning, or replacing it with informal wording may result in the receipt being considered non-compliant under IRS substantiation rules.
What if goods or services are provided in exchange for a donation over $250?
When a donor receives goods or services in exchange for a contribution of $250 or more, the charity must include a quid pro quo disclosure in the written acknowledgment. The receipt must describe the goods or services provided and include a good-faith estimate of their fair market value.
Only the portion of the donation that exceeds the value of the goods or services is tax-deductible. If this disclosure is missing or incomplete, the receipt does not meet IRS substantiation requirements and the donor’s deduction may be disallowed.
How can nonprofits easily generate IRS-compliant donation receipts for donations over $250?
Nonprofits can simplify compliance by using structured systems that standardize receipt content and apply IRS-required disclosures automatically based on donation type. For U.S. charities seeking a compliance-focused approach, DonorKite supports the generation and delivery of IRS-compliant donation receipts for donations over $250, helping ensure required acknowledgment language is applied correctly and consistently.
