How to use this tool
Enter one payment at a time: the amount the donor paid, what the donor received (a meal, a ticket, merchandise, a membership benefit or a logo item), and its fair market value, meaning what it would cost in a normal commercial sale. For logo items, enter what they cost you. Religious organizations can also mark benefits as intangible religious benefits.
The result shows the deductible amount, whether each written statement is required and draft wording you can adapt.
The rule behind it
Deductible amount. A donor can deduct a payment only to the extent it exceeds the fair market value of the goods or services received. Publication 1771 gives the example of a $100 payment for a concert ticket worth $40: the deduction may not exceed $60.
Written acknowledgment ($250 or more). Under IRC 170(f)(8), a donor cannot deduct a single contribution of $250 or more without a contemporaneous written acknowledgment from your organization. It must state the cash amount or describe (not value) any property, say whether you provided goods or services, and describe and estimate their value in good faith. Under Regulation 1.170A-13(f)(1), the rule does not apply when the deductible portion is under $250, and separate gifts under $250 are not added together.
Quid pro quo disclosure (over $75). Under IRC 6115, when a donor pays more than $75 partly as a gift and partly for goods or services, you must give a written statement, at solicitation or receipt, that the deductible amount is limited to the payment minus the value of what the donor received, together with a good faith estimate of that value. The penalty under IRC 6714 is $10 per contribution, up to $5,000 per fundraising event or mailing, unless the failure was due to reasonable cause.
Benefits you can disregard. Publication 1771 and Regulation 1.170A-13(f)(8) list three exceptions. For 2026, Rev. Proc. 2025-32 sets the token amounts:
| Exception | 2026 test |
|---|---|
| Token: low value | Benefits worth no more than 2% of the payment or $139, whichever is less |
| Token: logo items | Payment of at least $69.50, and only items bearing your name or logo costing you $13.90 or less in total |
| Membership benefits | Annual payment of $75 or less for rights such as free admission, parking or gift shop discounts |
| Intangible religious benefits | Benefits from a religious organization not sold commercially, such as admission to a religious service |
The token exceptions apply to payments made in a fundraising campaign in which you tell the donor how much is deductible.
Worked example
A hypothetical arts studio sells $250 gala tickets that include a dinner worth $90.
- Deductible amount: $250 − $90 = $160.
- Quid pro quo disclosure: required, because the payment is over $75.
- Written acknowledgment: not required by 170(f)(8), because the deductible portion, $160, is under $250. Sending one anyway is good practice.
Separately, a donor gives $500 and receives a logo mug that cost the studio $8. The payment is at least $69.50 and the mug cost no more than $13.90, so the mug is disregarded. The full $500 is deductible, a written acknowledgment is required, and the studio may state that no goods or services were provided.
Suggested wording, adapted from Publication 1771:
- No benefits: "Thank you for your cash contribution of $500 that [organization] received on [date]. No goods or services were provided in exchange for your contribution."
- With benefits: "Thank you for your payment of $250 received on [date]. In exchange, you received a dinner with an estimated fair market value of $90. The amount of your contribution that is deductible for federal income tax purposes is limited to the excess of your payment over the value of goods and services we provided, or $160."
The donation receipts guide covers annual summaries, timing and record-keeping.
What this tool does not cover
The tool does not value donated property, apply the extra rules for noncash gifts that may require Form 8283 or an appraisal, or handle donated cars, boats and airplanes. For state fundraising rules, see state charitable solicitation registration.
Frequently asked questions
Does a donor who gives $50 every week need an acknowledgment?
Not under 170(f)(8). Separate contributions under $250 are not combined, even if the yearly total is $250 or more. The donor still needs a bank record or a written communication from you for each gift.
Can we email acknowledgments?
Yes. Publication 1771 says an acknowledgment may be provided electronically, such as by email, and that one annual summary may cover several gifts.
When is an acknowledgment "contemporaneous"?
The donor must receive it by the earlier of the date they file their return for the year of the gift or the return's due date, including extensions.
Sources
- IRS: Publication 1771, Charitable Contributions: Substantiation and Disclosure Requirements (Rev. November 2023). irs.gov
- IRS: Rev. Proc. 2025-32, section 3.33. irs.gov
- Cornell LII: 26 U.S. Code § 170, subsection (f)(8). law.cornell.edu
- Cornell LII: 26 U.S. Code § 6115. law.cornell.edu
- eCFR: 26 CFR 1.170A-13, Recordkeeping and return requirements. ecfr.gov
- eCFR: 26 CFR 1.6115-1, Disclosure requirements for quid pro quo contributions. ecfr.gov
IRS forms, fees and inflation-adjusted amounts change. We review this page when the IRS publishes new instructions.
501Nonprofit.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.