If you’re operating a church, you’re required to file an annual information return and abide by Section 501(c)(3), which provides regulations for tax-exempt organizations. As a church, you’ll likely receive donations that you can use as you see fit from patrons throughout the year.

One of the stipulations of being a 501(c)(3) organization is that you need to provide each donor with a written acknowledgment form for any donation that is at least $250. The reason for this requirement is that donors must attach this letter with their tax records once they claim their charitable contributions deduction during tax filing. As your congregation grows, this task, however, may eventually become too tedious.

Keeping Track Of Donations With Efficient Non-Profit Bookkeeping

Just like business owners, church operators, like you, have several duties to address each day. These duties may include visiting ill church members or preparing for your church’s Sunday service. You will also need to keep track of the financial aspects of your church to make sure that you always have enough funds to operate.

It’s essential to keep track of donations, program service revenue, and investment income. If you have any professional fund-raising fees or other expenses, you will need to record the financial figures in your non-profit bookkeeping ledger. To make this easier, our team of expert non-profit accountants can help make sure that you have a dependable non-profit tax planning for your church. Having such will safeguard you against issues with the IRS when tax forms are due.

Recognizing Charitable Donations Of $250 Or More

One of the most burdensome tasks you, as a non-profit organization, will need to perform is the acknowledgment of donations received from church patrons that are $250 or more. Donor acknowledgment forms must be sent out no later than January 31 of the following year after receiving a charitable contribution. You have the option to send a donation acknowledgment letter as soon as you receive this type of contribution or wait until the end of the year. Our non-profit CPA can help you with this decision and keep track of more significant donations made by each donor. When sending a donor acknowledgment form, you’ll need to provide the following information:

  1. The name of your church and the name of the donor

  2. Your tax-exempt status statement, which can include your EIN

  3. The date you received a contribution

  4. The amount of a cash contribution or description (not value) of a non-cash contribution

  5. Statements related to providing goods or services, if applicable.

Non-Profit Tax Planning Is Important

Your church must keep track of more substantial contributions and have this information recorded by a non-profit accountant. It may be easiest to have a consolidated record of all contributions from donors so that you will have to maintain only a single document to keep as proof for the IRS. This can be incorporated into your non-profit tax planning for you to have a definite roadmap to follow. By working with our non-profit accountant, you’ll have access to our non-profit CFO advisory services. You’ll get to work with experienced non-profit financial advisers who can assist you with various financial requirements, such as designing compensation plans for church employees.

There are plenty of activities and duties to handle when you’re in charge of operating a church. By getting guidance from our non-profit financial advisers, or non-profit CPAs, we can help make your financial tasks easier, allowing you to focus on your church and community. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!


This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.