# Donor Acknowledgment Letters: How QuickBooks Can Help Automate Them

Donor acknowledgment letters are more than just a thank-you note. They’re a legal requirement and a powerful donor retention tool. These letters show appreciation and provide the necessary documentation donors need for tax purposes. But manually sending them out can take up a lot of time—especially for nonprofits with limited staff. That’s where QuickBooks steps in.
QuickBooks is not just an accounting tool—it can also streamline and automate donor acknowledgment letters, saving you hours and making sure you never miss a thank-you again.

## What Are Donor Acknowledgment Letters?
Donor acknowledgment letters are written communications sent by **[nonprofits to donors after receiving a donation](https://ebetterbooks.com/quickbooks-training/record/donation/)**. These letters confirm that the gift was received, express appreciation, and provide key information donors may need for tax purposes.
They serve both legal and relationship-building functions. Without acknowledgement letters, you risk non-compliance with IRS rules and miss a crucial opportunity to thank and retain your supporters.

## What Should Be in a Donor Acknowledgment Letter?
A typical donor acknowledgment letter should contain the following elements:
* A warm greeting (e.g., “Dear John,”)
* Thank you message: “Thank you for your generous donation of $500 on March 15, 2025.”
* Statement of gift: “No goods or services were provided in exchange for this donation.”
* Your nonprofit’s name and EIN (Employer Identification Number)
* Signature from the executive director or development officer

With QuickBooks, you can pull this information directly from your donor and sales data.

## How QuickBooks Supports Nonprofit Donor Management
While QuickBooks is known for financial management, it also provides tools that support donor tracking:
* Custom customer types for donors
* Donation tracking using sales receipts or invoices
* Class tracking for different programs
* Memorized reports to filter by donor name, amount, or date

By treating donors as "customers," QuickBooks makes it easy to pull data for mail merges and email acknowledgment letters.
## IRS Requirements for Donor Acknowledgment
If a donor gives $250 or more, the IRS requires that they have a written acknowledgment that includes:
* The name of your organization
* The amount or description of the donation
* A statement that no goods or services were provided in return (unless there were, in which case you must describe them)

This makes keeping accurate and timely **[acknowledgment records in QuickBooks](https://ebetterbooks.com/quickbooks-training/record)** critical.
## Step-by-Step: Automating Donor Acknowledgment Letters in QuickBooks
Here’s how to automate donor thank-you letters:
### Step 1: Set Up Donors as Customers
* Go to the Customer Center
* Click New Customer & Job
* Add the donor’s full name and email address
* Set Customer Type as “Donor”
### Step 2: Record the Donation
* Use a Sales Receipt or Invoice
* Assign an appropriate income account (e.g., Donations)
* Add a Memo (e.g., “For Scholarship Fund”)
### Step 3: Export Donor Data
* Create a custom report that includes:
1. Donor Name
1. Amount
1. Date
1. Email
### Step 4: Use Mail Merge or Email Tool
* Export the report to Excel
* Use Word’s Mail Merge or tools like Google Docs + Autocrat
* Automatically generate personalized acknowledgment letters
## Best Practices for Customizing Letters in QuickBooks
* Include donor-specific details to show appreciation.
* Add personal notes if they are repeat donors.
* Use templates with placeholders (e.g., [Donor Name], [Donation Amount]).
* Keep your tone warm, professional, and sincere.

QuickBooks lets you maintain consistency while still keeping letters personalized and meaningful.
## Tracking Sent Acknowledgments in QuickBooks
To track which donors have been acknowledged:
* Use the custom field “Acknowledgment Sent?” and mark as Yes when complete.
* Run a custom report to show all donors with donations over $250 and no acknowledgment sent.
* Use tags or memo fields to leave internal notes for your team.

This keeps you organized and helps avoid duplication or oversight.
## Common Mistakes to Avoid
* **Missing IRS statements**: Always include whether goods/services were exchanged.
* **Generic messages**: Donors appreciate personal touches.
* **Outdated contact info**: Keep donor profiles updated.
* **Ignoring small donors**: Consistent appreciation boosts long-term giving.
## Benefits of Automating Acknowledgments
* Saves time during peak donation seasons.
* Reduces chances of missing required tax statements.
* Improves donor satisfaction and retention.
* Ensures professionalism across all donor communications.
## Using QuickBooks Online vs Desktop for Acknowledgment Letters
### QuickBooks Desktop
* Stronger mail merge options
* More reporting filters
* Easier Excel exports for letters
### QuickBooks Online (QBO)
* Easier integration with cloud tools
* Supports third-party add-ons like DonorDock or Kindful
* Real-time data access for teams

Both versions can help automate acknowledgments, but Desktop may be better if you rely heavily on Word and mail merge.
## Keeping Records for IRS Compliance
QuickBooks makes it easy to track:
* Donation history
* Acknowledgment dates
* PDF copies of letters sent (attached to donor profiles)
* Year-end summary reports

Always archive your letters and keep backups. IRS audits may require copies of all correspondence.
## Conclusion
Donor acknowledgment letters are essential—not just for saying thank you, but for staying IRS-compliant and building long-lasting donor relationships. While doing this manually can be time-consuming, QuickBooks offers an easy way to automate and personalize these letters. With tools for tracking, reporting, and mail merging, QuickBooks helps nonprofits save time and maintain professionalism—all while ensuring every donor feels appreciated.
## FAQs
## Can QuickBooks Automatically Send Donor Acknowledgment Emails?
Not directly, but you can export donor data and integrate with email tools like Mailchimp, Gmail, or Autocrat for bulk personalized sending.
### How do I Track which Donors have Received Thank-You Letters?
Use a custom field or memo in QuickBooks to mark acknowledgment sent. You can also attach PDF copies to donor profiles.
### What’s the Difference Between a Receipt and an Acknowledgment Letter?
A receipt confirms payment; an acknowledgment letter fulfills IRS requirements for tax-deductible donations and expresses gratitude.
### Do I Really Need to Send Acknowledgment Letters for Every Donation?
Yes, especially for donations of $250 or more, the IRS requires a written acknowledgment. But it’s a best practice to thank every donor—small or large—to boost donor loyalty.
### Can QuickBooks Online Help me Send Acknowledgment Letters?
Absolutely! While QuickBooks Desktop has more advanced mail merge options, QuickBooks Online integrates with cloud tools like Google Docs and Autocrat to automate and send personalized thank-you emails or letters.