For food pantries, soup kitchens, shelters, backpack programs and food banks
Food pantry donation letters: the receipt for neighbors who bring cans, and the written statement grocers, farms and restaurants need for the enhanced deduction
A food pantry's donors split into two groups with different paperwork. Individuals who give cash or groceries get the ordinary IRS acknowledgment. Businesses that donate food from their inventory can claim a larger "enhanced" deduction under Section 170(e)(3), but only if your pantry gives them a written statement containing four specific representations. Nobody tells small pantries this until a donor's accountant calls in March. The template below has all four, and the generator can add them to every non-cash letter automatically.
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Who gave what, and which letter they need
| Donor and gift | Tax treatment for the donor | What your letter says |
|---|---|---|
| Individual gives cash, a check or an online gift | Ordinary charitable deduction; written acknowledgment required at $250+ | Standard cash acknowledgment: amount, date, no goods or services |
| Neighbor brings groceries to a food drive | Non-cash deduction at fair market value (small); acknowledgment required at $250+ | In-kind letter: describe the items, no dollar value |
| Grocery store, restaurant, bakery, farm or distributor donates food from inventory | Enhanced deduction under §170(e)(3)(C): lesser of basis + half the markup, or 2× basis; capped at 15% of business income | Food-inventory statement with the four representations (template below); describe quantity and date, no value |
| Cash-method farmer with "zero basis" produce | Basis deemed 25% of fair market value, so roughly 50% of FMV is deductible | Same food-inventory statement |
| Business donates non-food inventory (diapers, formula, toiletries, coats) | Enhanced deduction under §170(e)(3)(A) if the donor is a C corporation; otherwise basis only | Same statement; the four representations are identical |
| Business writes a check or gives gift cards | Cash contribution (corporate 10%-of-income limit) or a business expense | Standard cash acknowledgment addressed to the business |
| Register round-up / checkout donations remitted by a store | The customers are the donors, not the store | Thank the store for hosting; no deduction language for the store |
| Food received from your regional food bank | Not a gift to you in the tax sense; the original donor already has their statement from the food bank | You owe the food bank a transferee statement (usually built into your agency agreement) |
| Volunteer drives rescue routes or shops for the pantry with their own money | Unreimbursed volunteer expenses, 14¢/mile; acknowledgment required at $250+ | Volunteer expense letter: describe the services, no goods or services provided |
| Business sponsors your fundraiser or truck wrap | Qualified sponsorship payment or advertising | Sponsorship letter |
The four things the statement must say
Treasury Regulation §1.170A-4A(b)(4) spells out the donee's written statement. It must describe the property and state the date you received it, and it must represent that:
- the property will be used in compliance with §170(e)(3): solely for the care of the ill, the needy or infants, related to your exempt purpose, and not in an unrelated business;
- it will not be transferred, by you or by anyone you pass it to, in exchange for money, other property or services;
- your organization is a §501(c)(3) that is not a private non-operating foundation; and
- you will keep adequate books and records and make them available to the IRS on request.
Deadline: a reasonable time after the gift, and in any case before the due date (with extensions) of the donor's tax return for that year. For a calendar-year business that usually means by March 15 or April 15 of the following year, so January is the month to send annual summaries. A statement per delivery, signed by whoever receives the food, is simpler and is what large donors' accounting departments expect.
The arithmetic is the donor's problem, but it helps to know why they care. Food that cost a grocer $400 and would have sold for $1,000: the ordinary rule allows $400; the enhanced rule allows the lesser of $400 + $300 = $700 or 2 × $400 = $800, so $700. For food that could not be sold because of appearance, age or surplus, fair market value is the price the donor charges for the same or similar food. None of this goes in your letter.
Food inventory donation statement (for business donors)
Use once per delivery, or list each date and quantity for a monthly or annual summary. Do not add a dollar value.
[Organization legal name] [Mailing address] EIN [00-0000000] [Date] [Contact name] [Business name] [Business address] Re: Written statement for a contribution of food inventory (Internal Revenue Code Section 170(e)(3)) Dear [Contact first name], Thank you for [Business name]'s donation to [Organization name]. On [Date received], we received the following property: [description and quantity, e.g. 412 lbs of fresh produce (apples, potatoes, onions) and 36 loaves of bread]. No goods or services were provided in exchange for this contribution. We have not assigned a value to the donated property; the donor determines fair market value and basis. For purposes of Section 170(e)(3) of the Internal Revenue Code, [Organization name] represents that: 1. The donated property will be used solely for the care of the ill, the needy, or infants, in a manner related to our exempt purpose, and will not be used in any unrelated trade or business. 2. The property will not be transferred by us, or by any organization to which we transfer it, in exchange for money, other property, or services. 3. [Organization name] is an organization described in Section 501(c)(3) of the Internal Revenue Code and is not a private foundation (other than a private operating foundation). 4. Adequate books and records relating to the donated property will be maintained and made available to the Internal Revenue Service upon request. Because of donations like yours, [Organization name] served [number] households in [month/year]. Thank you for helping us keep our shelves full. With thanks, [Signer name] [Title] [Organization name]
Food drive / neighbor donation paragraph
For individuals who bring groceries. Describe, do not value.
Thank you for your donation to [Organization name]. On [Date], we received [description, e.g. 3 bags of non-perishable groceries: canned vegetables, pasta, peanut butter and cereal]. No goods or services were provided in exchange for this contribution. This letter describes the items received; the donor is responsible for determining their fair market value for tax purposes. [Organization name] is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, EIN [00-0000000].
Every food donor from one receiving log
Keep a sheet with Name, Date, Amount (for cash) and Description (for food: "412 lbs produce and 36 loaves bread"). Turn on the Food pantry / shelter switch in the generator (the button above does it for you) and every non-cash letter gets the four Section 170(e)(3) representations, while cash donors get the ordinary acknowledgment. Export a PDF, Word file or mail-merge CSV; the generator never prints a value for food.
Food donation letter questions
What is the enhanced deduction for donated food, in plain English?
Normally a business that donates inventory can deduct only what the goods cost it (basis). For apparently wholesome food donated to a 501(c)(3) that uses it to feed the ill, needy or infants, Section 170(e)(3)(C) lets the business deduct the lesser of (a) basis plus half of the markup it gave up, or (b) twice its basis. Example: food that cost the grocer $400 and would have sold for $1,000 is a $700 deduction instead of $400. The deduction is capped at 15% of the business's net income from the trade or business for the year (15% of taxable income for C corporations), with a five-year carryforward.
Which businesses can use it?
Any taxpayer engaged in a trade or business that holds the food as inventory: grocery stores, restaurants, caterers, bakeries, farms, dairies, food manufacturers and distributors, whether they are C corporations, S corporations, partnerships, LLCs or sole proprietors. Before the PATH Act of 2015 the food rule was mostly limited to C corporations; it is now permanent and available to all business forms. A neighbor donating groceries from their own kitchen is not donating inventory and gets the ordinary non-cash treatment instead.
What exactly does the pantry have to put in writing?
Treasury Regulation 1.170A-4A(b)(4) requires a statement that (A) describes the property and states the date it was received, and represents that (B) the property will be used for the care of the ill, needy or infants, in line with your exempt purpose, and not transferred for money, property or services; (C) your organization is a 501(c)(3) that is not a private non-operating foundation; and (D) you will keep adequate books and records and make them available to the IRS on request. The template on this page contains all four. It must reach the donor within a reasonable time and no later than the due date (including extensions) of the donor's return for the year of the gift.
Do we have to state a value or the number of pounds?
Do not state a dollar value; valuation is the donor's job, and a pantry that writes a value on the letter can create problems for both sides. Do describe the property specifically enough that the donor's accountant can match it to their records: pounds or cases, product categories, and the date. Many pantries keep a scale by the receiving door for exactly this reason. One statement per delivery is cleanest; a monthly or annual summary listing each date and quantity also satisfies the rule.
What records do we have to keep?
The regulation is forgiving: your books do not need to trace specific cans to specific households. They are adequate if they show total quantities received and distributed (or used) and describe how you determine that recipients are ill, needy or infants, for example an income self-declaration or a referral from a school or agency. You never have to record the names of the individuals who received the food.
Can we charge a small fee or ask for a donation from clients?
The donated food cannot be transferred in exchange for money, property or services, so a pantry that sells donated food, or requires volunteer hours to receive it, breaks the rule for the donor. A voluntary donation jar that has no bearing on who receives food is fine. Food banks that pass food to member agencies may charge a small per-pound shared-maintenance fee to cover handling, but that fee may never be based on the food's value.
We get most of our food from the regional food bank. Do we owe anyone a statement?
Yes, in the other direction. When a food bank passes donated food to your pantry, the regulation asks the receiving organization to give the transferring food bank a written statement with the description, date, use representations and record-keeping promise, plus confirmation that you are a 501(c)(3). In practice your agency agreement with the food bank usually contains these promises; check that it does before signing, and keep a copy.
A farmer donated a truckload of produce and says their basis is zero. Does the enhanced deduction still work?
Yes. For cash-method businesses that do not capitalize the cost of growing or producing the food, the statute deems the basis to be 25% of the food's fair market value, which works out to a deduction of 50% of fair market value. Nothing changes on your side: same statement, same records. Point the farmer to Section 170(e)(3)(C)(iv) and let their tax preparer do the arithmetic.
The food was past its sell-by date or could not be sold. Is it still deductible?
Often yes. The law covers apparently wholesome food that meets safety and labeling standards even if it is not readily marketable because of appearance, age, freshness, grade, size, surplus or similar conditions, and it says fair market value for such food is the price at which the same or substantially similar food is sold by the donor at the time of the gift. The Bill Emerson Good Samaritan Food Donation Act separately protects good-faith food donors and nonprofits from liability. Your statement should describe the food honestly; it does not need to address condition.
Does the register round-up or checkout donation program count as the store's gift?
No. When customers add a dollar at checkout, the customers are the donors and the store is passing the money along. Thank the store for hosting the program, but the acknowledgment language and any deduction belong to the customers, who normally rely on their register receipts. If the store separately writes you a corporate check or donates product from its shelves, that part is the store's own gift and gets a normal cash letter or the food-inventory statement.
Do neighbors who bring cans to a food drive get a tax letter?
They are entitled to one if they ask, and anyone claiming $250 or more in non-cash gifts needs a written acknowledgment. Describe what was received, state that no goods or services were provided and do not assign a value; the donor values the groceries themselves, usually at what they paid or a thrift-store price. For a school or office food drive the drive organizer is not the donor and gets a thank-you note rather than a tax letter.
Our volunteers drive food-rescue routes in their own cars. Can we acknowledge that?
Yes, and it is worth doing. Out-of-pocket costs of volunteering, including mileage at the charitable rate of 14 cents per mile, are deductible by the volunteer, and for $250 or more in a year the IRS expects a written acknowledgment from the charity describing the services provided and stating that no goods or services were given in return. The foster-volunteer letter on the animal rescue page is the same letter with a different noun.
General information based on Internal Revenue Code §170(e)(3) and §170(f)(8), Treasury Regulation §1.170A-4A, IRS Publication 1771 and Publication 526, and the Bill Emerson Good Samaritan Food Donation Act. Not legal or tax advice; business donors should confirm their deduction with a tax adviser.