Nonprofit Invoice Template: Fees, Grants and Donations

Nonprofit invoice template with examples: when to invoice vs issue a donation receipt, grant reimbursement requests, tax-exempt status lines and sales tax.

By Invoice Creator Editorial Team 10 min readPublished: October 29, 2026Applicable jurisdiction: United States

Quick answer: A nonprofit invoice template is a bill a tax-exempt organization sends for earned revenue such as program fees, training, rentals, sponsorships or grant reimbursements. It looks like any invoice but adds the legal name, EIN and a tax-exempt status line. Donations are acknowledged with a receipt, not invoiced.

Nonprofits receive money in more ways than most small businesses, and each type of payment needs the right paperwork. A school district paying for after-school workshops needs an invoice. A donor writing a check needs a contribution acknowledgment. A foundation releasing grant funds may need a reimbursement request. Mixing these up creates problems at audit time and can mislead donors about what they can deduct.

This guide explains which payments a nonprofit should invoice, what a nonprofit invoice template should include, how to word the tax-exempt status line, how sales tax and unrelated business income fit in, and how to invoice grants. It includes a full example and a step-by-step checklist. You can build the invoice itself in our free invoice generator.

What is a nonprofit invoice?

A nonprofit invoice is a formal request for payment issued by a charity, foundation, association or other tax-exempt organization when someone owes it money for goods or services. Legally and practically it works like a business invoice: it identifies the seller and buyer, lists what was provided, gives the amount due and sets payment terms. The guide to writing an invoice covers the universal parts.

What makes a nonprofit invoice different is context. The organization's tax-exempt status, its accounting for restricted funds and the donor rules in IRS Publication 1771 all affect how a payment should be documented.

Invoice, receipt or acknowledgment? Fee-for-service vs donations vs grants

Start by classifying the payment. This table covers the most common nonprofit revenue types:

Payment type	Example	Document to issue	Deductible as a gift?
Fee-for-service	Training for a school, consulting, counseling program fees	Invoice, then payment receipt	No
Sale of goods	Books, merchandise, thrift store sales	Invoice or sales receipt	No
Facility rental	Renting a hall to a community group	Invoice	No
Membership dues	Annual membership with benefits	Invoice; may need quid pro quo disclosure	Only the part above the value of benefits
Event ticket or gala table	$150 dinner ticket	Invoice or receipt with quid pro quo disclosure	Only the part above the fair market value of the meal and entertainment
Corporate sponsorship	Logo on event banner	Invoice or pledge letter describing benefits	Business decides; qualified sponsorship is generally not taxable to the nonprofit
Donation (nothing in return)	$500 check from an individual	Written acknowledgment	Yes, subject to donor's own tax situation
Grant	Foundation or government award	Grant report, payment request or reimbursement invoice per agreement	Not applicable

Never send a donor an "invoice" for a voluntary gift. An invoice implies an obligation, and the IRS rules on charitable contributions focus on whether the donor received anything in return. For pledges, send a pledge reminder or statement instead, and when the gift is paid, issue a donation receipt.

Donation acknowledgment rules worth knowing

For any single contribution of $250 or more, a donor needs a contemporaneous written acknowledgment from the charity to claim a deduction. It should state the amount (or describe non-cash property) and whether any goods or services were provided in return.
For a quid pro quo contribution of more than $75 (part gift, part payment for something), the charity must give a written disclosure stating the deductible amount and a good faith estimate of the value of the goods or services provided.

These rules come from Publication 1771. They matter for invoices because gala tickets, auction purchases and memberships often blend a payment with a gift.

What should a nonprofit invoice template include?

Legal name and any DBA exactly as registered, plus address, phone and email.
EIN. Business customers need it for vendor setup, and many will ask for a Form W-9.
Tax-exempt status line (see wording below).
Invoice number, issue date and due date.
Customer details and their purchase order or contract number.
Program or project name. This helps your bookkeeper code revenue to the right program or restricted fund.
Line items with quantity, rate and amount.
Sales tax on taxable lines, or a note that the sale is exempt and why.
Payment instructions: ACH details, check payee name, card link.
Payment terms such as net 30; see our guide to invoice payment terms.

How to word the tax-exempt status line

A short status statement tells the customer who you are and avoids confusion about deductibility. Examples:

"Riverbend Youth Arts is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. EIN 12-3456789."
For fee-for-service invoices, add: "This invoice is for services provided and is not a charitable contribution."
For a sponsorship: "Sponsor recognition is limited to acknowledgment of the sponsor's name and logo."

Do not write "tax-deductible" on an invoice for services. Also note the difference between your exemption from federal income tax and a customer's exemption from sales tax. If a nonprofit is buying something tax-free, it gives the seller an exemption certificate; our guide to sales tax exemption certificates and the article on tax-exempt invoices explain that side.

Do nonprofits charge sales tax and owe tax on invoiced income?

Sales tax

Federal 501(c)(3) status does not make a nonprofit's own sales automatically exempt from state sales tax. Rules vary: some states exempt occasional fundraising sales or specific charitable activities, others tax them like any retailer. If you sell taxable items or services, you may need a seller's permit and to collect tax at the right rate. The sales tax calculator helps with the arithmetic once you know the rate.

Unrelated business income

Income from a regularly carried on trade or business that is not substantially related to the exempt purpose can be unrelated business taxable income. An exempt organization with $1,000 or more of gross income from an unrelated business generally files Form 990-T, as the IRS explains on its unrelated business income tax page. Typical examples include selling advertising in a magazine or running a business unrelated to the mission. Labeling invoices by revenue type makes this much easier to track.

This section is general information, not tax or legal advice. Talk to a CPA familiar with exempt organizations about your specific revenue.

How to invoice a grant (reimbursement requests and drawdowns)

Grants are paid in three common ways:

Upfront or scheduled payments. The funder pays on signing or on set dates. Usually no invoice is needed, just the reports the agreement requires.
Reimbursement. You spend first and request repayment. The funder often wants an invoice-style payment request listing budget categories, the period covered and supporting documentation such as payroll registers and receipts.
Deliverable-based payments. Payment follows a milestone, much like milestone payments in a client contract.

A reimbursement request typically includes the grant or award number, reporting period, a table of budget lines with approved budget, spent this period, spent to date and remaining balance, and a certification signed by an authorized officer. Federal awards normally use the agency's own payment system rather than a PDF invoice, so check the award terms first.

How to invoice sponsorships, memberships and rentals

Corporate sponsorships

Sponsorship invoices need careful wording because the tax treatment depends on what the sponsor receives. A qualified sponsorship payment gets acknowledgment only: the sponsor's name, logo, address, phone number or website, and neutral product descriptions. If the package also includes advertising, such as messages with qualitative or comparative language, price information, endorsements or an inducement to buy, that part can be unrelated business income. Describe the benefits on the invoice exactly as the agreement does, for example "Presenting sponsor recognition: logo on event banner and program", rather than "Advertising package". If the sponsor also gets tickets or a table, note their fair market value.

Membership dues

Dues that buy real benefits (a magazine, discounts, admission) are partly or fully a purchase. Invoice the dues at the published rate and, where the payment is partly a gift and exceeds $75, include the quid pro quo statement. Publication 1771 explains which low-cost membership benefits can be disregarded. Annual renewals are a natural fit for recurring invoices, sent 30 days before the renewal date.

Facility and equipment rentals

Renting out a hall, kitchen or vehicle is ordinary earned revenue. Invoice the rental period, any cleaning or staffing fees and a refundable security deposit as a separate line. Check whether your state taxes rentals and whether frequent rentals could be an unrelated business.

Bookkeeping for invoiced revenue at a nonprofit

An invoice is also an accounting record. Nonprofits report revenue by type on Form 990 (for example, program service revenue, contributions and grants, membership dues, rental income and fundraising events), so the way you set up invoices affects how easily the return comes together. A few habits help:

Use a revenue code or program name on every invoice so program service revenue can be traced to the activity that earned it.
Separate restricted grant funds from unrestricted fee income. Reimbursement requests should map to the budget lines in the award.
Record invoices as receivables when issued if you use accrual accounting, and track aging so overdue school or agency payments get followed up.
Keep the paid invoice, the payment record and the deposit together. Auditors will sample them.

Fiscally sponsored projects should invoice in the sponsor's legal name and EIN, not the project's, because the sponsor is the legal entity receiving the money. Agree with your fiscal sponsor who issues invoices and where payments go before the first one goes out.

Example nonprofit invoice (fee-for-service)

A youth arts nonprofit invoices a school district for an after-school program. Names and figures are fictional.

Description	Qty	Rate	Amount
Teaching artist sessions, grades 3 to 5 (90 min each)	16	$175.00	$2,800.00
Program coordination (hours)	10	$55.00	$550.00
Art supplies kit per student	60	$12.00	$720.00
Family showcase evening (flat)	1	$400.00	$400.00
Subtotal			$4,470.00
Sales tax (buyer exempt, certificate on file)			$0.00
Total due			$4,470.00

Notes: Riverbend Youth Arts is a tax-exempt organization under Section 501(c)(3). This invoice is for services and materials provided and is not a charitable contribution. Pay by ACH (details on W-9 packet) or check payable to Riverbend Youth Arts.

Worked example: a gala ticket with quid pro quo

The same nonprofit sells gala tickets at $150. Dinner and entertainment have a fair market value of $60. The ticket buyer may deduct $90 at most, and because the payment exceeds $75, the organization must disclose this in writing. The ticket confirmation or invoice should say: "The deductible portion of your $150 payment is limited to $90, the amount exceeding the $60 estimated value of the dinner and entertainment provided."

Step-by-step: creating a nonprofit invoice

Classify the payment: service, goods, rental, sponsorship, membership, grant or gift.
If it is a gift, stop and issue an acknowledgment instead.
Open the invoice generator and add your legal name, address, EIN and logo.
Assign a number by program, such as RYA-2026-031; the invoice number generator can suggest a format.
Enter the customer, PO and program name.
Add line items and decide whether each line is taxable.
Add the status line and any quid pro quo disclosure.
Set terms, download the PDF and record it in your books against the correct program or fund.

Common mistakes on nonprofit invoices

Invoicing donors. Use pledge reminders and acknowledgments for gifts.
Calling service fees "donations". It misleads payers and can create tax problems for them.
Assuming no sales tax applies. Check state rules for every taxable product line.
Missing the quid pro quo disclosure on event tickets and memberships with benefits.
No program code. Without it, restricted and unrestricted revenue get mixed up.
Weak follow-up. Nonprofits are often reluctant to chase partners. A clear due date and a polite reminder sequence protect cash flow.

A nonprofit invoice template should make one thing obvious: whether the payment is for something received or a gift. Use invoices for earned revenue, acknowledgments for donations and the funder's format for grants, and include your EIN and status line every time. Our invoice generator is free, requires no sign-up and creates a PDF in your browser, so your team can produce consistent nonprofit invoices without paying for another subscription.

Frequently asked questions

Can a nonprofit send an invoice?

Yes. Nonprofits invoice for many kinds of earned revenue: program fees, training, consulting, event booths, facility rentals, membership dues and grant reimbursements. Being tax-exempt does not change how an invoice works. What changes is how certain payments are documented. A gift with nothing in return gets a donation acknowledgment, while a payment for services gets an invoice and, when paid, a receipt.

Is an invoice from a nonprofit tax-deductible for the payer?

Not as a charitable contribution if the payer receives services or goods of equal value. A school paying a nonprofit for workshops is buying a service, which may be a deductible business expense for a business payer but is not a charitable gift. Only the portion of a payment that exceeds the value of what the payer receives can count as a contribution.

Should a nonprofit put its EIN on invoices?

It is common and helpful. Business customers often need the EIN to set up the nonprofit as a vendor, and some will ask for a Form W-9. Adding the legal name, EIN and a short tax-exempt status line reduces back-and-forth with accounts payable. The EIN is public information for most exempt organizations because it appears on Form 990 filings.

Do nonprofits have to charge sales tax?

Often yes, when they sell taxable goods or services. Federal tax exemption does not automatically exempt a nonprofit from collecting state sales tax. Some states exempt certain sales by charities, such as occasional fundraisers, while others do not. Check your state revenue department and register for a seller's permit if your sales are taxable.

What is the difference between a sponsorship invoice and an advertising invoice?

Under IRS rules, a qualified sponsorship payment gets only an acknowledgment of the sponsor's name or logo, with no qualitative or comparative language, price information or calls to action. That is generally not taxable to the nonprofit. If the package includes advertising, such as endorsements or promotional messages, that part may be unrelated business income. Describe sponsorship benefits accurately on the invoice.

How do I invoice a foundation for a grant?

Follow the grant agreement. Some foundations pay on a schedule after signing and need no invoice. Others ask for a payment request or reimbursement invoice that cites the grant number, the period, budget categories, amounts spent and amounts requested, with supporting documentation. Government grants usually use their own payment systems and forms, so use those rather than a standard invoice.

Can a nonprofit charge late fees on invoices?

Yes, if the late fee was agreed in a contract or clearly stated before the work, and it complies with state law. Many nonprofits choose not to charge late fees to partner organizations or schools, preferring reminders instead. If you do charge one, state the rate and grace period in your payment terms and apply it consistently.

Does a nonprofit need to send a 1099 to the people it pays?

Nonprofits have the same information return duties as other payers. If an exempt organization pays an independent contractor $2,000 or more for services in 2026, it generally files Form 1099-NEC, after collecting a Form W-9. Payments to corporations are usually exempt from 1099 reporting, with some exceptions such as attorney fees.

Invoice Creator Editorial Team

Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.

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