In a recent Tax Matters item, you said that because of the new Pension Protection Act "Charities that now think they must provide a substantiation letter only for gifts of more than $250 will want to assure that their donors are in a position to claim the deduction for their gifts and will want to acknowledge all [cash] gifts, no matter how small." Is this an affirmative duty of the charity? Or just a nice thing to do for donors? We get a lot of $1 donations and it costs us more to receipt the donation than it's worth.
It is not a legal requirement for the charity to provide the receipt. It is a requirement for the donor of actual cash (not a check) to have substantiation from the charity in order to claim a deduction of any amount. (See Ready Reference Page: “Charities Have New Opportunities, Responsibilities in Fundraising.”) $1 donors may not care, but larger cash contributors may. You probably have a sense of who will want a receipt even if you are not prepared to give one to everyone.