Donations, Gift Acknowledgements, and Thank-you Letters

Now that tax season is upon us, most individual filers are scrambling to maximize their itemized deductions. One thing that many filers look to for those extra deductions is charitable contributions. The IRS requires thank-you letters from nonprofit organizations to substantiate the claims of these deductions in excess of $250. But what should be in a thank-you letter? What required language needs to be in the letter? What part of the gift is considered a donation?