The longer I work in fundraising, the more I’ve come to realize that raising money – and even communicating effectively – is much more difficult when there isn’t a good database recording past donations and communications. Many small nonprofits, including congregations, enter gifts and produce tax receipts using Excel or other rudimentary software. They may not have the money to spend on specialized fundraising software, or anyone who knows how to use it, or the time to research better solutions.

An efficient process for entering and tracking gifts is invaluable for attracting future gifts:

1. Good software makes it easy to produce receipts and thank you letters/emails

Experienced fundraisers will tell you that prompt, sincere acknowledgement of donations is one of the best ways to encourage that donor to make another gift. People want to know they have made a difference.

Other charities that they give to have huge fundraising departments with people whose whole job consists of entering gifts as soon as they come in and producing thank you letters. Most donors know that smaller, faith-based organizations don’t have the resources to send a thank-you within 48 hours (the recommended turnaround time) of receiving the gift. But the sooner they are acknowledged, the better they will feel.

If your organization is using software that make entering gifts and generating receipts and acknowledgement letters into an arduous process that leaves the gift processor opting to do it only a few times a year, you’re probably missing out on gifts that could be coming to you.

[Parishioners are a little more patient, especially if they know their congregation has no or very-part-time staff to do this work. But even in a congregation, members prefer to receive prompt acknowledgement when they make an unusually large (for them) gift, as well as annually for their gifts throughout the year.]

2. Good records allow you to notice gaps

Reports should be run every few months to identify those donors who used to give and have stopped. Occasionally the donor will let you know why this happened: loss of income (due to being laid off, retirement, selling the family business), moving away from the territory served by your cause, leaving the denomination, etc.

But most of the time, the donor won’t tell you why. And often, when contacted, the donor will reveal the reason they’ve quit giving is something you can change:

  • Perceived insufficient acknowledgement of previous gifts (see #1 above)
  • Feeling disconnected due to lack of communication about the organization’s current work (and therefore, unsure that gifts really do make a difference)
  • Thought they had already given or just forgot to do so
  • Annoyance at the direction the organization is going (staff changes, policy etc.) – you may not be able to make them happy with an explanation, but sometimes you can. Without any contact, that donor won’t be coming back.

If you have no way of tracking lapsed donors, this donor is likely to slip away for good.

3. Historical data helps identify good candidates for major or planned gifts

Occasionally, a donor will appear out of the blue and present your organization with an unsolicited large gift without any action on your part. But most of the time, that isn’t what happens. Generally, large gifts come from existing donors, who have witnessed the good work being done and want that work to continue. Planned gifts also usually come from existing donors, particularly those who have given consistently over many years, even if in smaller amounts.

Others may consider making such a gift if asked. Without a clear record of who the existing donors are, it can be difficult to know who to approach about making a larger gift. It’s not necessarily the people who drive the nicest cars and live in the fanciest houses!

4. Accurate, up-to-date records facilitate mailing lists

Producing a good mailing list for an appeal, newsletter, Christmas card, Phone-a-Thon, event invitation, etc. is a lot of work even with a good database. But it’s important: if people receive multiple mailings, mailings addressed to a deceased spouse, or a mailing they previously asked not to receive, they are likely to be annoyed, and your organization has wasted an expensive stamp. If the address is out-of-date or incorrect, the person likely won’t receive the mailing at all. Accurate records improve the return-on-investment of mailings.

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If you haven’t already got an excellent people/gift tracking system in place, it’s worth talking to someone who has experience doing this work for a larger organization before you select software, set up your database, and develop procedures. Everything is so much easier to set up right in the first place than it is to clean up later on.