Process Donations & Nonprofit Fundraising

Processing donations should be a core competency of your nonprofit, especially as it relates to effective donor cultivation. How a nonprofit, 501 (c) 3 organization processes donations and handles all the associated tasks is critical to the health of the organization. Process Donations is here to address these important topics which will help you to build your donor base as you process donations.

What you need to understand up front is that processing donations is inter-connected with every practical issue of nonprofit fundraising such as gift acknowledgment, receipt generation, and donor cultivation.

I've been involved with nonprofits for over 25 years doing charitable work here in the United States and serving humanitarian causes overseas.

I've made a living by the kindness of people who believe in the projects I promote. My experience in donor relations has been with two different types of individuals.

Types of Donors

The first kind is someone who understands and believes in the purpose and programs that need funding and commits to give a contribution regularly, usually every month.

The other type of donor is one who gives only in response to a direct appeal for a specific program, opportunity, or need.

This second type of donor may be very generous with each contribution and might even respond to most or all appeals. This donor may even give as often as the monthly donor if you make a monthly appeal, but this is different from the first kind of donor who gives regularly, apart from a direct appeal.

Processing contributions for these two types of donors is very different. How the gift is acknowledged and the formatting of the receipt depends upon the type of donor.

Donate Your Car to Charity / Gifts in Kind

Gifts in Kind include various non-cash contributions. For example, many nonprofits will let you donate a car. They facilitate the process and issue you a receipt.

Nonprofit Bookkeeping and Accounting

You should standardize your bookkeeping and accounting procedures, of course, but you want to also have the flexibility in the output of thank you letters and receipts. You want to do this so that you can personalize donor recognition as much as possible. This is essential if you want to effectively cultivate your donors.

Process Donations Topics

This brings up other issues that need to be considered, such as fundraising software, major gifts (including the ask), special events, planned giving, organizational and board development.

Some of these topics are covered on the other pages of the Process Donations website, so look around for the information you need right now.

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NOTE: The IRS has its own rules and regulations when it comes to receipting contributions. All that can be found on the IRS website by searching for charitable donations. You will have to sort through a lot of information so look directly for the requirements nonprofits have for issuing tax-deductible receipts. Its best to avoid doing anything that would jeopardize the 501 (c) 3 status, especially before the final determination letter is issued.