Best Practices For Tracking Donations
As we start to approach the year’s end, it is no time to let your books give you nightmares! No spells or seances are needed to have your donation records all neat and tidy. Tracking donations keeps you accountable to your donors and ensures your organization avoids potentially costly financial mistakes.
Use tools. There are so many different tools available, where do you start? Easy answer… start somewhere! Create a plan on what information is needed and to answer the questions you, your development team, and your board are asking. Starting small with a relatively simple spreadsheet is a good way to get started for smaller organizations. However, as the organization grows and matures, a more robust system is likely needed.
We recommend cloud-based CRM (Customer Relationship Management) tools such as Network for Good, Little Green Light, and Salesforce. You may be able to use your accounting system for this effort (we love Quickbooks Online!). However, the limitations of accounting tools to store donor information and support fundraising efforts will eventually force you to look elsewhere. Ideally, use the accounting software for financial management and tracking the details of restricted donations and enlist a CRM that integrates seamlessly with it.
Analyze your results. By tracking donations in detail you get clarity around which of your fundraising efforts succeeded and which underperformed. This insight will help decide to expand a project or to diversify your donor base to find funds elsewhere. You can create reports to find helpful information like your top donors, fundraising channels, and campaigns as well as segment your donors to appeal to subsets of them with different means or messaging.
Stay consistent. By tracking all donations in a uniform way, you can see your progress and trends over whatever time period is most insightful. This helps you build out revenue goals and projections and assist with the overall budgeting and planning of how the organization will deliver on its mission.
Review your practices and systems. Often organizations outgrow their processes. Ask your team, board, and any other stakeholders what data they need or want. The organization’s efforts can be streamlined if capturing certain data points are not needed or expanded if additional information can be leveraged into higher donor engagement.
What is your current process for donor and donation tracking? What is going well? Where are there issues? Asking these questions might be the difference between a treat and a trick in the fourth quarter. As always, we are happy to answer any questions you might have with your financial management and donation tracking!