Small Non Profit? 10 Steps to Build Your Fundraising InfrastructureMay 11, 2023
1. CONTACT MANAGEMENT (FUNDRAISING) SOFTWARE
You do not need a state-of-the-art fundraising software program – but you need something. Inexpensive programs to consider are: Telosa Exceed! Basic, eTapestry, DonorPerfect Online, Sage Fundraising 50 (formerly Paradigm).
A well done spreadsheet with pros, cons, features and cost of the most common software programs can be found on my website. fundraising sites software allows you to keep track of all your constituents. You have the ability to generate correspondence (thank you letters, pledge reminders, e-blasts). Whatever system you use, it must allow you to track all “personal interactions” between you and your stakeholders. You need the ability to update information easily and generate lists of constituents by affiliation (dignitaries, staff, current donors, community groups, donors giving at a certain level or frequency). As a small non profit you require an easy-to-use program which can produce “canned” reports; the ability to run a query is nice, but requires some skill to get it right. The software purchase must come with technical support. If there is a glitch, tech support is priceless.
Upon the purchase of your software program, proper training is essential. Perhaps more importantly, one person should be responsible for entering data. This responsibility cannot be delegated to various volunteers; there is too much room for data entry error and lack of adequate training. Without reliable data entered into the system, into the right fields, all ultimate report generation is worthless.
2. RECONCILE DONATIONS WITH ACCOUNTING
It is rare to find a fundraising software program which integrates accounting/bookkeeping software. In fact most new non profits use Quick Books, or the Treasurer of your Board is responsible for keeping the books for ultimate IRS reporting.
Reconciling your fundraising software gifts or pledges with accounting is essential for two main reasons. First, it will let you know immediately if you are entering data incorrectly or have missed a contribution. You see, when you reconcile with a bank statement you KNOW that information is correct. Second, when you make your fundraising report to your Board you want your fundraising numbers for the month to jive with the numbers Accounting will be presenting. Otherwise, it’s an embarrassment and you will need to justify the discrepancy.
3. PROCEDURES AND PROTOCOLS
Yes, you have so many other things to do, yet without two specific procedures you will be bruised from kicking yourself. Here’s why.
First, you should have a fundraising procedure on how donations are handled; and I am talking about from the moment the postman brings in your mail to the point of the check being deposited. It’s an easy procedure to put into place. The person who gets the mail should sort what looks like a donation and the procedure will explicitly state they are not authorized to open that envelope. This person will take the unopened donation envelopes to accounting/bookkeeping. Once in the hands of the bookkeeper, the gift is opened, check is endorsed and two copies made. One copy for the person managing the fundraising software for gift entry and the second copy for accounting files. This way you only have ONE person handling the “cash”. If you are audited, they will hold you in high regard for having this procedure in place.
Second, you need a procedure for entering information into the fundraising database, including frequency of sending thank you letters. This procedure will include 1) who receives copies of checks, 2) who is responsible for gift entry, 3) how to enter specific information into the database (snag this information from your training manual and, 4) to reconcile your data with accounting each month.
What I have described above is a very simplified version of your procedures; it should be much more detailed. Each step by step move must be documented should the person who is responsible leave. It would be a luxury to hire a professional fundraising consultant to assess your systems and write these protocols and it would be money well spent.
4. IN KIND GIFT POLICY
This policy will be a part of your data entry procedures manual, as many organizations will undoubtedly receive gifts made in kind. You need to define what is and what isn’t considered an “in kind” gift. An in kind gift that is needed by your organization is considered budget relief, because the item(s) was budgeted; meaning you would have had to purchase it had it not been donated. When you receive an in kind gift that is budget relief, you must have in kind listed as one of the methods of how the gift came to you. In your fundraising database it will be part of the menu that allows you to select if it was given by Visa, Cash, Stock, In kind. You select in kind, because the gift is treated like cash, so the donor must provide you with the market value of that in kind gift.
If you receive an in kind gift that is not budgeted, that’s great if you can use it; however it is tracked differently, it would be tracked in the comments or other similar section of the donors profile in your database – but it does not appear in that donor profile as a gift. Having said this, you need to think about how to track these as they should receive acknowledgment as well, even though it is not budget relief.
5. DON’T CHASE THE MONEY
Many organizations are made aware of grants available that seem to fit the mission. If a prospective grant is not clearly related to your mission, but would be nice to have; give it some thought and read the fine print. Oftentimes there are reporting requirements attached to the grant and it generates more work for an already overworked staff.
Here is an example: An organization was made aware of a grant for Canopy’s that provide shade for playgrounds. For a school it sounds great, right? However the grant required the school to create a curriculum on “protecting children from the sun or the potential for skin cancer”. They also required one person to manage the program. This curriculum was not part of the school’s mission or current curriculum, nor did they have staff available to manage the program. If the school were to have accepted the grant it would be called, in my words, “chasing the money”.
Make sure that each grant written and received fits your mission and supports your established programs. You want all money received to be directly attached to what your budget requires in order to hit your year-end goal.