Ops Insights #018 Gift Processing and Finance
August 18, 2023 | Read Time: 5 minutes | Written by Jenny Kleintop
Welcome, so glad you are here and ready to build, grow, and accelerate your expertise. Today, we are diving into the intersection of gift processing and finance. Let's explore how to make the most of your fundraising CRM database without letting finance dictate your approach.
Sarah pulls a report of donors who gave last year to report out fundraising dollars. That report is also used to thank donors and send them an impact report of all the good the donors have done… a “because of you” message. Vanguard shows up as a donor and Sarah knows not to mail to Vanguard, so she excludes them.
Sarah’s team uses that list to do personal thank you calls to make sure donors are thanked in every way possible. A year later the fundraiser reads an article that Jenny gave $100,000 to another organization. The VP brings it up in a team meeting wondering why the team has not made any outreach efforts for Jenny’s giving of $2,000 the year before.
The response… “The gift is on Vanguard’s record as that is how the gift came in.” Now, we could say we didn’t pull soft credits on the report, but does that matter at this moment? Would the fundraiser be able to call up Jenny and say “Sorry, we meant to call to thank you, but we forgot to pull soft credits?”
Donor-Centric Gift Processing
Finance should not dictate how you enter gifts into your fundraising CRM database. If you had put the gift on Jenny’s record, Jenny would have been thanked and your organization could have been the one receiving the $100,000.
I had numerous conversations over the past few weeks about finance and gift processing. Here’s what I said:
A. Yes, we want a healthy and collaborative relationship with our finance peers.
B. Yes, we should communicate well and ensure we are on the same page (at least in the same chapter).
C. Yes, we should find another way if we are entering gifts based on finance.
D. Finance should not dictate how you enter gifts into your fundraising CRM database.
We are not always going to agree. And that is okay. Your CRM database is for fundraising purposes, not finance purposes. There are a few fields (like GL related fields such as funds/designation numbers and deposit dates) that need to be dictated by finance; But by no means should they tell you how to enter all aspects of donations into your fundraising system.
Finance needs to enter information on their end for accounting purposes, and that is appropriate. We need to enter information on our end for fundraising purposes, and that is appropriate. Neither is wrong, in fact, both are right. We just need to have a bridge that connects the two sides.
3 Tips to Align Your CRM for Fundraising Purposes
#1 Educate, in a respectful way, what a fundraising CRM database is designed for.
CRM stands for Constituent Relationship Management. It’s designed to do just that… build meaningful relationships with individuals and organizations to donate to our nonprofit organization.
What it does: Your CRM captures potential, existing, and new donors, and guides your fundraising goal of securing resources for your nonprofit.
Why it’s important: With millions of nonprofits worldwide, standing out and capturing potential donors' attention is vital. Your CRM allows you to focus on those interested in contributing and tracks vital data to nurture these relationships. Once a donation is made, showing donors their impact becomes paramount. A CRM setup for fundraising ensures personalized outreach and interactions so you get repeat donors.
How we fundraise: If we are trying to get Jenny to give to us, we would put Jenny (the potential donor) in the CRM as a constituent record, not Vanguard. All phone calls, meetings, and interactions leading up to the gift would be with Jenny, not with Vanguard. Jenny is for fundraising purposes whereas Vanguard is for finance purposes. Keep your focus on the donor – Jenny – not the financial gateway.
#2 When gift processing, choose Donor-Centricity over Finance-Centricity.
Always prioritize donors in your gift processing strategy. When you extract lists for thank you calls, emails, or other outreach efforts, remember, it's Jenny's name you want on those lists, not Vanguard's.
Put donors first: For example, if Jenny contributes $1,000 through her Donor Advised Fund, even though Vanguard handles the transaction, ensure her donation is attributed to her. You can add an attribute noting "Name on Check" for reconciliation purposes.
#3 Bridging Finance and Fundraising: An Effective Partnership
Creating a bridge between finance and fundraising ensures effective operations without compromising donor relationships.
Collaboration, not conflict: Finance and fundraising both have legitimate roles. While finance ensures accurate accounting, fundraising cultivates meaningful donor interactions. Strive for harmony, not discord.
Automate the bridge: Understand what finance requires and use an automated process to translate CRM data into formats suitable for finance needs.
Remember, donors matter: No matter how complex gift processing becomes, always remember the heart of your organization: the donors.
Taking Action
Ready to move toward Donor-Centric gift processing? Here are your next steps:
1. Review and Adapt: Don't hesitate to reshape your gift processing strategy to fit the evolving landscape. Stay current, just like the rise of PayPal and online giving platforms.
2. Recommend and Connect: If in doubt, reach out to peers in similar organizations. Learning from their practices can guide your decisions. You can also gather best practices in the industry (aasp is a good place to get best practice documents if you need them).
3. Unite Your Team: Gather your team for a conversation, ensuring everyone understands the changes and their importance.
4. Engage Finance: Collaborate with your finance team, seeking alignment between their needs and donor-centric gift processing.
5. Plan and Move Forward: Develop an implementation plan, instilling confidence in your approach.
Remember, you are equipped with the knowledge to enhance donor relationships through strategic gift processing. Stay confident, use your voice, and carry on.
You’ve got this.
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