Gift processing is a challenge for many nonprofits. It takes time to enter gifts into your donor database or customer relationship management (CRM) system. It requires each gift type to be coded correctly. Each gift must have the right General Ledger (GL) code applied to it. Tax receipts must be calculated accurately. Then, the fundraising data must be prepared properly for import into your accounting system.
For nonprofits with a high volume of gifts, a large number of GL codes, stringent tax and auditing compliance needs, and/or other complicated requirements, processing gifts can become an even bigger hurdle. In such cases, out-of-the box gift processing functionality in many donor databases or CRM systems simply cannot handle the complexities. A customized solution is often the answer.
Customized gift processing in the real world
Here’s a case in point: Our team at Heller Consulting was helping a large Canadian charitable organization implement a new CRM system. As part of the project, the organization had two major gift processing needs:
They regularly receive a high volume of small gifts (from fundraising events and annual giving campaigns) and need to enter them quickly and efficiently.
They need to be able to attribute gifts to multiple GL codes consisting of combinations of five segments.
After ruling out batch gift entry products and other out-of-the-box approaches due to the complexities of the organization’s GL coding and tax receipting requirements, we worked closely with the organization to build a custom solution within their new CRM product that meets their unique needs. The solution includes:
Customized GL segment association — When setting up a new fundraising campaign, admins can easily add up to five default segments that represent the most common gift coding for a specific campaign, as well as additional common variations.
Rapid gift entry — A rapid gift entry screen that automatically defaults GL coding based on the campaign, and also allows gift entry staff to quickly override the defaults from a short, dynamic list of relevant categories for that specific campaign, instead of having to scroll through a picklist of thousands of possible options.
Required data collection — Working with fundraising and finance staff, we identified the most common gift processing workflows. This allowed us to identify and set up required information for various gift types and set up the solution to automatically and dynamically require completion of specific fields on the gift entry screen — which helps to confirm that the required information is collected for each gift for tax, accounting, and reporting purposes.
Gift data preparation for financial reconciliation — The ability to easily pull gift data out of the organization’s CRM system and into their separate finance system for accounting purposes.
Easily manage and track adjustments — The solution automatically tracks any adjustments to gifts, such as a bounced check, a refunded registration fee, and even data entry errors. It then generates the appropriate data to push adjustment transactions to the finance system and make required updates to tax receipts in a highly controlled manner that meet compliance requirements.
The entire solution was designed so the organization can easily make changes to default GL segments, required data entry field options, gift entry workflows, and data exports as the organization evolves.
Tips for getting a gift processing solution that meets your organization’s needs
Based on our work on these types of custom gift processing solutions, we’ve learned some things that can help any nonprofit that’s ready to implement a similar solution. Here are some key tips:
Bring all stakeholders to the table. Remember that gift processing requires more than just the gift entry staff. It also requires fundraising campaign managers and the finance team. Make sure that everyone involved has input so that the solution encompasses the entire process — from gift entry to financial reconciliation.
Know what outputs you need from your gift data. Make sure you have a list of what ultimately needs to happen with your gift data, such as tax receipting and financial reconciliation. Having this information at the beginning of your project will help you design a solution that that ensures all of the gift processing steps in your workflow will be able to generate the outputs you need.
Consider your potential common data errors. Think about the unusual aspects of your gift processing that might lead to critical data entry errors that you want to prevent. For example, if you have tens of thousands of GL codes, it’s likely that gift entry staff will make errors as they try to allocate each gift to the correct code. Make a list of these key exceptions and associated possible data mistakes at the beginning of your project so your solution can help eliminate the opportunity to make data errors in the first place.
Do you need a customized solution to meet your organization’s complex needs?
The Heller Consulting team has deep experience and expertise creating customized solutions for nonprofits with complex requirements. If your organization’s technology cannot support your needs out-of-the-box, we can help. Contact us to learn more.
Bobby has been working in the nonprofit world for 12 years, focusing on food access and community building projects. He served in AmeriCorps as a Vista, worked as a volunteer coordinator, program manager, and even spent a couple years growing... Read More
Catherine has served the nonprofit sector for over 20 years, defining and guiding the strategic pathway for technology, digital transformation, marketing, and fundraising at the Canadian Cancer Society and others. She is skilled at understanding and addressing the human concerns... Read More