Want to know what every single nonprofit has in common? You all need donations to be successful. So whether you’re growing and need some foundational support or you’re enterprise-level and want to be reminded of some techniques that helped you skyrocket, this ultimate guide will cover donations from A to Z. There’s a little something for everyone!
A quick overview
Table of Contents
Donations come in all shapes and sizes, and there are just as many ways to ask for them, acknowledge them, and manage them. Whew! Sounds like a lot of work! But fear not, we’ve got you covered.
Nothing can make your nonprofit heart soar more than a major gift that obliterates your fundraising goals, and nothing can lead to more nonprofit sleepless nights than a paltry response to an enthusiastic outreach. You need donations, and people want to support good causes…but there can be an ocean between those two parties.
We’re here to help you sail across it.
CharityEngine has been helping nonprofits raise money for decades. And, if we do say so ourselves, we’re pretty good at it! Our clients, from the biggest (looking at you, Wounded Warrior Project) to the smallest (we see you, Merlin’s Magic Wand!), often ask us for advice on a range of donation topics. In this guide, we have compiled a resource for all nonprofits who have questions about donations or want advice on how to increase donations.
No matter what size nonprofit you are, we’ve got a client just like you…and this is the advice we give them. From startups to enterprise organizations, everyone needs donations to thrive, and we’re here to help you nail it.
In this guide, you’ll learn:
Different types of donations, including some you might not know exist
Creative ways to ask for donations…to get to a yes!
Our advice for great emails, from donations to receipts
Tips to make your donation form irresistible
What donors really want to see on those tax receipts (and a free template!)
How technology can make your life much easier
You’ll be armed with all the information and tools you need to invigorate your fundraising efforts! So let’s get started.
Chapter 1
Types of Donations
A donor goes to your website, clicks the “donate now” button, and it’s a donation. Right? Right. But it’s also a donation when someone volunteers at your event or when your friend says, “Sure, use my computer printer.” Every single donation can help your nonprofit!
This chapter will help you think outside the standard donation box and consider some previously untapped sources of donations.
Here’s a hint: replace the word “donation” with the word “support.” Maybe support looks like borrowed office space or a team of your friends staffing a 5K run for you. Maybe support looks like a matched gift or a sponsorship. It’s so much more than a monetary donation (though those are nice, too!). Let’s take a look at some different types of donations you might want to consider.
Matching Gifts
Matching gifts are, perhaps, the easiest way possible for nonprofits to raise money effortlessly. That’s because most companies have a philanthropic goal, and they meet it, in part, by matching charitable donations made by their employees.
While there are a few different ways to get matching gifts, we will shamelessly promote Double the Donation. CharityEngine has partnered with this organization for years to help our clients maximize their outreach efforts. How does it work? Any nonprofit can integrate with the match tool, which scans its database of companies in real-time as someone makes a donation. Once the software determines that the gift is eligible for a match, the donor is prompted to download and file the forms. There’s also an option for auto submission, in which the donor simply makes the gift, and the software does everything else until the matching gift is received. Matching gifts are an easy win for your nonprofit!
Now, we’re not getting kickbacks from Double the Donation. There are other options out there, but this is the one we know and we recommend to our clients.
Stock
Another source of funds for a nonprofit is stock. When an individual donates stock, they avoid the capital gains taxes they would have to pay if they sold it, and they will get a tax deduction for donating to a nonprofit.
You might think of stock donations only as gifts made posthumously or pledged by an elderly donor. Not so! Many tax-savvy donors have been turned on to the benefits of charitable gifts of stock, and it’s worth taking a look at your pool of donors – easy with a nonprofit CRM – and investigating whether or not this is a viable option and one you should promote.
Want to check it out? We like DonateStock. Similar to Double the Donation, DonateStock is an integration that allows donors to submit an online donation form. The software then routes the form to the donor’s broker, who transfers the stock to the nonprofit’s account. From there, you (the nonprofit) can choose to sell the stock and receive cash or receive the stock and add it to (or start!) an investment account for your organization.
A caveat: we are very, very good at helping nonprofits with donor management, engagement, and nonprofit fundraising. We are definitely not very, very good at tax advice. If matching gifts or stock are of interest, reach out to the organizations and then consult a tax professional.
In-Kind
When you think of in-kind donations for nonprofits, what comes to mind? For most of it, it’s tangible items, like computers, printers, office equipment, furniture (or, honestly, even office space).
But in the official world of in-kind donations, there are four types: loosely, tangible stuff, intangible stuff, time or services, and real estate. What they all have in common is that they are non-cash gifts.
Tangible in-kind donations include the things we’ve mentioned, and that’s just the beginning. Tangible donations can include snack bags for your food pantry, hygiene products for your shelter, or toys for kids in your care. It can include any kind of supplies that support your mission, up to and including office space, cars, or other heavy equipment.
Intangible donations include things like intellectual property, securities, or patents.
Time or services can include volunteers, consulting, transportation, legal services, free media, or air time.
Real estate would most likely be the gift of an office space, warehouse, land, or something similar.
Now, a note: if you want to, or have to, claim in-kind gifts on your financial statements, Generally Accepted Accounting Principles (GAAP) say they can be recognized under two conditions:
The services create or enhance non-financial assets.
The services require specialized skills, are provided by people possessing those skills, and your nonprofit would have to purchase the services if they weren’t donated.
If you have questions about this, don’t call us! That’s a job for (and responsibility of) your accountant. We'll stick to our day jobs.
Corporate Sponsorship
If you haven’t explored corporate sponsorship, it’s an important avenue of revenue for many nonprofits. And you’ll find that many companies that donate to nonprofits do so to fulfill budgetary guidelines. In other words, most large companies must donate to nonprofits…so why not yours?
Identify some companies that might share your mission or your neighborhood or that might have any reason to consider your nonprofit. And cast a wide net!
Think about the type of sponsorship you want. Is it a contribution to a capital campaign or an event? Is it signage, merchandise, or advertising?
It could also be a restaurant that caters your event or meeting, a spa that donates gift certificates to be raffled, or a grocery store that lets you set up space to collect groceries. Any for-profit entity can be a corporate sponsor.
Corporate sponsorship benefits the company because, frankly, it makes them look good. And it helps you by raising awareness of your mission (and maybe helping you attract new supporters), as well as boosting your credibility. It’s a win/win.
Recurring Gifts
The health of a nonprofit can often be measured by sustainers, or those donors counted on for monthly giving. We’ve talked about ways you can strengthen recurring giving, which comes down to creating a successful sustained giving program. Our largest sustainer client has more than 250,000 monthly donors that give an average of $6 million a month. We know that’s not likely for many of our clients, but it gives us a great resource to mine for tips. Here are some of the basics used by that giant client to grow a strong sustainer program:
Make it easy for donors to give. For example, add a button to your donation form asking every one-time donor if they’ll turn that donation into a monthly gift.
Use data to learn about your donors. You can identify potential sustainers and offer a personalized appeal that’s hard to resist.
Develop a nurture campaign to keep donors engaged and knowledgeable about what your nonprofit is doing.
Keep your eye on sustainer management. Don’t take them for granted, or they’ll disappear.
Use billing software that maximizes your revenue collection. Look for a system that offers helpful features, like an automatic credit card updater. (If you can’t find one, give us a shout. We’ve got a good one!)
Rely on donor analytics and other data points – like your collection rate for revenue – to ensure your program is as healthy as possible.
A healthy sustainer program is key to a healthy nonprofit, so take stock of yours and show it a little love if need be. It will pay dividends.
Major Gifts
Sometimes nonprofits focus on major gifts because of a capital campaign or as part of a year-end giving appeal. But we would argue that focusing on major gifts all the time can yield unexpectedly fruitful results.
A major gift is usually the byproduct, or result, of a strong relationship with a donor. Like planned giving, a donor can give or bequeath stock or cash gifts that are often one-time and larger than standard donations. Major gifts can help recession-proof your nonprofit!
There are a few tips to keep top of mind throughout the year that will help you identify and capitalize on major gift donors:
Use your CRM to find potential donors. For example, if the CEO of a Fortune 500 company supports your nonprofit personally, they're a great candidate for major gifts.
Get out in the community and talk to donors. What makes them support your nonprofit? Start to develop relationships with those who have shown loyalty.
Find different ways to get supporters involved, whether volunteering, touring your facilities, or just having lunch or coffee. Major gifts are all about building these relationships.
Make it easy to give big gifts. You can talk about the taxes donors will save or show them it’s easy to donate from an account.
Educate, educate, educate. Repeat yourself over and over as you explain how major gifts benefit both your nonprofit and the donors. Talk about the options you can support that will benefit the giver.
Ensure you have a stewardship program for those who you’ve identified as major donors. They are superstars in your fundraising world, and they need to know, on an ongoing basis, how much you appreciate them.
One other related-ish topic: Donor Advised Funds (DAF). This is an account donors can create that exists for the sole purpose of supporting nonprofits they care about. This type of gift can offer significant tax savings to donors.
Ask your accountant for the lowdown on some of these options, and then let your supporters know they exist. When they’ve proven loyalty and you make giving easy, you’re knocking obstacles down as fast as they pop up.
Chapter 2
How to Ask for Donations
Do you ever get asking fatigue? It stands to reason that when asking people for donations is your job, you can get weary.
And it would be so easy if there was some magical formula that would blow all other asking techniques out of the water, but that’s not the case. The old tried and true methods really do work! But when we dig into our clients’ stories, we can find some examples of twists that might get your mental cylinders firing with new ideas.
When we look at how to get donations for nonprofits, we start with the tools we think are most effective. They’re not flashy or new, but they're foundational to every one of our clients.
Lean on Email
Email is the foundation of many fundraising strategies. You want your email to cut through the clutter, so look at your subject line to ensure it compels recipients to open it. Personalize the greeting, then consider the content. We consider an ideal length to be about 25 lines. Those 25 lines will be most impactful if you tap into the psychology of giving, which leads to our creative tip: start with a story of one impact your organization has had. If donors hear that 30,000 people need their help, they will assume they can’t make a dent in the need. If their donation helps one child, veteran, etc., they’re more compelled to give.
And please don’t forget one of the most important emails you’ll send: the donor thank-you email! Those emails help you build the relationships you need for strong recurring donations.
Cultivate Major Gifts
We’ve already talked pretty extensively about major gifts, but they bear repeating as an excellent way to ask for donations. Mine your CRM’s data for potential major gift donors. Our tip here is to use a handy RFM calculator tool to score your donors based on recency, frequency, and monetary value. You can use our RFM calculator for free.
Consider Membership
This might sound a little unusual, but can you offer tiered levels of membership tied to benefits? If you can work dues into your fundraising plan, you have the ability to forecast with more precision, and you can create different stewardship plans for each significant pool of donors. The trick here is that the donors have to get something in return, which isn’t usually the case with standard donations. They can get branded t-shirts or other swag, or things like advocacy, communication, resources, access to events and forums, participation in calls or webinars, or even position papers.
Optimize Your Donation Form
You’re wondering why your donation form is mentioned in a chapter about asking for donations, right? Well, your donation form is central to asking for donations. Our clients hear a mantra on repeat: make it easy to give. This means creatively driving traffic to your donation form and showcasing a fabulous, user-friendly donation form. The best are short and simple and crystal clear. Use your colors and brand to keep it engaging, offer suggested giving levels or the option to make it a recurring donation, and keep form fields to a minimum. We will cover this in a little more detail in a later chapter.
In the meantime, here are some examples of client donation forms.
Here's BDSRA Foundation.
And here's an example from Food Bank for the Heartland.
Mine Your Data
We sell a CRM (and it’s a great one….), but this isn’t about our CRM. It’s about your CRM, regardless of your technology or vendor. Because all good CRMs will offer advanced reporting and analytics, and data gives you something you can act on. For example, you can slice and dice the data to see that 1,000 donors each give $10 a month. What if you ran a campaign targeting those donors and asked them to increase their donations by $2 a month? What if you extrapolated and realized you can ask all your donors the right questions, the right asks, to increase your fundraising? Segmenting your donors and personalizing your appeal will dramatically increase your chances for success.
You can also look at the data to find new donors. What if all your biggest donors are in one county? Go there, take them to lunch, and ask why they love your nonprofit. Then target the next county over with a campaign that capitalizes on the benefits felt by the first county. There’s no end to what your data can do for you as long as your reporting is accurate and your CRM is robust.
Focus on Your Sustainers
Sustainers are at risk of being a little taken for granted. They’re always there, faithfully plopping down their standard donation and never complaining about anything. THESE PEOPLE ARE GOLD! Sorry for shouting, but these are loyal, happy donors who love you. Love them back! Send them a little gift, pick up the phone and call them to express your gratitude, invite them to come to tour your facility and have lunch. Make sure they know how valued they are. This will be an important group when you want to ask for donations during a year-end campaign or other fundraising push.
Sell A Little Something
We touched on this a little with the idea of membership but think about selling something rather than asking for donations. You can sell engraved bricks for a walkway or benches to line a green space. You can sell t-shirts and coffee mugs and pens and pads, all conveniently branded with your nonprofit logo. You can sell experiences like lunch-n-learns. You can sell tickets to events and raffles. You can get as creative as you want! If you work with kids, have them create art and then raffle it off. Work with animals? Create a photo calendar showcasing your residents. The options are only limited by your imagination.
Get Into Their Phones
Mobile phones are ubiquitous and only getting smarter and more sophisticated. Leverage that and use your CRM to create a peer-to-peer campaign or use the mass text functionality. P2P campaigns can include walks or fun runs, or sales of popcorn or oranges, or they can just deputize your ambassadors to fundraise for you. We offer tips on how to run a great P2P campaign in this article. And mass texts are effective, too, because texts are opened at a rate of 98%, compared to a 25% open rate for email. Read this quick article for more on making mobile a key part of your fundraising plan.
And there you have it. Rocket science, no, but a handful of ideas you can use or build on to ask for donations in a way that will get some attention.
Chapter 3
Donation Email Best Practices
You do have to pay attention to the boring technical things…ideal length, email deliverability, spam scores, blah blah blah…but you can also push some messaging and creative limits with your donation emails.
Remember that there will be a human being reading your email, and you want to elicit a response. Rather than focusing on data that illustrates the plight you support, focus on one story.
You can always use the technique of “hooking” your audience, which is what happens in this UNICEF email.
CARE
You can also highlight the impact of donors, as CARE did with this email.
Even if you don’t have a huge design or photography budget, you can write emails that get attention. Here are five tips for knock-your-socks-off emails:
Personalize them as much as you can. So yes, address the person by name, but if you have any opportunity to ask after a sick spouse or college kid, or even to write a little note of congratulations if their hometown team won the Superbowl, you will be miles ahead of other emails they see. Hint: if you use your CRM to segment your donors, it’s very easy to personalize based on geography. Even a short “Hope you’re keeping warm!” to those in Minnesota shows you’re paying attention.
Use colors and gripping headlines to get attention. According to research, nonprofit emails are opened at a rate of about 26.6 percent. That’s on the higher side. But you’ll still have to hook your readers, so give thought to what they will see as soon as they click on the email.
Mark milestones with thank-you emails: can you show on-the-ground conditions before and after your nonprofit began its work? Can you highlight the number of meals you’ve served, the acres you’ve saved? This type of email is triple-purpose: it thanks your donors, brings them into your story, and also validates the great work you’ve been able to do with their support.
Jump on all the holidays. What better time to show your donors love than Valentine’s Day? Or salute your veterans and their families on…Flag Day? (And you thought I was going to say Memorial Day! Okay, that one too.) There’s no reason you can’t point out that August 17 is National Nonprofit Day! Ask a large group of unengaged contacts to donate $17 for that very occasion. Be creative and use any reason to celebrate or communicate.
Help supporters maximize their donations. If you partner with Double the Donation or just have a benefactor willing to match donations up to a certain point, let that be the theme of your email. And if that’s not an option, focus on granular impact. If $20 filled a backpack for a kid in need, how did that brand-new backpack make that child feel as they walked into school on the first day?
How Often Should You Send Donation Appeals?
Gosh, isn’t this the big question? You want to stay top of mind, but you don’t want to be a pain in the tushie.
Beware of experts yelling, “Two per month!” or “Six per week!” (okay, no one actually says that) because the question isn’t how many or when, it’s how many and when it’s right for your nonprofit and your audiences. Notice the plural…you have many audiences once you segment them. Look at one audience and develop good content that will resonate with them. Be certain you’re informing them about your mission, efforts, and impact. If you’ve asked them, via a signup form or a survey, how often they want to hear from you, that’s helpful.
You can also add a survey question to your emails, asking them to confirm their communication preferences.
For each segmented audience group, identify how often you can create compelling content and how often they want to receive it. And how often they need to receive it. Volunteers might need more frequent, detail-oriented emails than your major gifts folks.
Have you created a donor journey map? Once you do that - mapping out the stages of giving and determining which touchpoints are needed at each stage to compel action - you'll have the answer to how often you can send donation appeals to each donor persona you create.
Our friends at NextAfter have researched the best time of day to send fundraising emails. They’re nerdy in the best way, so if you want to nerd out with them, read their article. Like everything, they suggest you see what other nonprofits are doing and take a look at the habits of your donors to determine the best time for your nonprofit. The recommendation they offer is to send nonprofit emails right after lunch to stand out and maximize your chances of success.
Chapter 4
Optimizing Your Donation Form
Nonprofits work hard to get the word out, launch campaigns, spread awareness, entice new donors, invigorate current donors, and touch a few hearts along the way.
But the donation form? That’s where the pedal meets the metal. You can have off-the-charts good outreach that is sending millions of donors to your donation form. If it stinks, if they get frustrated or it’s unclear or just not easy to deal with, you could easily see donation form abandonment at about 50% to 70%.
Ouch.
So how can you make sure your millions of donors find the donation form of their dreams? Here are some tips for you.
Make sure the headline is simple and clear. You want people to know they’re in the right place.
Use photographs or other imagery to reinforce your mission and compel giving. Keep branding consistent.
The body copy – also simple and clear – should articulate the problem your nonprofit exists to solve, what the solutions are, and how a donation specifically helps you pursue the solution.
Offer suggested giving levels tied to impact. We recommend about four to six tiers and that you keep the descriptions short and easy to read. Figure out what your average donation is and build tiers around that. And then note what that equates to – does $50 cover the vet bill for an abandoned dog? Does $100 feed him for a month?
If a field is required, mark it clearly. Again, make giving easy! No one wants to back up to see what they missed.
And don’t make too many fields mandatory. Having rows upon rows to fill out can turn off the most committed donors. Name and email are pretty important, and donation and payment amount. Plus, of course, the box to check to make the gift a recurring donation. Beyond those, think about what you really need to know.
If it’s a campaign, consider a thermometer or power hour bar so donors can see the impact of their gift. Studies have shown that power hour bars can be 25% more effective than thermometers, so keep that in mind.
Make your “donate now” or “submit” button large and obvious.
End with a thank-you page. Reassure them the gift was securely processed and that they will receive an email for tax purposes.
Finally, test your form. Test it on a computer, a phone, and a tablet. Donate $5 and ensure the nonprofit receives the money and that the donor gets a thank-you page and an automated email for tax reasons.
And, because we’re into data, we will always recommend A/B testing. Create two different donation pages and change one thing, like the location of the donate button, and see which performs better when all other variables are equal. This way, you will eventually end up with the most successful version of your form.
The headline uses strong words to illustrate the impact of a donation.
The little girl is looking toward the donation form. She catches your eye, and then you naturally follow her gaze and the movement of the bubbles to see the donate box.
There are suggested donation amounts, but $15 is preselected, and the transaction fee is included in the total donation. This works to highlight the box donors can check to cover those fees.
We like the use of steps 1, 2, and 3, which underscore the speediness and simplicity of donating.
Rainforest Trust uses an effective technique, placing a lightbox to highlight its donation form. There's arresting imagery, the mission is included, it's easy to make the gift a recurring donation, and it's easy to dedicate the donation.
CharityEngine client BDSRA took advantage of the easy customization of our forms to hit a home run with their donation page. What do we like?
The clear mission statement on the left with a photo thanking donors
The dropdown box allows donors to choose whether their donation supports the greatest need or advocacy/research/support
The four options for gift frequency
Branding elements and colors throughout the form
And finally, Food Bank for the Heartland used CharityEngine's out-of-the-box forms module to create this effective form. This client uses a great photo, a simple yet powerful headline, and statistics to drive home the need. Then they qualify every monetary gift which drives up their fundraising success. Preselecting a donation that funds 1,000 meals highlights how important a donation is.
Chapter 5
All You Need to Know About Donation Receipts
While it’s lovely to think that philanthropic donations are driven by an abiding desire to help those in need, it’s not often the only reason someone decides to donate money. The silver lining is always that donated funds are exempt from taxes.
So let’s back up and go over the basics: if your nonprofit is compliant with all IRS regulations and has exempt status at the time of a donation, both the nonprofit and the donor can receive tax benefits. To document the transaction for your donor, your nonprofit must issue a receipt. You should issue a receipt immediately after the donation and issue a summary receipt at year end.
Please note that a good CRM will offer web forms that can be set to automatically acknowledge a donation and send a receipt. Technology will also make it easy to send individual or bulk receipts, like at the end of the year, and will be invaluable when it comes to tracking and monitoring receipts.
501(c)(3) Donation Receipt Template
We all know Uncle Sam can be a little finicky if paperwork isn’t just so, and donation receipts are a biggie. If the receipt doesn’t contain all the right information, the IRS can reject it, and then you have an annoyed donor who might not come back and try to give again.
Send a receipt for every donation you receive.
All receipts should have:
The name and address of your nonprofit
The tax ID number/EIN of your nonprofit
The name of the donor
The date of the contribution
The amount of the cash contribution
A description of non-cash contributions
A statement that no goods or services were received in return for the contribution, OR a good-faith estimate of the value of the goods or services you provided in return for the contribution
Or a statement that the goods and services consisted of intangible religious benefits, if that’s the case.
If your receipt is generated by your CRM, it might look something like this:
Many organizations will send an email with the information shown above and then attach a PDF of an official receipt.
If you would like to access a free donation receipt template, click here. As is always the case with our templates and workbooks, please go to file - > make a copy and then edit the template. Replace the CharityEngine logo with yours and insert your nonprofit’s information.
Chapter 6
Nonprofit Donor Management Software
We’ve alluded to the importance of a robust CRM, because just as a rising tide lifts all the ships in the harbor, solid, dependable technology can make everything about your job running a nonprofit easier.
If you’re reading this, you know that CharityEngine sells a nonprofit CRM trusted by the biggest names, the growing organizations, and everyone in between. So we know a thing or two about how much technology can do.
Does that mean we are your only option? Nope. The industry offers plenty of excellent CRM vendors to choose from. And different vendors will offer different prices, functionality, training, and support, so you must do the research and find the best fit. We offer a free, comprehensive guide with worksheets you can use to identify which features are the most important for your nonprofit.
Core functionality from a nonprofit CRM includes:
Email Marketing and Automation
Major Gifts
Membership Management
Online Forms and CMS
Payment Processing
Reporting and Analytics
Sustainer Management
These tools will allow you to manage your donors and engage with them to raise money. Additional modules some CRMs might offer take this a step further and feature functionality designed for specific types of outreach. These include tools for:
Advocacy
E-Commerce, or a Shopping Cart
Events and Auctions
Peer-to-Peer Fundraising
Text-to-Give Campaigns
We like to think of a nonprofit CRM as the foundational technology needed to effectively run a nonprofit. And for a smaller or growing nonprofit, an all-in-one system that offers a comprehensive suite of tools right out of the box is an excellent option.
But even if you’re a smaller nonprofit content with an all-in-one system, you might want to add functionality from third-party systems to your CRM. So it’s important to make sure you have all the tools you need when you’re starting out, but it’s equally important you ask about the CRM's ability to integrate with a range of third-party systems.
If you have more questions about donations, please reach out, and we will be happy to help. We understand that donations power your nonprofit, and maximizing them is paramount to your growth and success.
CharityEngine exists to partner with nonprofits and make it easier to manage donors, engage supporters, and raise more money. If you want to see our software in action, we’d love to show it to you. Happy fundraising!
Looking for more?
Download our Free Guide to Selecting a Nonprofit CRM
When it's time to think about switching CRMs. this guide is an invaluable tool you can use to discern which features are most important to your nonprofit and start comparing vendors. We even include two free worksheets!
