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Donations

Why You Shouldn’t Be Afraid to Ask for In-Kind Donations

By | Donations, Nonprofit | No Comments

In-kind donations refer to products or services donated directly to a nonprofit organization. These are tangible gifts given to your organization. Some nonprofits dislike in-kind donations because they feel it limits their flexibility to find the exact items they need. They don’t want to turn away gifts, but when the gifts aren’t appropriate, it’s hard to get excited about an in-kind offering.

Instead of fearing in-kind gifts or shunning them, how about embracing them? With so many news stories today about operating budgets misused at both for-profit and nonprofit organizations, many people prefer to give in-kind, rather than cash donations. Figure out how to leverage in-kind donations rather than avoid them, and you’ll be able to meet your organization’s goals while making people feel good about their contribution.

Be Specific About Your Needs

The first step to run an in-kind donation event is to identify what you need. Be very specific about the items. Don’t be afraid to create and publicize a list with brands, sizes, colors, and specifics about the gifts needed.

A local animal shelter runs two in-kind gift events each year. They provide lists of items that can be purchased inexpensively at discount stores that will be used at the shelter.

Some items, such as bleach, mops, sponges, and pails, are listed as generic items. But they also list brands of cat litter, dog and puppy food, and cat and kitten food that they prefer. Although they won’t turn away gifts of other kinds of pet food, these specific brands are used when veterinarians prescribe specials diets to animals that have been abused. By stating this in their flyer, the shelter gently educates the public, asks clearly for what they need, and receives plenty of donations. They stage in-kind events in the spring at the YMCA and, in the fall, at the local car dealership and hotel chain. Special “meet and greet” days featuring adoptable pets and volunteers give the events a personal feeling.

Best of all, because the events are for a nonprofit, the local radio station loves to cover them, giving both the nonprofit and their sponsoring organizations a lot of free publicity. It’s a great way to stage an in-kind event that helps the shelter, generates publicity, and raises awareness of the local charity.

Think Big

You don’t have to think small when it comes to in-kind gifts, either. You can list large items such as vehicles, office furniture, and computers as part of an in-kind gift strategy. Using the animal shelter example, be specific about your needs. If you do receive items that aren’t on the list, see if you can use them. If you can’t, thank the donor anyway, and find a way to dispose of them.

Establish Accounting Policies

Don’t forget to establish accounting policies around in-kind donations. You must account for in-kind contributions; they aren’t freebies. Donations above $250 must be recognized with a receipt but giving a receipt with the appropriate and necessary information for the donor’s tax records is appreciated.

An accounting policy for in-kind donations should include guidelines to ensure that all donations are:

  • Documented with a receipt, and a copy of the receipt kept on file
  • Evaluated and given an appropriate dollar value
  • Treated consistently
  • Verified in the accounting records

The IRS features a resource center called Tax Information for Contributors which includes many useful documents to guide you as you track contributions.

When your nonprofit has many needs, it can be difficult to think beyond an immediate cash influx via donations. Sometimes, however, people want to give tangible goods. An in-kind campaign helps you achieve your nonprofit goals while encouraging the public to support your organization.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Giving Tuesday Is Coming! Here’s How to Prepare for a Successful Giving Tuesday

By | Donations | No Comments

Giving Tuesday, often referred to by its hashtag #givingtuesday, occurs the first Tuesday after the American Thanksgiving holiday (and for those in other countries, American Thanksgiving is always the third Thursday in November).

Started in 2012 by the United Nations Foundation and the New York City 92nd Street Y, Giving Tuesday began as a grassroots effort or “hashtag movement” to counteract the gross commercialism that often occurs on Black Friday. It’s not uncommon in the United States for eager Christmas shoppers to push, shove, and generally behave  rudely in their quest for cheap goods on the first official shopping day of Christmas. Sad, but true.

These charities began the Giving Tuesday movement in an effort to focus people on the more positive message of giving back to their communities. Instead of crass commercialism, the emphasis is on charitable giving. And that’s good news for your organization if you can leverage the momentum of Giving Tuesday.

In 2017, the last year for which figures are available, approximately $274 million was raised in total, with $45 million raised through Facebook donations.

Your nonprofit can ride the surge of donations generated through the hashtag campaign by ensuring an easy way for people to donate. A little preparation now may result in a surprise on #givingtuesday.

Revamp Your Donation Page

Don’t wait until the night before Giving Tuesday to update your donation page. Take the time now to make sure it’s as enticing as possible.

  1. Update your branding. If you’re using PayPal or a similar payment service, customize your checkout pages and thank you pages. Add your nonprofit’s logo, slogan, URL and any other information to remind donors that their donation is making a difference.
  2. Remind donors of your impact. Another great use of the donation page is to remind donors of the impact that your organization makes on the constituents you serve. An animal nonprofit may wish to include a link or stories, photos and other media showcasing their work with animals their charity helps. The best time to remind donors of the impact that their generosity makes is at the time they’re giving. It reinforce their feelings of good will and strengthens the bond between your organization and the donor.
  3. Add monthly giving options. Sure, a one-time donation is great, but what about monthly giving options? You may be able to add monthly giving options so that donors can choose to give in regular increments rather than in one lump sum.
  4. Make it friendly: Make sure that your page can be easily read by multiple devices including desktops, laptops, tablets and mobile phones. Responsinator is a free tool that allows you to see how your webpages look on mobile devices.

Don’t Be a Stranger

One of the best ways to leverage your participation in #givingtuesday is by letting your constituents know ahead of time. Start several weeks before the promotion to let your donors know that your nonprofit is participating in the event. As the date draws near, send more frequently emails. A good sequence is a thank you message on Thanksgiving; email reminders on Sunday and Monday; and a big announcement email on Giving Tuesday.

Incorporate Social Media

Giving Tuesday is a social media-driven campaign; be sure you’re actively participating on social media in the time period leading up to the actual day. Update your social media banners and set up automated messages using tools like Buffer or Hootsuite to make it even easier to keep a steady stream of messages flowing to your constituents.

Remember to use the hashtag #givingtuesday on all posts related to the big donation day. People searching under that hashtag can see your posts; it will show up in the results for the hashtag search. That’s another great way to reach potential donors!

Giving Tuesday, One Great Day Among 365 Other Donation Opportunities

Giving Tuesday is a great event – but so are the remaining 364 days in the year. Every day is an opportunity to connect with donors and raise awareness for your nonprofit. In fact, many of these tips can (and should) be implemented year-round as part of your fundraising and marketing activities.  With a little planning and follow-through, you can expand upon the idea of “giving Tuesday.”

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Choosing the Right Payment Processing Service to Accept Online Donations

By | Budget, Cryptocurrency, Donations, Fiscal, Fundraising, Nonprofit | No Comments

Most nonprofits accept donations through their website. If you don’t, you are missing out on many potential donations. Donors motivated to respond to an online solicitation, email, or news articles about the cause your work supports may wish to donate immediately rather than write a paper check and drop it in the mail. Accepting online donations provides a simple, easy pathway for people to give when they are able and motivated to do so.

Yet with so many choices of online payment processors, credit card payment gateways, bank payment systems, third party payment processors, and now even cryptocurrencies, what’s a nonprofit to do?

We’ve tried to make it as easy as possible for you to understand the many possible methods of accepting payments and help you sort through both the pros and cons of each. When you’re ready to proceed, if you still have questions, please call Welter Consulting at 206-605-3113. We are happy to help.

How Online Payment Systems Work

Nearly everyone reading this has purchased something online, so you should be familiar with how online payments work from the consumer end. The consumer end is called the “front end” or the “interface.” The shopping cart system is fairly straightforward, with variations to allow for different goods or services purchased. An online clothing retailer may have a spot for discount or coupon codes; a nonprofit may have a spot to share a message if the donation is in honor of someone.

Behind the interface or shopping cart  is a complex network of information shared by multiple parties to complete a credit card transaction online.

Encryption

Encryption means coding the information sent over the internet so that it cannot be ready unless someone has the key to decode it. After clicking “pay” or “order”, your credit card information is encrypted for security purposes. It then goes to an aggregator or a bank processor.

Aggregators

 An aggregator is a company that processes payments. As the name implies, aggregators collect payments from multiple entities such as merchants, nonprofits, and others to accept credit card payments and bank transfers without the need to set up a special merchant account. The aggregator makes an agreement with the merchant bank and batches multiple companies under their account for processing. In return, they assume a greater risk since they are dealing with multiple entities and may charge more for their services.

Acquirer (Bank)

 Merchant accounts are created by a merchant bank (called an acquirer). The bank settles and deposits the funds from the transaction into your bank account. They are responsible for ensuring that payment is rendered to your account once the transaction is approved.

Cryptocurrency Wallets

 Yet a third payment method available to nonprofits today is cryptocurrency. Bitcoin, Ether, LiteCoin and many other alternative payment methods are all potential forms of donation. Accepting donations in such coins is a slightly different process than accepting direct payments.

Cryptocurrencies are sent via the blockchain. An exchange facilitates sending and receiving cryptocurrencies. Senders can transmit their currency to the receiver’s wallet, a unique address that can be shared on your site to accept payments.

To set up a wallet, you’ll need to create an account with an exchange and submit information to pass KYC (know your customer). Cryptocurrencies received through the exchange can be changed into dollars or other government-backed currencies and deposited into your bank account. The exchange subtracts a fee for the transfer, which varies according to the exchange.

Pros and Cons of Each Payment Method

There is no clear-cut, single answer about which payment method is best for a nonprofit. You’ll need to weigh each factor in your decision.

Aggregators

 Pros:

  • Easier and faster to set up an account since aggregators tend to accept all types of businesses including new nonprofits.
  • Aggregators tend to be on the alert for fraud even more readily than banks because they accept riskier clients.
  • Better for small nonprofits with lower volume of monthly transactions.

Cons:

  • Charge a higher fee than banks.
  • Less customer support and service.

Merchant Banks

Pros:

  • Better for established nonprofits.
  • Better if you have higher volume of monthly transactions.
  • Better customer service than aggregators.

Cons:

  • Higher fees.
  • Pickier about who they accept, so if your nonprofit is new, banks may turn you away.
  • Tends to be better for high or steady volume, so if you can’t predict donation volume yet, may be costly.

Cryptocurrency Exchanges

 Pros:

  • Adds a new donation method to your nonprofit.
  • High appeal to young donors – millennials, Generation Z, etc.
  • Extremely high level of security through the blockchain.
  • Transactions cannot be reversed by the donor.
  • Transparency on both ends – donor can see that you received the money through blockchain confirmation.

Cons:

  • Fees can be high on some exchanges.
  • Nonprofit must pass KYC.

Clearly, there’s no “one size fits all” when it comes to processing donations. Thankfully, there are plenty of choices, and you can use what suits your nonprofit the best. Sorting through your choices may be the most complex part of the process, but if you need help, please contact us.

 

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.