Pointers for Efficiently Keeping Track of the Donations You Bring In
Every smart business owner knows that the arduous and tedious – yet crucial – chore of consistently keeping the books straight is the backbone of any enterprise. For non-profits such as Lawyers to the Rescue, however, there is even more at stake. For charities, failing to keep track of what’s coming in and what’s going out could lead to errors that frighten off donors or, even worse, attract attention from the IRS. Even slight errors in reporting – intentional or not – can trigger an audit or threaten your charity’s tax-exempt status.
It is imperative that your charity’s lifeblood – donations – are tracked and cataloged accurately every time. Follow this guide to keeping track of your donations.
Donations keep your charity going – track them meticulously.
Free cloud-based software such as Mint and Outright have been used for years by sole proprietors as well as by individuals to maintain their personal and household finances. But there are probably many things about budget apps that you’re not aware of (check out “4 Things You Didn’t Know a Budget App Could Do” for more details).
These features can help charities keep their donations straight. Not only can these free, entry-level programs be accessed and used from any computer, phone or tablet with nothing more than a password, but they can catalog cash donations, create categories for different classes of donors, set reminders and provide email receipts.
Donation Management Software
Depending on the size or scope of your charity, you may need industry-specific software dedicated just to tracking donations. There are literally dozens – if not hundreds – of programs designed to making tracking donations easier. Whichever one you choose, it should provide an app – or even a text messaging system – for not only you, but also for your donors. If they can donate through the comfort and security of their own phone or computer without going through an external system, they’ll be provided with both peace of mind and simplicity.
Use Common Business Sense
This seems so obvious that it should be in the goes-without-saying category, but always categorize, calculate and record every donation you receive right away. Like invoicing for small business owners, tracking donations is something that can turn into a magnet for mistakes if not done while it’s still fresh in your mind. Buildup leads to haste and can breed errors that come from entering data when you’re overwhelmed. Get the software you need, and no more.
Give your donors an app they can use to donate whenever or wherever they want.
You owe it to both your donors and the people your charity was designed to help to be unforgivably meticulous when tracking donations. Taking money from generous people and directing it to help those in need is the core principle of any non-profit’s existence. Your organizing principle, therefore, must be a clear, consistent and transparent method of accounting for every dollar. Luckily, software exists that makes this a very doable task. Use it – and use basic business common sense – to make your charity one worth giving to.
Andrew Lisa is a freelance writer living in Los Angeles. He writes about small business management and the non-profit sector.