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3 Bookkeeping Strategies to Maximize Sustained Giving

The need to maximize sustained giving is becoming more important as nonprofits see increased revenue from monthly gifts. But to get donors excited about giving regularly and to make the most of these donations, your organization must responsibly steward its resources.  

With effective bookkeeping strategies, nonprofits can collect, report, and use sustained giving to fulfill their missions and enhance their impact. In this guide, we’ll review three bookkeeping strategies your nonprofit can use and explain how you can add recurring donations to your fundraising strategy. 

1. Stick to a Budget 

For donors, giving begins with an affinity for a nonprofit cause and continues with illustrated impact, meaning supporters must be confident that their gifts will be used for your mission. As a result, they’ll be more likely to commit to sustained giving. 

Responsibly managing your funding is a surefire way to demonstrate that your organization is using all donations to power change. Plus, you’ll be able to safeguard your nonprofit’s finances against directionless spending. Creating and following a budget will not only allow you to wisely allocate recurring gifts, but it will also accomplish the following financial goals: 

  • Compliance: The IRS requires nonprofits to report detailed and accurate financial information. A predetermined budget can supplement your nonprofit’s records, helping you comply with nonprofit regulations and maintain your tax-exempt status.  

  • Organized spending: With an established plan for how funding should be spent, your nonprofit can more efficiently allocate its resources to cover operating expenses, power its programs and projects, and ultimately fulfill its mission. 

  • Transparency: Whether explaining your budgetary decisions to donors or your board, transparent budgeting secures the trust of your constituents and improves your nonprofit’s reputation. 

Clearly define your nonprofit’s expenses, taking into account variable and fixed costs. Be sure to categorize your spending according to overhead costs or program expenses, so you have a clear idea of what is used to keep your nonprofit running and what more is needed to fund your mission. 

Also, carefully note any restricted funds within your budget. Donors may designate their recurring gifts to a specific fund, and it’s your responsibility to ensure you respect donors’ wishes for their generous contributions.  

2. Assess Your Impact 

In the nonprofit world, data-driven decisions should always power marketing and fundraising campaigns. Details about your donors and their interactions with your organization can be used to better appeal to supporters and raise more. Most importantly, you can gather this data from your nonprofit’s books. 

According to Foundation Group’s nonprofit bookkeeping guide, the financial statements created from your records provide an overview of your nonprofit’s financial health. Equipped with this insight, you can assess your impact to determine how sustained gifts are obtained and used. Then, adjust your approach accordingly to obtain more or use these gifts more efficiently. 

For example, you can maximize sustained giving using the information from your financial records in the following ways: 

  • Tailor your fundraising asks: Knowing the details of your revenue inflow can help you target your appeals to raise more. For example, an influx of sustained gifts in January could signal a trend in committing to charitable giving at the start of a new year. As a result, you could craft a fundraising campaign around New Year’s resolutions.  

  • Evaluate your expenditures: The total amount raised from sustained gifts holds implications for your nonprofit’s ability to cover its costs and fund its projects. Evaluate your expenses to determine whether you need to raise more from sustained giving or allocate sustained gifts differently. 

  • Thank donors: According to Fundraising Letters’s donor recognition guide, communicating the impact of donors’ gifts is essential to reinforce their connection to your cause. In your thank-you messages, provide a comprehensive overview of recurring gifts and how they’re used. This way, donors will understand what they helped to accomplish and will be more likely to give again to deepen their impact. 

An overview of your nonprofit’s financial health can also help attract new supporters. Prospective donors will be more willing to get involved when they see tangible examples of what other’s repeated donations have accomplished, such as supporting a specific program or helping to staff your organization. To grab your prospects’ attention, you might highlight a loyal donor on your donation page to illustrate sustained giving in action.  

3. Leverage Bookkeeping Resources 

Bookkeeping is a full-time job, and if your nonprofit’s leaders are busy focusing their efforts on sustained giving, it’s easy for this task to fall by the wayside. The best way to ensure your organization maintains accurate records is to leverage bookkeeping resources, such as professional expertise or accounting software. 

Entrusting your organization’s bookkeeping to a professional can save your team time and stress. The right nonprofit consultant will handle the following tasks: 

The roles of a nonprofit bookkeeper, which are detailed in the text below 

  • Record transactions 

  • Reconcile bank accounts 

  • Provide financial statements 

  • Assist with 1099 preparation 

  • Give advice and counsel as needed 

Additionally, your team can utilize the reporting features of accounting tools to gain meaningful insights into bookkeeping data. A digital database helps your nonprofit ensure all information is up-to-date, accurate, and input correctly. Plus, the right software will integrate with your other solutions to keep your fundraising, donor, and bookkeeping data all in the same place. 

When it comes to managing recurring gifts, your nonprofit can’t afford to make bookkeeping less of a priority. For example, you’ll need accurate and complete financial records to file Form 990. Otherwise, you could risk having your 501(c)(3) status revoked. If this is something you’re unfamiliar with or don’t have the time to do, outsourcing the task to a professional is the best route to go. 

In addition to the tips listed above, be sure to remain as transparent as possible with your nonprofit’s finances. Letting donors know exactly how their donations will be used greatly encourages them to keep giving. Plus, adding specific purposes of given donation amounts on your donation page (i.e. $50 will feed five animals at your shelter for one month) can illustrate the tangible impact between a recurring donation and the ongoing impact it will have. 

About the Author

Greg is the founder and CEO of Foundation Group, one of the nation's top providers of tax and compliance services to nonprofits. Greg and his team have worked with tens of thousands of nonprofits for over 25 years, assisting them with formation of new charities, plus tax, bookkeeping, and compliance services. He is credentialed as an Enrolled Agent, the highest designation of tax specialist recognized by the Internal Revenue Service. Based in Nashville, Tennessee, Greg and company work with charities and nonprofits all across the country and worldwide.

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