Chapter 4 Summary: Giving - Nonprofit Association of Washington

Summary...

Fundraising is a regulated activity, and the IRS has donor documentation requirements needed to claim a deduction as a charitable contribution.
Understand the differences in use, reporting, and accounting of funds with donor restrictions, funds without donor restrictions, and board-designated funds.
A formal commitment to make a specific contribution amount is a pledge. A donation given with the intent that the principal will be invested in perpetuity is an endowment, and as defined by the donor, the organization may use the earnings for general operations or specific purposes.
Typically goods or professional services, in-kind contributions are donations other than cash or pledges and are important for your organization to track.
For effective and timely information to reach individuals and institutions funding your organization’s work, alignment of fundraising and financial reporting is essential.

Is the nonprofit being thoughtful as you make decisions about the funds you apply for and accept?
When the organization requests and accepts funds with donor restrictions, are you considering any additional tracking that may be involved and how you will fulfill the requirements?

Review your nonprofit’s current process for gift acknowledgement. Use the following resources to check that your organization’s approach meets IRS regulations.
- National Council of Nonprofits – Gift Acknowledgements: Saying ‘Thank You’ to Donors
- IRS Charitable Contributions – Substantiating Charitable Contributions and Quid Pro Quo Contributions
Review Propel Nonprofits Managing Restricted Funds resource to gain a deeper understanding on funds with and without restrictions.
Explore the National Council of Nonprofits Gift Acceptance Policies resource to help you review your current policy for improvement areas or to get you started (samples included).