Why not to create a do-it-yourself donation tracking and receipting system

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Many small charities and churches start out tracking their donors and donations, and creating their charitable receipts, using a homegrown system. Most often, in my experience, this is built with Microsoft Excel and Word, but sometimes Access or another simple database program is also used. This article discusses why you might not want to do so, based on a number of years of hearing from users who have switched from such systems to professional donation-tracking programs.

When your database is not a database

First, Excel is not a database program. You are probably going to end up entering a donor’s name (and perhaps address) as you record each donation, thus having multiple copies (and quite possibly multiple versions) of that information when donors give multiple donations. That’s both too much typing and a maintenance nightmare - what happens when the donor’s name or address changes, and you have to change it in multiple places?

Some very knowledgeable Excel users may be able to set up separate sheets in a spreadsheet for the donor information and the donation information, but maintaining the links between them can be error-prone and complex.

If you use Access, a relatively serious database program, you can certainly set up separate database tables for things like donors and donations, and link them together. The largest problem here (which also applies to sophisticated Excel setups) is that this is usually done by someone who isn’t a professional programmer, and doesn’t put the time into making it both user-friendly and “bullet-proof” (i.e. unable to mess up your data).

Data needs a good designer

The first program I ever used for donation tracking was one called ChurchMouse, which is no longer available. Despite the fact that it was a commercial program, I discovered that it had glaring problems. For instance, you could delete a donor who had made donations, thus leaving those donations unattributed to any donor. (In computer science language, this is known as a lack of “referential integrity”.) This sort of problem is likely to occur if a program is not very carefully designed by a professional.

Because homegrown systems are usually both created and used by the same person, when that person leaves the organization, or finishes his or her role (e.g. as treasurer), it is often extremely difficult for someone else to pick up using the system, or even to find someone else willing to try doing so. The creator of the system knew just what to do, knew its quirks, and how to make it “go through the hoops” as required. That knowledge may be much more complex to pass on to someone else because the program wasn’t designed to be user-friendly, just to work. And how many homegrown systems have online help or any form of documentation at all?

Keeping up with receipting requirements

With regard to the creation of the charitable receipts, in homegrown systems this is usually done through mail-merge to Word. Although that works, setting it up is somewhat complicated. Also, especially for churches where donors give regularly, and only one receipt is given at year-end, I do not believe it is possible to create a mail-merged receipt using Word that includes both the total for the receipt, and detail lines showing each individual donation. Donors really like seeing those details.

Another concern is keeping up with the Canada Revenue Agency’s (CRA) regulations on receipting. Their request to add the CRA name and web address to receipts a few years ago was quite easy to satisfy, but the more recent change to handle split receipting poses considerably greater difficulties that might be impossible to overcome if you have limited programming skills and are using a homegrown system created by someone else who is not readily available.

Going the commercial route

A good commercial system, on the other hand, should resolve almost all of these problems. It will have been designed with referential integrity in mind (e.g. no double-entry of data, no deleting donors who have donations, etc.). It ought to have thorough online help, technical support, and probably a user support forum for sharing tips, tricks and questions. And it will be user-friendly. Finally, it will keep up with CRA requirements, because its creators will be proactively following what the CRA is asking for, and updating the program accordingly. And if they miss something, their users will let them know, assuming they have a sufficient number of Canadian users of their program.

Commercial programs are available in a wide range of prices, from under $100 for smallish charities and churches, to the several-hundred dollar range, to thousands of dollars for serious fundraising programs. In many cases, the complexity increases with the number of features, which is often (but not always!) also related to the cost.

You can research the range of commercial donation-tracking programs through general web searching. Many of these programs have “try before you buy” options to allow you to see how well they fit your needs.

Dan Cooperstock is the author of DONATION, a program to track donors and donations and issue charitable receipts, with over 4,000 registered users in charities and churches in Canada and the USA. You can find it on the web at www.software4nonprofits.com.

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