How to Create an Excel Database for Your Charitable Contributions
Nonprofits, like any organization, know that keeping track of their finances is fundamental to ensuring they are successful. They want to know they are on solid ground before they start spending money or taking on new projects, and tracking their donors’ charitable contributions - most charities’ main source of income - can help to bring about this level of stability and insight.
When it comes to recording all instances of charitable giving, it is important to note as much as possible, including who gave what, when they gave it, and why they gave it. This information can help your organization identify from whom it derives the most support, and consequently, what demographic it has yet to fully tap into. The patterns that are illuminated from this data will allow you to formulate the best fundraising techniques possible so you can actualize highly successful campaigns in the future.
There are two main ways to track your charitable contributions - an Excel template, or nonprofit database software. In this article, we will cover both of them, as well as:
- What is a Charitable Contributions Database?
- What Information Should You Track?
- How to Track Charitable Contributions
- Final Thoughts
What is a Charitable Contributions Database?
First things first - a charitable contribution is a donation made to your nonprofit. It can take on many forms, including:
Time (i.e., through volunteering)
Money (cash, debit, credit, or check donations)
Goods, Services, or Expertise - also known as "In-Kind" donations
Now, a charitable contributions database is a tool that allows you to store and organize all relevant information related to the donations made to your organization, especially that which concerns your donors. It can be used to track everything from who a donor is, to what they have given, how frequently they have done so, and even why they might (i.e., what might compel them to) give again. Your organization can choose how technical, or even somewhat personal this information is, provided it respects your donors’ privacy. An example of some personal information you might include in your database is your donors’ hobbies.
Matthew is ready to learn about the importance of keeping a charitable contributions database!
The database is usually updated automatically when donations are made, but data can be added manually by staff members if necessary (as is often the case with in-person cash donations, and non-technical evaluations; although, your software might automatically fill some of that in for you if you involve such questions in a linked questionnaire). The information stored in a charitable contributions database can help you personalize your donor letters and solicitations, as well as help you determine what kinds of fundraising campaigns to launch, particularly if you notice your supporters have taken a special interest in some type of activity.
So why do charitable contributions need to be tracked and recorded?
501(c)3 Donation Rules
First things first: tracking charitable donations is generally required by the IRS. In order to obtain tax-exempt status, nonprofits must be transparent about their finances, which means disclosing where all of their donations have come from, as well as how many and what type of donations they have received. Your organization must communicate this information in its annual 990 form to ensure it remains in compliance.
Notably, your nonprofit needs to issue tax receipts for charitable contributions anyway, so you may as well track and record them at the same time.
Budgeting for Projects
Tracking charitable donations gives you a deeper understanding of your nonprofit's finances. Knowing exactly how much money typically comes in through charitable contributions in any given time period allows you to better plan for the future and allocate resources accordingly. When you have a better idea of what you can spend, you can be more strategic about how to pull off the best fundraisers within your financial limits.
Pro Tip: The IRS generally only requires that a tax receipt be issued for donations over $250, but there is no harm in doing so for all donations. In fact, for record-keeping purposes and to incentivize donations, you should always send your donors receipts!
What Information Should You Track?
When giving shape to the data surrounding donations made to your nonprofit, there are a few pieces of information you should always take note of. These include:
Donor contact info, especially the donor's name and address. You may also want to record their phone number or email address if they donated online.
Donation type: As mentioned, donations come in many forms. Recording each and every one of them means no pertinent information gets left out, and therefore no trends in donor data will be missed.
Date and time of donation: This may seem like an obvious one, but recording the date and time of every contribution is essential for accounting purposes. These details can also serve as a projection tool for the budgeting season. You can take a look at your donation spreadsheets from the past years and see exactly which chronologies (as well which corresponding fundraising campaigns) have been the most fruitful.
How to Track Charitable Contributions
Tracking charitable donations can be a bit of a pain. It is easy to get confused, or lose track of where you are in the process, or forget to record any recent non-digital contributions made to your organization.
Here are a few tips to help you make sure you stay on top of your cataloging game:
First, record and track charitable contributions digitally, not on paper. We will touch on this more later, but if you use templates or purpose-built software, then you will be able to save yourself tons of time because you will not have to recreate the wheel every time you want a new report for your board meeting. You will just be able to use the template again.
Second, take advantage of any automated systems that your nonprofit has in place for tracking donations. If you have an app or program in your arsenal that exists specifically for this purpose (and there are a ton of options out there), make sure that you are using it!
Third, keep in mind that cash or check donations are generally made in person (and thus must be cataloged manually), while debit and credit donations are often made online. Even when the latter are made in person, they will be tracked automatically in most systems.
When recording donations on paper is out of the question for your organization, there are two main softwares to look into that will help you document them digitally:
Using Excel to track donations has been an industry-standard for nonprofits for years. As an extremely powerful tool, Microsoft Excel is used by all sectors for financial recording and modeling.
Sam never knew about all these features in Excel!
Excel has a ton of great features, such as:
Conditional Formatting - Conditional formatting is a feature that allows you to change the color of a cell based on some criteria you set. For example, if you have a column of numbers and want to highlight any number that is greater than 100, conditional formatting will allow you to do so by setting a rule along the lines of, "if the cell value is greater than 100, apply red text". This can be used to highlight important information during meetings.
VLookUp - The vLookup function is a feature of Microsoft Excel that allows you to search for a value in one column of data and retrieve a corresponding value from another column. For example, if you have a column where each cell contains the name of a donor, and you want to ascertain the total amount of funds they have donated to your charity, you can easily find it. The function is called "vLookup" because the syntax of the function is based on the vertical coordinate system used in spreadsheets.
Table and Graph Creation - Table creation in Excel is the process of creating a table, which is a grid of rows and columns that is used to organize data. Tables can be used as a way to store raw data, or they can be formatted with formulas to make them more useful. Visual graphs can then be constructed to highlight important trends.
Charitable Contributions Database Template
A good template can help you get started with tracking your charitable donations, because it allows you to get a feel for everything we have discussed so far. Here is a template we created to get you started:
Pro Tip: You can use this article to help you with membership management as well - just be sure to tweak the template to allow for length of membership.
While Excel is an amazing tool, you still have to enter each donation manually or import it from a payment platform before labeling it.
There is a way to save even more time, of course, by using purpose-built software tools for nonprofits that automatically store and record, in the proper format, every donation made to your nonprofit.
We have reviewed five of the best databases for nonprofits. They are easy to use, and make cataloging your donations a breeze. Here are our top picks:
The #1 Charitable Contributions Database Software: Springly
Springly is the best database software for small nonprofits as well as enterprise-level organizations, and everything in between. With unparalleled flexibility and power, Springly gives you the ability to track virtually everything about your organization at lightning speed.
Here are some of our users’ favorite things about us. We offer:
A seamless dashboard for comprehensive overviews
A stellar support team
The most reliable database solution for nonprofits
Springly’s nonprofit management database software automatically records and tracks donor data whenever someone donates. You can sort by donor, donation amount, campaign, date, and virtually any other category for a 4-dimensional view of your nonprofit’s financial position.
This makes financial modeling and projection a breeze, and since there is a very small learning curve, any member of your team can do it! You can even connect it to your email marketing tool, event registration database, and other nonprofit management software such as alumni database software and profile database software to supercharge your next campaign.
Of course, Springly is not the only option out there. Here are some other nonprofit database software tools that are worth checking out.
Neon CRM is a cloud-based nonprofit database software that helps you develop and manage relationships with your donors. It can be accessed from any device and supports unlimited users.
Neon CRM was designed specifically for small businesses, but it is also very popular in the nonprofit sector because of its easy-to-use interface. It is also used by individuals and large businesses.
Bloomerang is a cloud-based software that helps nonprofits manage their donor relationships. It is used by a large number of nonprofits, including many small and medium-sized organizations. It includes a full CRM that allows you to manage information on everyone who graces your nonprofit’s circle, including your volunteers, sponsors, grantees and of course donors. The software is used by nonprofits of all types, from animal shelters to museums, from colleges to libraries.
Little Green Light
Little Green Light is a nonprofit database software that acts as a CRM and fundraising platform. It is cloud-based, so you can access it from any device with an Internet connection.
The free version of Little Green Light offers basic functionality like contact management, event planning, and email marketing. The paid version adds features like donor management and fundraising reporting.
Tristan is contemplating which CRM is best to use for his organization.
Little Green Light has a free trial period where you can try out the software before paying for it. You also have the option of starting off with their free demo service to test out how well Little Green Light will work for your organization before committing to purchasing anything.
RENXT is a software that helps nonprofits with fundraising, donor management, and accounting. It can help you manage your donor database, track donations, and manage fundraising campaigns. The software also helps with financials so you can see where your money is going at any time. RENXT was built with ease of use in mind so it is simple to set up and get started, allowing you to make the most of your nonprofit's data.
Raiser's Edge NXT
Raiser's Edge NXT is a nonprofit database management software that allows you to manage your donor and event data all in one place. It is considered to be one of the pricier, but more powerful options for your nonprofit database software.
Raiser's Edge NXT offers a robust database system that lets you organize donor information easily, a customizable fundraising calendar that helps make sure no events fall through the cracks, and an email marketing tool that lets you create customized messages to send to individual donors or groups of donors.
Tracking charitable contributions as a nonprofit does not have to be difficult. With an Excel template or dedicated nonprofit database software, tracking donations and issuing donation receipts has never been easier.
Tracking donations is often required by the IRS, but it can also help your nonprofit create a strong foundation of financial knowledge. It can improve your financial projections and make your budgeting more accurate.
Use the Excel provided in this article to try out Springly’s database CRM software for nonprofits and to find out what works best for your organization.
Whatever you choose, just make sure to track donation amounts, names, dates, and types so you know exactly what your awesome donors are contributing!
💡What is a charitable contribution?
A charitable contribution is anything of value that someone gives to your cause, such as cash, time, or goods and services. Find out more.
🔑 How do you keep track of charitable contributions?
You can either use an Excel template or a purpose-built nonprofit database management software. Find out more.
📝 How do I organize my donor data?
You will want rows containing the donor’s name, donation amount, donation date, the campaign associated with the donation, and the type of donation. A database management software does this automatically. Find out more.