By Cynthia J. Armour, CFRE
November 28, 2011
The question:
How long should it take to issue a charitable receipt for a donation? We are a small, all-volunteer charity with one person who does that work for us off-site and apparently some donors have complained.
Cynthia's response:
As the Grassroots Fundraising guru Kim Klein says, "thank before you bank!" Notice she didn't say "receipt before you bank." The rhyme is a good reminder of what really matters. Ensure that your donors feel appreciated, ideally within 24 to 48 hours of receiving the gift and you will not only boost your chances of renewed support but many will increase their donation in the future. You don't need to issue a receipt immediately in order to reap the benefits of relationship-building.
It's completely understandable that volunteer-driven organizations have to make the best use of their administrative support. Inevitably, charitable receipting does not occur on demand. Realistically, receipts are issued when it's convenient (therefore affordable) to delegate the task. However, that shouldn't mean that your charity doesn't recognize a donor's contribution promptly. A simple phone call from a board member or other volunteer saying how much you appreciate the donor's support will help to strengthen the relationship. You can also let him or her know that in order to keep costs down your administrator only issues receipts periodically and one will follow by a specific date (and then honour your promise).
In today's world of instant information many of us know the minute a cheque has cleared our bank account. If you put yourselves in a donor's shoes (and we should in order to understand the importance of good stewardship), why would that individual want to renew their gift if it takes your charity weeks or even months to acknowledge their generosity?
Canada Revenue Agency (CRA)'s perspective
Issuing a charitable tax receipt is not a requirement of the Income Tax Act (see bullet #1 below); in fact, there are important expectations and considerations that arise as a result. Once the charity decides to proceed then CRA suggests that donations be receipted by February 28 of the calendar year following the gift so that taxpayers can claim their credit (bullet # 2).
There is information available on the CRA's Charities Division website that covers everything you need to know about charitable receipting (but were afraid to ask!) including:
In addition to the above information you can also contact the CRA Charities Directorate by calling 1-800-267-2384.
When it comes to issuing a charitable tax receipt and including a written thank you or results report, be sure to follow CRA's guidelines. Be consistent. The name on the cheque guides the name on the receipt. If a donor asks for an alternative they may have been mislead in the past. Unfortunately, carelessness in the sector has created some false expectations. If all else fails, refer them to bullet #3).
The bottom line
The acquisition of a donor is the most expensive part of your fundraising activities, and you work too hard to risk losing valuable supporters through neglect. Don't overlook the need to recognize donors in a polite, respectful and timely manner. Prompt receipting is less important than the thank you.
Phoning donors within a day or two of receiving their gift is a cost-effective way to celebrate their commitment and get to know them a little better. With the proper system in place it can be completely volunteer-driven. Penelope Burke's research on donor-centred fundraising discovered that more than public recognition, donors wanted the following:
- To be thanked promptly with some form of meaningful acknowledgement.
- To be reassured that their donation would be used for the purpose they intended.
- To receive a report on the results of their last gift before they are asked for the next one.
As I've mentioned before, it reminds me of my first lesson in donor stewardship at six years old. My mother said "Cynthia, if you want a Christmas present don't forget to thank Granny for your birthday present!”
Your volunteer-run charity can still ensure its donors feel appreciated. In some respects, you’re more nimble than large institutions and you have the ability to personalize your contact and relationships with donors.
Have a wonderful and safe holiday and let's count on lots of year-end support for your worthy cause now that you have the thanks and receipting down.
Helpful links
CRA's Charities Partnership and Outreach Program (CPOP) has funded a number of important projects across Canada to strengthen compliance with the Income Tax Act. Check out the user-friendly resources available to you. Of particular note on receipting see:
Archived Fundraising Q & A on Receipting
Kim Klein's "The Ten Most Important Things You Can Know About Fundraising" - A succinct and useful reminder for all of us!
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Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact Cynthia directly at 705-799-0636, e-mail answers@elderstone.ca, follow her on Twitter at @CynthiaJArmour, or visit www.elderstone.ca for more information about her services.
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