THE BLOG
12/30/2014 02:22 pm ET Updated Mar 01, 2015

A Donor's Advice to Nonprofits

If you manage a nonprofit organization that is registered as tax exempt under Section 501 (c) (3) of the International Revenue Code, there are some very simple things you can do to attract donors and encourage them to keep giving. I contribute to about 40 nonprofit groups each year in amounts ranging from a few hundred dollars to several thousand and I am continually surprised at how many organizations do not seem to know the simple steps required to meet donors' needs and expectations.

This is important because rule No. 1 is that the people most likely to give you money (and to do so in increasing amounts) are those who have already given to your organization. So keep them happy. Here's how:

• Acknowledge contributions promptly, immediately if possible. When contributions are made with a check (still the way many of us like to do it), it should not take more than two weeks for a donor to receive a letter thanking them and citing the amount and the date received. The letter should also include the fact that "no goods or services were provided in exchange for your contribution" or words to that effect. This is an IRS requirement and its omission is very common. If goods or services were provided--dinner, say, or a coffee mug -- provide that value and state that the balance of the contribution is deductible.

• Scanned, signed acknowledgment letters sent via email are fine, but some donors still look for an original letter in the mail. For contributions over $500 it is probably worth providing an on-line acknowledgment and a letter as well.

• When credit card or Pay Pal contributions are received on line, your website program should confirm the donation and, if you are signed up with Network for Good or a similar service, an acknowledgment receipt will be generated for the donor automatically. This is usually sufficient for IRS purposes, but most of us still want to know that someone at the organization has noticed our gift, so send the letter, or a follow-up email as well. If you receive a large number of small contributions, and you're confident that the automatic acknowledgment system is working properly, the follow-up can be reserved for larger gifts. But remember that an unacknowledged contribution is likely to mean the loss of a donor.

• For substantial contributions a telephone call to the donor is fine and appreciated, but be sure to follow up promptly with that letter. Also very helpful: Post your organization's basic financial information on your website. Donors can (and will) check your financials on Charity Navigator which includes your most recent 990, but posting basic financial data on your own website suggests confidence and transparency and I highly recommend it. I also recommend posting the names and affiliations of your Board members and, of course, the organization's officers. And please don't make these things hard to find. I've often been told "It's there!" when I suggest that something is missing. It may be there, but buried beneath two or three clicks. Make it easy.

• Create and send annual reports or an equivalent that contains a financial summary, Board members (please add their affiliations if they agree), and officers as well as what you have accomplished in the previous year, your mission, and some photos. Remember that your objectives should not just focus on your activities. They should describe how you will help deserving people live better lives, or otherwise make the world a better place. An inexpensive newsletter format is fine if it includes these things.

Finally, remember that donors like making contributions. A considerable amount of research has revealed that doing things for others makes us happy and that applies to monetary gifts as well as the other generous acts. Remembering this can make your fundraising easier and less of a chore.