QuickBooks is NOT a Donor Management System

(Donor Management Software is NOT an Accounting System)

Many new and smaller organizations gravitate to QuickBooks to help keep track of the organizations finances.  The seemingly logical extension of this software is to use it to keep detailed records of donor activity.  Since you need to enter the donations into the accounting system, it only makes sense to keep all of your donor information there also.

Unfortunately, as an organization grows they realize the limit of QuickBooks when it comes to dealing with donors.  Although it is a great spot to keep track of specific donations, it does not provide a suitable platform for important tasks like:

  1. Sending out donation acknowledgment letters
  2. Organizing prospects who might give to your organization in the future
  3. Tracking communication activities with donors and prospective donors
  4. Managing pledges
  5. Collecting ancillary data for specific donors such as:
    • volunteering history
    • board membership
    • email preferences
    • custom criteria and groups

Most organizations first try to augment their QuickBooks data with Excel spreadsheets to help accomplish the other necessary functions.  This is when the real fun (or frustration) starts.  People move, divorce, marry, have children, give money under different names, change employers, and that is just the start.  Keeping accurate records of your donors and constituents in one database is hard enough.  Keeping that information in more than one spot becomes almost impossible.

At DonorSnap it is very customary to have an organization come to us that has 800 names in the QuickBooks records along with 3-4 years of giving history.  In addition to that, they also have an Excel spreadsheet or two that is their mailing list that they use to communicate events, newsletters, etc. with their constituents.  These spreadsheets will have anywhere from 1,000 – 3,000 contacts.  There is some cross over with the QuickBooks system, but in general each list will have contacts in it that are not present in the other.

When we get this information at DonorSnap, there is an arduous process of combining the various lists together to come up with one cohesive set of contacts that can be used for all aspects on donor management.  Prospects, donors, volunteers, members, etc. can easily be tracked in a donor management system. This makes it easy to build specific and targeted lists for mailings, invitations, and directed solicitation.  The actual gifts (monetary, in kind, or soft credits) can be tracked and historical analysis can be done.  You can easily produce one of the most important reports an organization can have – LYBUNT (donors that gave last year but not this year).  These things cannot be done with QuickBooks.

That being said, a donor management system does NOT replace an accounting system.  You need QuickBooks, or your chosen accounting software, to keep track of the organizations revenue and expenses.  Having accurate fiscal records is just as important as having accurate donor records.  The two systems complement each other. The only point of cross over between the two is the actual collected donations that you will be reporting to the IRS and other constituents looking at your financial statements.  These donations are ideally kept in detail in your donor management system with a batch (monthly or weekly) journal entry in QuickBooks of the total donations.  There is no legal or accounting need to keep the detailed donors in QuickBooks so long as you can produce the detailed report from your donor management software.  However, certain organizations get a sense of comfort by having the donation detail also in the general ledger.  For these organizations, many of the leading donor management software packages have integrations with both QuickBooks Online and QuickBooks Desktop (installed) versions that will allow automated transfer of donation detail.

Is Social Media Necessary for Nonprofits?

Nonprofit organizations stand to gain a lot from the smart usage of social media. The key word here is “smart.” Not all nonprofits have a target audience that is going to be active across all social media networks. It is important for organizations to do some analysis of their likely donors. Try to determine how they prefer to interact with an organization, where they are most likely to be active online, and what the right approach is to reach out to them.

The other part of smart social media usage is to have SMART goals. You have probably heard it before, but your goals should be specific, measurable, achievable, relevant, and time sensitive. Determine ahead of time what you want to accomplish, and develop your social media strategy specific to those goals.

If you need some help getting started with your goals, try thinking about things like the following:

  • Expanding your reach to new potential supporters such as the friends of your friends.
  • Increase engagement from the people that are already supporting your organization.
  • Increase donations by placing online donation forms in your social media pages
  • Developing a communications platform to increase awareness of your cause

Do not confuse those starting points with smart goals though. Every organization is different, so you will need to make these goals specific to your needs. Define them with numbers that you can track such as 1,000 visitors each month, or 5 new stories posted each week. Well written goals make it easier to come up with a great strategy for success.

Here is a quick overview of some of the most popular social media networks and ways to tell if they are good marketing avenues for your nonprofit:

  • Facebook is far and away the largest social media site on the internet. With nearly two billion active users, Facebook has the benefit of a gigantic range of users you can reach out to. Unlike many other social media sites, Facebook is not just a digital hangout for young people. Working professionals up through senior citizens are regularly active on the site. It also has plenty of options for sponsored content and different forms of media, including videos, images, and stories. Because of Facebook’s versatility and diversity of users, almost every nonprofit organization can benefit from having an active account there.
  • Twitter does not have nearly the diversity of users as Facebook; it skews a bit younger, though there is still a sizable audience of older people and working professionals. It also does not have quite the same versatility in terms of functionality. However, it is an outstanding place to interact with followers or to take part in large-scale conversations about topics related to your organization—perhaps more so than Facebook.
  • Instagram has become the most-used and most-loved social network of the younger generation. Millennials and the so-called Generation Z (born in the late 90s and after) have embraced Instagram for its simplicity and its propensity for self-expression. If you’re primarily using social media to find new donors, Instagram might not be your best bet, because it is a much younger audience. It doesn’t allow for as in-depth of content. However, its large user base and ease of use still make it an attractive outlet for organizations that have missions that align with the interests of a younger demographic.
  • LinkedIn is a professional network that tends to have an older, more business-centric audience than the other social media sites listed above. While it is a great platform to provide more information about your organization and to publish some informative articles, it is not necessarily an ideal platform for attracting new donors.

In general, nonprofits should always keep their target audience in mind. Social media can be a great tool depending on the kind of organization you are running, but ultimately you need to meet your audience where they are already likely to be. Learn to communicate with them in the method they most prefer.