The Case for Sending Donor Statements Quarterly
Communicating with donors is a great way to keep your organization alive in their minds. Many donors only hear from the nonprofits they support twice a year-once when they ask for money and again when they receive their annual donor statement. Quarterly donor statements are a good way to thank your supporters, to let them know what good works are being done with their money, and can be a check against fraud. Additionally, if your supporters pledge or tithe, it is a pleasant way to show them how much is still due.
Let's take each point individually. The donor statement should detail the amounts given and say "Thank You!". I strongly feel that you should NOT ask for additional money. It leaves a better impression if the donor doesn't feel like he only hears from you when you want something. Have your website and address listed- he knows how to make a donation-but focus on thanking him.
In just a sentence or two, update the donor on any accomplishments or on your various programs. This way you have both thanked them and reminded them why they like to give you money.
Donor statements are a helpful tool in guarding against fraud and mistakes. As I explain in Using QuickBooks for Nonprofit Organizations, Associations, & Clubs, you should include a line with a person's name and number to call with any questions about their donations. This should NOT be the bookkeeper or the person in charge of donor accounts. If the donor has sent a donation that is not reflected in your accounting records, it needs to be researched by someone other than the bookkeeper. It may have been recorded in the wrong account, lost in the mail or stolen.
When a donation is recorded to the wrong account, this can be easily fixed and new statements sent to the donors, but you may not have known of the error if you hadn't sent out the statement. If a check is lost in the mail, the donor can be approached for a replacement check. If the donor tells you the check has been cashed, but it has not been deposited into your bank account, it is time to investigate the possibility of fraud. Even if no fraud has occurred, sending out the quarterly statement allows the nonprofit to find and correct errors.
If you are a nonprofit or church with members who commit to an annual donation paid throughout the year, sending quarterly statements with a Balance Due line is a nice reminder, without actually having to ask for the money. If you are using a donor management system, it should be easy to design a statement to include both the donations made and the open pledge balance.
If you are using QuickBooks, getting the open donation amount included is a little trickier. In QuickBooks for Churches & Other Religious Organizations and in a video on www.AccountantBesideYou.com, I explain how to generate a donor acknowledgement, but it only reflects all the donations received, not the outstanding pledge amount. Luckily, a reader introduced me to a great program that works with QuickBooks to easily export the data and format the statements automatically. The statements print, ready to be tri-folded and placed in #10 window envelopes. Not only does this save time (and money) versus printing mailing labels, there is no chance of the wrong letter being sent to a donor. For more information, check out the Nonprofit Donor Statement Generator at accountantbesideyou.com/donor-statements.
Sending donors quarterly statements of amounts donated and open pledge balances gives the nonprofit the opportunity to communicate with its donor without asking for anything in return, to share its accomplishments and status on its programs, to find and fix errors or fraud early, and to inform donors where they stand on the donor promises. With automation, the small amount of time and postage required should be more than offset by the goodwill and other benefits.