When you applied to become a 501(c)(3)nonprofit organization, there was a small pile of forms to fill out, a mission statement to create, and board members to recruit. Not only did you have to form a legal corporation, but one of your primary duties was to learn the ins and outs of fundraising.
What counts as a charitable gift?
How do I value gifts-in-kind?
What is a bequest?
What is the best way to ask donors for donations?
These and a hundred more questions require an expert development director and finance director to sort through the legal jargon of running a charity.
One major resource that the nonprofits of yesteryear did not have is the internet. Just as direct mail campaigns and flyers requesting gently used goods find their way to each of our doorsteps, so the online world has become a major part of the infrastructure towards nonprofit fundraising. With these changes, are there a separate set of rules?
Fortunately, the same guidelines apply regardless of your method of sending out an ask. The most important part is bookkeeping and remaining in compliance with the law.
According to a recent IRS Information Letter addressed to Congressman Peter Welch (D-Vt.) Website or email solicitations should comply with the same rules that apply to other solicitations.
In a nut shell, the IRS said that if you intend to be a 501(c)(3) and want to raise funds on or offline, you must ensure that you structure your fundraising programs in a manner consistent with that tax-exempt status.
You need to describe your actual and planned fundraising activities to the IRS in your Form 1023 application (“Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code”).
Here is the sticky part. You must report any expenses incurred with regard to fundraising on both Form 1023 and your annual information returns (Form 990, Form 990-EZ or Form 990-PF).
One of the many challenges that nonprofits face is maintaining a database that incorporates your channels of income to not only record donor giving, but to analyze marketing strategies and outcomes. With WidgetMakr, our dashboards allow you to keep track of various campaigns, examine donor demographics, and monitor how close you are to reaching your fundraising goals.
With the increased implementation of technology, a common fear is that new devices and programs can make fundraising more complicated. Not only do you have to follow through with your tried and true methods to obtain donations, but now you have to learn complex steps towards mobile device fundraising, make your website compatible to tablets and smart phones, and babysit an account on social media.
At WidgetMakr, we know that technology can seem complicated and that you already have a full plate. We make fundraising easy, effective, and efficient. We provide a step-by-step, paint by numbers approach so that you can focus more on achieving your mission and less time training to use the latest cyber fad. Our dashboard lets you see what is working and what needs to be revamped.
Fundraising is complicated. There are tax laws to comply with, strategies to test, vast amounts of dollars to allocate, and there is always the worry of having more projects than dollars. At least with technology, you can follow the rules that you always have to achieve results that are better than what they were.