Not-for-Profit Notebook

Practical insight and analysis on the accounting, audit and tax issues impacting not-for-profit organizations.

Take "Macro Advantage" of Micro-Donations: 4 Tips

The first successful U.S. micro-donation effort may have been in 1891 when a Salvation Army captain put a kettle out on a San Francisco street and collected donations to fund a Christmas dinner for the poor. Micro-donations have morphed in many ways since then, involving small-sum donations made via checkbooks, credit cards and, in more recent years, website links, text messages and other “new technology” tools.

How successful your charity will be in following the micro-donation tradition depends on many factors, including the economy, marketing ingenuity, ease of making donations and security controls. Here are four suggestions for making those small potatoes add up.


  1. Realize the appeal

Micro-donations are often defined as gifts of an amount that a person wouldn’t think twice about spending. Their popularity has increased in the last several years, and that’s of little wonder. When money is tight an individual donor may back away from a request to donate $200 or more to your organization. But donating $20 a month via an automatic checking account deduction may fit the budget, even though the total contribution will be larger. Micro-donations make giving feasible for so many more people.

Also, younger people may now be able to afford only small donations, but as they progress through life they may be able to donate a lot more. Small contributions are a great way to draw them into your organization and start to build a relationship.

  1. Make small acceptable

Campaign organizers would love to get large, generous donations, but they don’t want to exclude the “little guy” either. Including wording in your fundraising material — such as “Every dollar counts” or “No donation is too small” — legitimizes the micro gift.

This can help encourage donations from all donors, regardless of their financial resources. Remember that donors with deeper pockets are often hit hard by multiple charities during fundraising campaigns. Micro-donations give the bigger donor an opportunity to contribute to a number of organizations. And a micro-donation from such a donor this year could even turn into a macro-donation in the future as the donor gets to know your organization.

  1. Show big appreciation

While your organization might not consider a $25 or $50 gift “big,” it may be a significant contribution for the person making it. Let micro donors know you appreciate their contribution and show them how you’re putting their money to work.

For example, a food depository could send a thank-you note that informs donors that their $25 contribution is paying for a food basket for a family. A literacy organization could list the textbooks that are being purchased with a $50 donation.

Also consider thanking individual contributors daily on your website. Post a graphic that illustrates how small donations are adding up to help your charity reach its fundraising goal. Create a video that shows how small gifts are used to buy business attire for the man or woman your organization is helping get back into the job market. Then post a picture of the recipient on your website or send the donor an e-mail with that image.

And remember that every thank-you, whether electronic or by regular mail, needs to be delivered as soon as possible. Any delay on your part can make donors feel that their contributions don’t matter. 

  1. Check out online tools

If you need some help in securing micro-donations online (and larger donations, too), there are plenty of tools available. For example, software provider FirstGiving offers nonprofit donation software that lets you include fundraising on your own website. Its API (application programming interface) is a set of Web services that allows an organization to integrate a secure payment or donation processing system into its existing website or online store or onto a fundraising platform.

Another provider, Blackbaud, offers “Luminate CRM,” a cloud-based system designed to meet the needs of large and midsize nonprofits. The system’s online fundraising and direct marketing functions incorporate mobile, social, e-mail and direct mail channels into its program.

These are just a couple of examples, and they might not be right for your organization. Be sure to thoroughly research your options and consult the appropriate advisors before committing to a provider.

Sidebar: Remember those receipts

Micro-donors who make their gifts via a check, credit card or payroll deduction don’t have to receive substantiation from your nonprofit to deduct the gift on their income tax return. But providing such a letter is still a good idea, because it’s another way to show your appreciation.

If the gift is made in cash, the donor will need a receipt from you to substantiate a tax deduction, no matter how small the donation. Make sure you have receipt forms available wherever you’re accepting cash donations and train your staff and volunteers to ask donors if they’d like a receipt for tax purposes.