It’s the month for giving thanks. A time when we reflect on all we’re thankful for. Perhaps as nonprofits, we should also take the time to reflect on how little time and money we spend on thanking our donors properly. And reflect on the 20% decline in the very gifts we now receive because of this trend.  

Everybody’s doing it. 

There’s a trend among nonprofit organizations, ministries, and churches.  

The trend is to stop sending donation tax receipts through the mail and only send donors an automated email donation receipt. This practice all started when organizations began using newer relationship management and accounting systems that would “automatically” send a tax receipt through email once a gift was received.  

It’s a trend that has cost most nonprofits a considerable loss in donations over the last couple of decades. And yet, most organizations continue to jump on the bandwagon of only thanking donors through automated, digital receipts. 

Freedom is a click away. 

It became a trend in response to digital donation tools that provided donors with secure portals on a nonprofit’s website that allowed for a donation to be given online. These donation tools also auto-generated a web landing page that confirmed the gift receipt, and created and sent an automated email receipt as well. Donors were confident it was received. Wonderful! Good to go. 

Nonprofits and ministries were thrilled that donation processing was now just a click away, it didn’t require staff time for receipting, and they began to promote and encourage donors to give online.  

The check is in the mail.  

The only exception to this wonderful new process were those perceived “older” folks who preferred to give by check. Nonprofits would still have to account for those checks, but were doing so through the new systems that generated an email tax receipt.  

Now there was real push back by those folks who wanted a printed tax receipt for their records, but most were told to simply print the email tax receipt. If they didn’t have a printer, most organizations would accommodate with a printed tax receipt, but not without private grumbling.  

Donations are tax-deductible. 

A problem continued to arise with those folks who actually needed a physical tax receipt to provide to their accountant for tax preparation. It’s also important to note that many of these folks generally give enough away to nonprofits annually to actually get respectable tax deductions for their charitable donations. Many were the nonprofit’s most generous donors who have itemized deductions. 

You see, tax receipts are legal tax documents and people don’t throw them away. Even younger people. Tax receipts have a longer shelf life than almost any other communication tool. 

Just a little something to remember you by. 

The next outcome of this new online donation transaction process was that regular donors who formerly received a tax receipt in the mail, along with a thank you note, and a courtesy reply envelope . . . simply started forgetting to give. They were no longer getting a physical reminder in the mail. 

It is a researched fact that a significant number of donors receiving tax receipts in the mail, place them in their bill pile in order to file them properly and as a reminder to use the courtesy envelope for their next gift. A gift that was given to the organization or ministry when they also paid their bills.  

We’ve had clients who reported donors using courtesy reply envelopes years after they had received them in the mail. Envelopes that had special coding or colors to help indicate when they were sent. Donors were hoarding them.  

Tax receipts are direct mail appeals. 

Organizations, ministries, and churches whose mailed tax receipts included a thank you note with an update on how donated funds had benefited the cause, found this receipt mailing performed like a direct mail appeal.  And you don’t have to cover the postage on the courtesy response envelope. Donors do not mind putting a stamp on it. 

Remember, sending receipts that don’t contain thankful content, do not respect the giver’s generosity and aren’t appealing. 

Penny-wise and pound-foolish. 

Now, we also must respectfully give airtime to those nonprofits who justified digital receipts because printing and mailing receipts cost too much money. This statement is true when comparing the time and cost of one email vs. an envelope, tax receipt, courtesy reply envelope and a stamp.  

However, what most organizations, ministries, and churches hadn’t accounted for was the monthly loss of gifts given in response to the tax receipt mailing vs. the gifting response to the digital email receipts. And, most automated email receipts do not include a donation button for the donor to easily give again online, nor do they allow for content thanking the donor and reporting how gifts benefited their nonprofit. 

When we evaluated the regular donations no longer received, in addition to the costs saved by sending only email receipts, the loss of donations totaled up to 20% of an organization’s annual donations the year the email receipts were initiated. And over time, regular, monthly donations dropped in quantity.  

A foot in both camps. 

We believe nonprofits need to first consider the donor in their receipting protocol. Statistics are showing that mailed tax receipts are getting an even greater open rate today because they have so little competition. And the receipt is coming from an organization or ministry they support so the open rate is almost 100%. 

Also, surveys are showing an uptick in the issuance of checks or bank issued autopayments from donors who do not want their favorite cause to pay the processing fees associated with credit card transactions. 

So, we recommend the use of mailed tax receipts and digital receipts through email — both are beneficial. Giving donors the opportunity to express their preference is also gracious.  

May we suggest . . . 

1. This Thanksgiving, send all your donors a summary of their gifts to date for this year. It’s the same statement you are required to send in January every year, but it won’t include the full year. In the receipt letter, tell them how thankful you are for their generosity and give a brief overview of how your cause used their gifts this year. Oh, and don’t forget to include a response form providing all the ways they can give and a courtesy response envelope. Donors will notice on the statement if they have or haven’t given what they had desired to give you monthly or through tithing. No guilt, just a giving statement that informs their generosity.
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2. Review your current automated email content and embellish it monthly with a well-written thank you and update on your ministry. Plus, add a “For Your Next Gift” button that links the donor to your website’s donation page.
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3. For mailed tax receipts, the same thankful copy content is a must, and make certain your online giving address is presented on the tax receipt.
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4. Download the sample tax receipt layout template we have used for years with clients that is time-tested and can be incorporated into the receipt layouts found in most relationship management systems or CRMs.