One of the many features we offer for non-profit organizations is the ability to automatically issue custom tax receipts. After a contribution is successfully completed to a nonprofit’s crowdfunding campaign, we’ll ask the donor for their information to issue them a tax receipt. This is why we do the data collection after the transaction.
Make it at Easy as Possible
There’s a phrase that you’ll always hear people who work in tech say – you need to reduce friction to increase conversions. What on earth does that mean? Friction means any part of the website experience or process that slows down or makes more work for a user to achieve their goal. A conversion is the completion of whatever goal you have for a user. In the case of your crowdfunding campaign, your ultimate goal is to get more donations.
How many times have you stopped filling out a form or making an online purchase because it was just too tedious or more time consuming than you expected at that moment? Do you want a receipt for every coffee you buy? If it’s not a large purchase, many people would rather keep track of their purchases using their online transaction reports, not another receipt for the pile.
By not putting data collection before the transaction is completed, we’re removing a roadblock to collecting more donations. We’ve found that our nonprofit customers receive more contributions when we reduce the friction for them, so essentially we do this because it raises more money than the traditional alternative.
This process of making things as easy as possible is called Conversion Rate Optimization.
Some Donors Really Don’t Mind About Tax Receipts
After the payment is successfully processed, we ask for the donor’s details for a tax receipt. However, donors sometimes don’t want a receipt, or simply don’t care enough to fill out another form at this point – especially if they are on a mobile device.
To be sure, we send the donors a few reminders to tell them that we need their information in order to issue a receipt. This messaging includes a link to return to FundRazr and fill in the information on their transaction. If they continue to choose to not put in their information, then we can’t issue a receipt because we don’t have everything we need – but the user has made it pretty clear at this point that this is not something that they mind very much.
What Happens at the End of the Year?
After the end of the year, if they still have not provided their information, one can assume they won’t and can treat the contribution as “un-receipted.” This can be a good thing in that your organization can have more flexibility on how it can allocate funds that come from un-receipted contributions.
If they do come back around at year end, one can update the information later, but over the last 5 years we’ve seen that these numbers are negligible.
Note: It’s always important to make sure that your organization complies with the applicable tax laws for your region. We’ll always make sure your donor data is available to you for your record keeping purposes.