Soft Credits

Adam Eggert

How does everyone handle with reporting soft credits in your overall donor retention numbers?

Ex. - A local t-shirt fundraiser was ran thru the local school. We received one check from the school with a list of everyone who bought a shirt. Was entered into school's record and each person was given a soft credit. Should each of those be counted towards overall retention numbers?

Thanks, for any information available!

Adam Eggert

Horizon Health Foundation

JoAnn Strommen

First question, when you say entered in RE - do you consider this a donation from the school?

While it may be a donation from the school, based on the info you posted, individuals were purchasing a t-shirt. For us, there would be nothing for which to soft credit the individuals. Exception would be if they paid $100 for a $10 t-shirt, then possibly $90 SC - need more details.

I don't see a gift to SC if they paid a FMV amount and received a t-shirt.

Adam Eggert

The actual check itself came from the school thus why it is entered in the school's record. Would you approach this situation differently?

JoAnn Strommen

The donation from the school is fine. For the reasons stated I would not SC everyone who bought a shirt. They “bought” something, not donated.

If you want to track who bought a shirt, consider event record or an attribute IMO.

Dariel Dixon

What @JoAnn Strommen says is important. While there may be a charitable component to this, that doesn't make it a gift. It may be income, but not all income needs to be in RE.

You will need to know the fair market value (FMV) for the shirt, and the amount they paid. The amount the school paid for the shirts is irrelevant, which is important as well, as charitable portion only takes into account the FMV, not the cost of production. For instance, if they were selling the shirts for $10, and even though they only cost $5 to make, if the FMV for the shirt is still $10, there is no gift at all.

I would think if there is a gift at all, and if not, if it's even worth the time and effort to capture this data.

Faith Murray

I always view this from the angle of relationships and the donor's perspective. Did the donors buy T-shirts because it was a school event, or because they wanted to support your org specifically?

If the donors were only supporting a school event and don't intentionally care about you, would they be offended if you sent them a lapsed letter ignoring their participation? Remember that your lapsed mailing segments will pull them in if no soft credit or other entry is made.

Or would they say, “I'm a loyal supported because I buy your T-shirt every year"? If this is the case, JoAnn is correct that a soft credit would still be out of place for a purchase transaction – but you might enter a $0 gift or soft credit. That way you don't include purchases into a lifetime giving summary.

Or, as Dariel suggested, record as an event registration without a dollar benefit, but make sure to factor in event participation when pulling lapsed communiques and prospect lists. It's not beyond the realm of possibility that your one “in” with a new major donor could be, “Hey, you bought one of our T-shirts last month, but we want you to do more.” You deserve to have that information somewhere in their records.