Regular Communication Between Development and Finance Departments is Essential for Donor Management

Donors are one of the most precious sources of funding for publicly supported nonprofit organizations. Managing this resource is critical to sustainability, continuity, and financial health. There are many important elements to donor management, but these elements will be rendered almost useless without consistent pathways of communication and sharing of information between development and finance departments.

Recently, I had a discussion with a senior development officer that jumped-started my thinking on the importance of regular sharing of information between development and finance departments. The development officer lamented that “…. if only there were more regular communication between finance and development departments. This would greatly reduce most of the common mistakes and disruptions that occur while managing donor engagement, contributions, and pledges."

When it comes to contributions and pledges, the finance department concentrates mainly on compliance, documentation, tracking, and reporting. In contrast, the development department focuses mostly on mission and project storytelling, identifying donor prospects, acquiring pledge commitments, and receiving and facilitating donations.

Notice how disconnected the focus is for the two departments. This disconnection can lead to errors, inefficiency, and loss of donor confidence.

To bridge this gap, we need to move the center of attention of both departments to satisfying donor expectations and providing a positive donor experience. Having this shared goal will provide the motivation for regular communication between development and finance and encourage cross-departmental sharing of information.

Satisfying donor expectations is a key priority because a misstep here will lead to errors, compliance failures, and ultimately loss of donor trust and confidence. Key elements for meeting donor expectations include making sure:

1. Donor funds are accounted for properly and safeguarded;

2. Donor special requests and restrictions are documented and honored;

3. Donor information is updated on a regular basis and kept confidential;

4. Donor gift acknowledgment letters are provided timely; and

5. Pledge status statements are updated and circulated.

A close second priority is making sure to always provide a positive donor experience, demonstrating appreciation for each donor and interest in meeting donors’ needs and aspirations for the organization. Key elements to ensure a positive donor experience include:

1. Tracking and documenting all donor communications and promises;

2. Timely responding to donor questions and request for information;

3. Following up with donors for periodic “check-ins”;

4. Engaging in thoughtful donor recognition efforts; and

5. Providing regular organization progress and update reports.

Regular interdepartmental communication and sharing of information is essential to ensure each of these functions is carried in a manner that is complete, efficient, error-free, and timely.

Planning Tip – To improve the sharing of information between development and finance departments, start by establishing two operational protocols: (1) schedule monthly cross-departmental meetings; and (2) establish a notification protocol for all high-dollar donation activity (e.g., $25,000 or more) that will trigger a cross-department alert. For example, a new $100,000 pledge commitment would trigger an immediate alert to the finance department from the development department while a partial pledge payment of $50,000 received by the finance department would trigger an immediate alert to the development department. Together large activity alerts and monthly meetings will help to close the information gap.

Shifting the attention of the development and finance departments to a shared focus on donor expectations and experience will foster more active sharing of information and strengthen cross-departmental communication. The measure of success will be happy donors, more contributions, and a growing organization.