Technology & Operations

Organizations often struggle to fully understand the distinctions between gift processing and finance roles and responsibilities. While these departments are sometimes viewed as one, they serve different but complementary purposes. Processes and technologies must support these different functions. Outlining the goals, priorities, processes, and needs of each department can help build a cohesive and collaborative relationship between the two departments.

The table below outlines a few of the distinctions between gift processing and finance:

Gift Processing Finance
  • Ensures donations are entered in a timely manner into the fundraising database.
  • Oversees the accuracy of individual donor records and is concerned with a positive gifting experience.
  • Generates donor receipts per IRS standards.
  • Reconciles the information entered by gift processing to balance the organization’s general ledger.
  • Oversees the financial health of the entire organization.
  • Audits the organization’s accounts receivable and payable.
  • Utilizes the fundraising database to record transactions and donor information.
  • Records transaction-level information.
  • Utilizes financial accounting software which may include general ledger, payroll, and balance functionalities.
  • May record transaction-level information or balance at the department or fund levels.
  • Follows IRS guidance as well as industry standards, usually defined by CASE (Council for the Advancement and Support of Education) or AHP (Association of Healthcare Professionals).
  • Follows standard accounting principles, usually defined by GAAP (Generally Accepted Accounting Principles).

Transfer of Data Between Gift Processing and Finance

Gift processing and financial systems have a standardized process for communicating with each other, typically referred to as the general ledger transfer process. Many fundraising databases come with built-in functionality to facilitate this crosstalk between the fundraising and financial systems. This crosstalk may take the place of a periodic batch transfer of data, or may be fully automated, depending upon available technology.

Communication Between Gift Processing and Finance

Many nonprofit organizations struggle with communication between gift processing and finance departments. Often these issues stem from a lack of understanding regarding the roles outlined above or from technical issues. Almost always, however, these issues can be resolved through a facilitated understanding of each department’s overall goals and technical needs.

If you are experiencing issues related to role definitions, transfer of data, or communication between the gift processing and finance departments, BWF’s experienced consultants can help. Contact us today. Together, we transform philanthropy.