Frequently Asked Questions About Tax Letters for Monthly Donors

First off, I hope that this is going to be a somewhat quiet week leading up to Christmas or other holidays you may be celebrating. I am very ready for a few quiet days catching up on my reading and my favorite Christmas movies!

I’ve heard from several organizations that they are shutting their offices between Christmas and New Year’s. While this may seem a great time to do so, it’s not very donor-centric. This is when donors sit down to make that important year-end donation!

May I be so bold to recommend that you at least have someone answer the phones or have your development phone forwarded to your cell phone, so you will not miss one single donor?

If you’ve scheduled your year-end emails and you’re busy writing your appeal thank you letters (I hope!), now is a good time to think of your tax letter. A few weeks ago, Lawrence Pagnoni already wrote about year-end statements. He listed everything you need to include.

Also, think of a story you’d like to share with your donors. Start creating a rough draft, so that everything is ready to go come January. And please make sure you include your monthly donors in the mix—no matter their giving amount.

One thing people always ask me is: “Should I list every single monthly gift?” My answer is that you’re better off showing just the grand total as that’s really all the donor needs and use the space to tell an impact story.

It’s a great opportunity to make the monthly donor feel really good and happy that they chose to commit to give to you on a regular basis. Make sure you send this tax letter via email and via postal mail!

The next question folks ask me is: “Should I use the tax letter and ask my monthly donors to upgrade at the same time?” My answer is that this should really be a “thank you” letter with a total overview of giving. They’ll put it with their tax papers. It’s a service you provide to them.

Rather, I recommend that you send an upgrade ask in February to those monthly donors who’ve been giving for a while. I know that some organizations only wait three months before they ask. While that will generate some upgraded givers, it could also create a feeling of “greediness” and the drop-offs will be larger, especially if the donor doesn’t really know your organization and your stories yet.

I recommend waiting at least six months, and in my experience, between nine and 12 months usually works best. You can make the case for an increase. Donors understand that things have become more expensive. They see that your services have expanded and are more needed now than ever before. They also see the impact of their gifts. Your upgrade results will be better if you wait.

So, if you have a moment, start getting your tax letter ready so you’re totally ready to roll in the new year!