On the other hand, many organizations (and this by no applies just to nonprofits) will throw money and time at trendy projects without thinking about whether they're the right tools, with the right strategy, investment, support, or marketing behind them.  By all means, try new things.  But do it smartly.  Do your homework, test, learn from others, learn from your own failures, and get better at it over time.  And don't neglect what's already working for you.

Let's say the following donations will be processed by different nonprofits in the United States on Jan. 2, 2012:

1. A check mailed (and postmarked) on December 29th that arrived in the office on January 2nd.
2. A voice mail donation via credit card left December 29 (yes, it happens). A staff member heard the message on Jan. 2 and charged the credit card that day.
3. An online donation made on December 31st. The credit card was charged immediately. The nonprofit was notified of the gift on Jan. 2.
4. An online donation made on December 31st to a different charity.  That charity's online giving system did not charge the credit card immediately -- instead it sent an email (ideally, an encrypted one) to a staff member that the donation needed to be processed.  The staff member charged the credit card when she returned to the office on January 2nd.

Which tax year are they each for? 

The answers below are based on IRS Rules and Regulations: What You Need to Know to Stay Out of Trouble by Alison L. Paul, Executive Director of the Montana Legal Services Association, from the book Advancement Services: A Foundation for Fund Raising, 2nd ed., published by the Council for the Advancement and Support of Education.
 

1. "The IRS has stated that a charitable gift made by check is complete at the time the check is delivered or mailed, provided the bank eventually honors the check." The check would be considered a 2011 charitable contribution even though the nonprofit did not receive the check and the funds did not clear the bank until January 2012.
2. "A gift made by credit card payment is complete when the charge is made." (Note that is doesn't matter when the credit card bill is paid.) The charge is considered made when processed by the recipient. So if the charity did not process the charge until January 2012, the donor would be treated as making the gift in 2012 rather than 2011, as she intended.
3. Unlike scenario 2, the online donation service charged the credit card immediately.  Even though the nonprofit wasn't notified of the donation until 2012, the gift was "made" in 2011.
4. Scenario 4 is the same as scenario 2.  The credit card wasn't charged until January, so the gift is for 2012.

Now, nonprofits should not set themselves up as tax advisors.  The donor is responsible for documenting their gifts in case of an audit.  On the other hand, nonprofits are required to provide correct information to donors and can be fined for knowingly falsifying tax receipts.

For further information, see IRS Publication 526, Charitable Contributions, and Publication 1771, Charitable Contribution, Substantiation and Disclosure Requirements, and John Taylor's "Annual Date of Gift Message".

If you have an urgent call to action, a way of reaching a mass audience, and don’t mind not being able to identify, steward, or resolicit most of the donors who give via text, mobile giving can definitely be effective. But those are big “ifs” and most nonprofits don’t meet those criteria.

I do expect this to change over time. There will be more ways to give via cell, like PayPal for Mobile and XIPWIRE. That will bring down the startup and monthly costs and allow you to identify your mobile donors. But we’re not there yet.

If you want to learn more, Mobile Active published a great overview of the mobile giving landscape last year called Texting for Charitable Dollars: The Definitive Guide
 

The Paperless Choice Challenge is rewarding successful, creative, replicable campaigns that use electronic  fundraising tools by giving away eight prizes totalling over $20,000. Entries can be submitted between June 15 and September 15, 2010. 

For more information go to http://www.paperlesschoice.org/. And while you're at it, check out more resources on going paperless from the GreenTech Initiative's paper reduction campaign.

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• 14% growth in online giving overall. 

• 69% of the organizations they looked at raised more online in 2009 than in 2008, while 31% raised less. 

• Donors were still giving, but in smaller amounts. The average gift size was $80.80. Most organizations saw declines in average gift size

• Small organizations grew fastest. This has been the finding of several studies over the past few years, and isn't surprising. When your list is small it's easier to rack up big percentage gains.

• Email open rates remained steady at around 20% but click-through rates declined.

The Chronicle of Philanthropy's annual assessment of online giving came out in April, based on data from 176 of the largest nonprofits in the U.S. Its findings included:

• The 151 nonprofits that provided data for both 2008 and 2009 reported that overall donations fell by a median of 9% while online gifts grew by 5%.

• As Convio found, average gift size declined. More than half of the nonprofits that reported the size of their average online gifts saw decreases in gift size.

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It describes the process of raising funds via SMS from the donors' and the nonprofits' perspectives, including costs and tips for getting started. The guide is available for free at http://mobileactive.org/mobile-fundraising.

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Their goal is to raise $15,000. The fund will allow Idealware "to build on (their) base of more than four years and hundreds of thousands of dollars worth of software research to provide the new resources that nonprofits need most, like information about social media tools, mobile text messaging, constituent databases, and more." If you want to support them as well, you can do so on the Research Fund's fundraising page.

(Full disclosure: I have contributed to some of Idealware's reports, and they have even paid me for advice.)

Very few speakers or attendees reported using these tools for fundraising, though.  UC Berkeley talked about a badge that donors can post to their Facebook pages after making a gift ("I Feed The Bears").  This is the online equivalent of a window decal or bumper sticker, with the added benefit that one's friends can click the badge to make a gift.  It's not an explicit fundraising appeal, but they might start using fundraising badges for class campaigns in the future.  Peer-to-peer class campaigns (at least for recent classes) seem like a natural for social media, and I expect we'll start seeing them.

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