Nonprofits use different words to refer to transactions, donations, and gifts.
Overview
The goal of this article is to clarify meaning by defining a common vocabulary for Kindful.
Linked Articles:
Terminology
Transaction:
A transaction where money is exchanged directly between the contact (typically referred to as a donor) and the nonprofit organization. Sometimes a transaction is differentiated from a "soft credit" by referring to it as a "hard money" transaction. Transactions typically have accounting and/or tax-receipting implications and count towards your bottom line.
Soft Credit:
A soft credit is a record you can add to a contact when they have given to a nonprofit indirectly through another contact. This typically happens through something like a donor-advised fund, through a husband/wife, or through a foundation. Soft Credits do not have accounting or tax-receipting implications. We can think of this as a way to understand a contact’s impact on a nonprofit when they did not give “directly” to the nonprofit.
Non-Cash Gift:
When non-currency is exchanged directly between a contact and a nonprofit organization, there is not an exact, objective value to the gift. However, a nonprofit may still want to assign an approximate or appraised value to the gift as a means of capturing the positive impact the contact has made upon the organization. An example would be an item donated for a silent auction. Non-Cash Gifts are not “currency” in Kindful. For United States nonprofits, Non-Cash Gifts do not appear in Year-End Tax Summaries.
Contribution:
Kindful uses a more inclusive term, “contribution”, to talk about Transactions, Soft Credits, and Non-Cash Gifts in aggregate. A Contact’s contribution summarizes the contact’s direct and indirect financial impact on a nonprofit organization (through transactions, soft credits, and non-cash gifts). When you see "Contribution" in Kindful, it means transactions and/or non-cash gifts and/or soft credits.
Of Note (for Reporting)
There will still be a few places in Kindful with legacy “Gift” or “Giving” verbiage, notably in report column headers. When “Gift” or “Giving” appears in a report column header, it refers to “transactions” only.
Name in Kindful |
Relates to Tax Receipting? |
Other Common Names |
Transaction |
Yes |
Gift, Donation, Payment |
Soft Credit |
No |
|
Non-Cash Gift |
Not in the US |
In-Kind Gift, Noncash Donation |
Contribution |
No |
Gift, Donation, Giving |
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