Refunding Donations: Your Donor Wants Their Gift Back
A happy customer is a loyal consumer. Consumers expect 100% satisfaction with our purchases and when that does not happen, we expect a refund or exchange with no hassle. Major retail companies have customer service policies in place to handle these situations and keep their customers.
What about your nonprofit? How do you handle a donor who is unhappy and wants their gifts returned? How do you inform the donor that if their gift is returned, they may not claim it as a charitabl
e donation on their income tax return? Hopefully, you have a gift acceptance policy in place to address this situation.
As we know, the COVID-19 pandemic caused nonprofits in the performing arts to go dark: no live theater, dance, or music. Season ticket patrons across the country had to be contacted. Most organizations offered their patrons several options: refunds, apply tickets to the next season, or donate the price of the season subscription to the nonprofit. The vast majority of patrons donated their subscription to the theater.
There are other examples we’ve all experiences at one time or another: the golf tournament getting rained out, or the celebrity cancelling at the last minute, or a restricted donation being used in another way without permission.
Does your gift acceptance policy include language about returning donations? I found a very thorough article HERE that address various aspects of this topic and the tax implications. This may be useful information as you craft an addendum to your gift policy.
Overall, most donors happily support their chosen nonprofits. As a nonprofit leader you want to balance the welfare of your agency with the best intentions of your donors.
Michelle Crim, CFRE
Dynamic Development Strategies can help. We offer coaching and fundraising services for our nonprofit clients. We specialize in startup and smaller nonprofits because we understand your challenges. Please contact us for more information.