The new year traditionally marks a time for renewed energy and setting goals, and for registered charities, it’s also a time to efficiently close out last year’s donations and prepare for a successful new year. As your organization closes the books on 2024 and prepares for the fiscal year ahead, take the time as a team to reflect on the past year, report on (and celebrate!) your accomplishments, and manage the donations that arrive in the days following the holidays to ensure your organization is well set-up for success in 2025.
TDG offers 7 tips to smoothly transition into the new year while planning for what’s ahead:
1. Reconcile Late Donations
Even though your fiscal year has ended, donations often keep coming in after December 31. These can be last-minute online gifts, cheques mailed in late, or gifts that were pledged before the year closed. Reconciling these donations is critical. Ensure these contributions are tracked accurately and, if necessary, acknowledged with your donors, especially for tax receipt purposes. Consider creating a donation reconciliation process for early January. This allows your team to capture and properly allocate any straggling gifts from the previous year.
If you do not already have a policy/process on this as an internal control measure, it is recommended that you develop a gift acceptance policy and consult with your auditors to establish a formal protocol to share with your donors.
Charitable organizations can apply year-end donations received in early January to the previous tax year if they meet specific criteria. Mailed donations postmarked on or before December 31 are eligible, regardless of when the organization processes them. For online gifts, the transaction date determines the tax year. This ensures donors can maximize their tax benefits while organizations maintain compliance with CRA receipting guidelines.
NOTE: At the end of 2024, the Government of Canada announced that it intends to amend the Income Tax Act to extend the deadline for making donations eligible for tax support in the 2024 tax year, until February 28, 2025, due to the recent Canada Post stoppage. This legislation will be introduced once Parliament returns. It is advised that charities monitor announcements from the Department of Finance to keep abreast of the changes.
2. Thank Donors with a Personal Touch
Expressing gratitude to your supporters is an ongoing process, but the start of the year provides a great opportunity for thoughtful acknowledgment. A personalized thank you note, especially when referencing their continued support into the new year, can strengthen donor relationships. Donor segmentation can be powerful here, too. Highlight recurring donors, large contributors, or those who gave during critical times, like Giving Tuesday.
3. Finalize Year-End Reports
As the dust settles from year-end fundraising efforts, the next step is to finalize reports for internal use, constituents and donors. Reporting plays double-duty here: fulfilling a transparency requirement and providing valuable insight into what worked, what didn’t and where to focus efforts this new year. Start the year with a donor impact report. This document should clearly communicate how last year’s donations were used, the difference they made, and your organization’s goals for the new year. It doesn’t have to be an extensive, high-design piece – a simple double-sided one-pager can effectively highlight your key achievements. Pro tip: use info graphics!
4. Set Clear Priorities for the New Year
Once year-end activities are settled, turn your focus to planning for the year ahead. Use fresh data from your reports to inform your strategy. What will be your fundraising priorities for the new fiscal year? Which donor segments or grant opportunities are most promising? This is a great time to engage your board of directors in the strategic planning process. Their input can help shape your 2025 priorities and ensure everyone is aligned.
5. Tidy Up Your Donor Database
A well-maintained donor database is your nonprofit’s lifeline. Use this start of the new year to ensure that all data is up-to-date, including contact information, donation records and any notes on communication preferences. Start the year with a database that’s accurate and ready for action by cleaning up duplicates, archiving inactive records and enhancing donor profiles with relevant notes.
6. Evaluate Your Fundraising Systems
This is also an excellent time to audit your fundraising systems and processes. Is your donor management system still meeting your needs? Are there new tools or technologies that can streamline your efforts? Assess how well fundraising and donor engagement systems are working for your team and whether any adjustments are needed. Set aside time for staff training on your donor management tools. This ensures everyone is using the system effectively and consistently.
7. Prepare for Early Campaigns
You might feel like you’re just coming off year-end fundraising, but now is the perfect time to start planning your campaigns for the new year. Whether it’s a spring fundraiser or preparing for National Volunteer Week, updating your fundraising calendar helps to keep you on track throughout the year. Set quarterly fundraising goals and evaluate progress regularly to stay agile and adjust strategies as needed.
Remember, closing out one year and gearing up for the next can feel overwhelming, but with careful planning and organization, your nonprofit can start the fiscal year with a solid foundation. At The Dennis Group Inc., we specialize in helping nonprofits streamline their processes, maximize donor engagement and plan strategically for the future. Whether you need assistance with year-end reconciliation or guidance on how to make 2025 your most successful year yet, we’re here to help.
Ready to ensure a smooth fiscal transition and boost your fundraising results? Contact us to discuss how we can support your nonprofit’s goals this year.
Recent Comments