The recommended way to track soft credits is fairly simple.
First, create a Donation Type of “Soft Credit”
Maintenance > Site Setup > Field and Screen Customization > DonorSnap Site Lookups.
Record the donation as normal under the appropriate Contact who made the donation.
THEN you would record a second Donation using the “Soft Credit” code on the individuals account who may have directed the money your way. Most organizations will also use the comments to indicatewhere the soft credit came from.
By using one specific Donation Type of Soft Credit, you can then accurately run hard dollar donation received reports by excluding Donation Type Soft Credit from the reports.
What exactly is a soft credit?
A soft credit is a way to acknowledge all parties involved in making a decision to donate, not just the donor that physically gives the gift. A hard credit would acknowledge the actual donor who gave the gift. A soft credit would not be entitled to a tax deduction. Here are a few example scenarios that you might encounter:
- Each member of the board of directors has fundraising goals for the year. When they solicit a donation from another entity, a soft credit is added to track their goal progress.
- Gifts made through an intermediary nonprofit organization such as United Way.
- A company makes a donation to the charity of your choice after a sale.
- In lieu of wedding/birthday/shower gifts, make a donation to one of three charities.
- When tracking spouse records separately a soft credit could be applied in one account and a hard credit in the other