How to track donations effectively

If you work at a nonprofit or healthcare organization, you already know donations keep your mission moving forward. But collecting funds is only half the story — tracking them effectively is just as important.

Accurate donation tracking ensures transparency, strengthens donor trust, and demonstrates accountability to your board, funders, and the public. It’s also critical for tax purposes — both for your organization’s filings and for donors who expect receipts for their deductible contributions.

So what counts as a “donation”? The answer goes beyond cash. Donations can be in-kind gifts like medical supplies, securities such as stock shares, or even professional services. Each type has unique requirements for documentation, valuation, and reporting.

Let’s explore the different types of donations you may encounter and the best practices for recording them — with a special look at HIPAA considerations for healthcare fundraisers.

Types of donations & what you need to record

Not all donations are created equal. Some gifts are as simple as a $20 bill dropped into a collection box, while others involve stock transfers or real estate deeds. To stay transparent, you’ll need to capture slightly different details depending on the gift type. Documenting correctly not only satisfies IRS rules but also builds donor trust and makes year-end reporting much smoother.

Here are the main categories you’re likely to encounter:

1. Cash donations

Definition: Monetary gifts given by cash, check, wire transfer, or credit card.

Examples: $50 check at a fundraiser, $1,000 online credit card donation, or a monthly ACH transfer.

What to record:

• Donor’s full name and contact details
• Date received
• Amount donated
• Payment method (cash, check, credit card, bank transfer, etc.)
• Receipt or transaction ID number
  

Compliance note: For any single donation of $250 or more, the IRS requires a written acknowledgment letter that specifies whether any goods or services were provided in return.

Tip: Even for smaller gifts, sending a quick acknowledgment email reinforces donor relationships.

2. In-kind donations (goods)

Definition: Tangible items donated instead of money.

Examples: Food pantry donations, donated office furniture, school supplies for students, or laptops for a clinic.

What to record:

• Detailed description of items (e.g., “10 Dell laptops, gently used”)
• Quantity donated
• Fair market value (FMV) at the time of donation
• Donor information (name, contact details)
• How the items were distributed or used (e.g., “donated to after-school program”)

Compliance note: Donors are responsible for valuing their gifts for tax deductions. Your role is to provide a receipt with a description, but not assign a dollar amount unless an independent appraisal is required.

Tip: Include photos or signed delivery slips for in-kind gifts. This helps with transparency and internal audits.

3. Services

Definition: Professional expertise or labor donated to your organization.

Examples: A lawyer drafting incorporation documents pro bono, a doctor volunteering at a free health clinic, or a graphic designer creating a campaign logo.

What to record:

• Type of service provided
• Donor’s name and professional details
• Date and number of hours donated
• Estimated fair market value (if measurable)
• Purpose or project supported
  

Compliance note: IRS rules do not allow deductions for the value of donated services, only for out-of-pocket expenses. Still, nonprofits should track services for internal reporting and to recognize volunteer contributions.

Tip: Record services alongside monetary gifts in your donor database — recognizing time and skills builds loyalty, even if the IRS doesn’t count it.

4. Securities & investments

• Definition: Donations of financial assets like stocks, bonds, or mutual funds.
• Examples: A donor transfers 100 shares of stock to your nonprofit’s brokerage account.
• What to record:
  
  • Name and type of security
  • Number of shares or units transferred
  • Date of transfer
  • Fair market value on transfer date
  • Donor details and brokerage information
  • Whether securities were sold immediately or held
    
• Compliance note: These gifts are often tax-efficient for donors, but nonprofits must document the valuation carefully. If sold, note proceeds separately in financial reports.
  
• Tip: Work with your finance team or investment advisor to set clear policies for accepting securities.
  

5. Recurring gifts

Definition: Ongoing donations set up on a schedule, usually monthly or annually.

Examples: A $25/month donation through your website or a $500 annual pledge via ACH.

What to record:

• Donor’s information and payment method
• Gift amount
• Frequency (monthly, quarterly, annually)
• Schedule (e.g., 15th of each month)
• Cancellations or changes in commitment
  

Compliance note: Recurring donations simplify tax documentation because year-end summaries can be issued in bulk.

Tip: Segment recurring donors in your CRM for targeted stewardship. These donors are among your most loyal supporters.

6. Noncash assets

Definition: Large or high-value physical assets that aren’t typical in-kind gifts.

Examples: Real estate, cars, boats, artwork, or equipment.

What to record:

• Full description of asset
• Donor’s details
• Fair market value (FMV) determined by appraisal if necessary
• Legal transfer documents (title, deed, or registration)
• Date of transfer and any associated costs (insurance, storage, taxes)
  

Compliance note: Donations of property worth over $5,000 usually require a qualified appraisal for IRS reporting. For vehicles, IRS Form 1098-C is often required.

Tip: Have a written gift acceptance policy that explains what types of assets you will and won’t accept. Some assets come with hidden costs (like property taxes or maintenance).

Grouping for clarity

For internal reporting, it helps to think of donations as:

• Tangible donations: Cash, goods, securities, real estate.
• Intangible donations: Services, recurring commitments.

How to track your donations

Once you know what you need to record, the next step is setting up a tracking system. Nonprofits generally start with manual methods and then graduate to automated solutions as they grow.

Manual tracking (Excel or Google Sheets)

• Create a simple ledger with columns for:
  
  • Date
  • Donor name
  • Amount/type
  • Purpose
  • Receipt sent (Y/N)
    
• Keep scanned copies of receipts and acknowledgments in secure folders.
• Works well for smaller organizations but can get unwieldy as donations scale.
  

Donor management software (CRM)

• Automates acknowledgment letters, tax receipts, and year-end summaries.
• Generates compliance-ready reports for your board or IRS filings.
• Integrates with email marketing services and payment processors to streamline workflows.
  

A good starting point for nonprofits is using Jotform Tables CRM, which combines form submissions with easy-to-use donor tracking tables. You can also customize CRM templates for donor records, pledge tracking, or campaign monitoring.

HIPAA considerations in donation tracking

For healthcare-related nonprofits, donation tracking gets trickier because of HIPAA (Health Insurance Portability and Accountability Act). While HIPAA primarily governs patient health information, donor data often overlaps with patient records.

Here are the best practices:

• Separate PHI and donor data. Never store protected health information (PHI) in your donor tracking system unless absolutely necessary.
• Use encrypted, secure storage. Platforms should offer SSL encryption, access controls, and regular security audits.
• Maintain audit logs. Track who accessed donor data, when, and for what purpose.
• Get explicit consent. If donors are also patients, obtain consent before linking donation records to medical files.
• Consult compliance/legal teams. Before adopting new systems or integrations, confirm alignment with HIPAA standards.

For a healthcare nonprofit, keeping fundraising workflows HIPAA-friendly protects both your donors and your organization from costly penalties.

Streamline HIPAA-friendly donation tracking with Jotform

Jotform makes it easier to track donations while keeping compliance top of mind.

Here’s how:

• Secure data collection: HIPAA-friendly form builder ensures encrypted, compliant donation collection.
• Nonprofit pricing: Discounted plans make robust tools affordable for organizations of all sizes.
• Donation form templates: Choose from 500+ ready-to-use forms, customizable for cash, in-kind, or recurring gifts.
• Automated features: Generate receipts instantly, capture in-kind FMV at intake, and send donor thank-you notes automatically.
• Tables and workflows: Use Jotform Tables as a donor database and workflow builder to automate approvals, follow-ups, or reconciliations.
• Healthcare edge: With Jotform’s HIPAA compliance feature, healthcare fundraisers can confidently separate patient and donor records while streamlining reporting.

And if you’re just starting your nonprofit journey, here’s a guide on how to start a nonprofit with practical steps to get you up and running.

Jotform also provides dedicated donation tools to raise money online, covering everything from payment processing to donor acknowledgment workflows.

Your next steps in donation tracking

Tracking donations isn’t just an administrative task — it’s the foundation of donor trust, organizational credibility, and financial compliance.

To recap:

• Record all donation types thoroughly (cash, in-kind, services, securities, recurring gifts, assets).
• Start with manual systems but plan to upgrade to CRMs for automation and scalability.
• For healthcare-related fundraising, follow HIPAA best practices: separate PHI, encrypt storage, and always get consent.
• Leverage Jotform’s nonprofit-friendly ecosystem to simplify the entire process, from collection to compliance.

Quick wins you can implement this month:

• Standardize the data fields you capture for every donation.
• Automate receipts and year-end summaries.
• Reconcile donations monthly with bank or payment processor records.
  

With the right system in place, you’ll not only meet compliance requirements but also show donors that their generosity is being stewarded responsibly. That transparency leads to stronger relationships — and ultimately, more sustainable fundraising for your mission.