How to best handle donations for a non-profit in GnuCash

Question

I am not new to GnuCash, but have just been made accountant for a new non-profit. The law states that we have to mail tax-beneficial donation-confirmations after each year to all donors.

So I need to track for each donor all their donations during each year.

I cannot make separate accounts for each donor, since we are using the account structures to distinguish our different help-projects that the NGO operates. So having seven projects and twenty donors would force me to drown in accounts. Even if each donor would only give to one or two projects, the accounts-hierarchy would become very crowded.

I guess that I could best use the business features and assign a customer-number to each donor. (We sell them "what the NGO does (good works) and they "pay" in cash.)

I find about each new donation from our bank statements.

This is my main question: I have found how to enter a "payment" for a customer, but only if I first make an "invoice". I have learnt how to make dummy-invoices for each donation (after I find it, and I date it on the same day). But it feels clumsy. Is there a better, more elegant way to enter donations into GnuCash (without dummy invoices) and assign each to the inbuilt customer-feature please?

Update: The first answer by @Greg Schmidt has inspired me to do more research:

I like keeping the descriptions of each transaction well standardized to have efficiency and automagic when entering. So I like using the "remarks" (in German GUI "Bemerkungen") or second lines for individual notes.

I just found that there is a powerful search feature in GnuCash. I could use a donor-number system with unique tags like d#0001 in the remarks. Rather than trying to keep a second database all year, I would only have to run three searches at the end of each year for the only three accounts where I enter donations (in three different currencies). Some donors only give once per year and nobody will (probably) give very often, so a very simple spread-sheet and then some mail-merge for the confirmation letters would do.

All I would need during the year is a shortcut to my donors spread-sheet to open on my second monitor, so that I can quickly look up donor numbers or assign a new number to any new donor.

What do you think? Is this too simple? Anything I overlooked? Any known issues with the search feature?

If anybody is already using remarks to create some extra "features", I would gladly read and learn details and experiences. And give points of appreciation of course.

Answer 1

One option is to use a separate database to record the individual amounts contributed by specific donors, and use GnuCash to record the amalgamated effect of the donations. So if 3 donors donated $10,000 each next Monday, you might record one entry of $30,000 income in GnuCash.

In your separate database, you record the individual $10,000 payments, and who made them, and when. Your separate database may, or may not, be an Excel spreadsheet.

Of course, there are a number of drawbacks to this approach, starting with the fact that you're now running two distinct systems to record all the details of a group of financial transactions, and you will need to keep reconciling the two systems to keep them in step. And Excel spreadsheets, or LibreOffice databases, and similar systems are quite easy to accidentally delete, or be corrupted by an inexperienced "helper".

But it would avoid the complication of trying to use GnuCash to record something that it's not ideally suited for in your instance.

Answer 2

Since you're asking the question in more than one format, I'll try to give you the heads up,

Making dummy invoices will double the work and mistakes, it's better to let the customers fill an online form that gets edited/printed anytime by you, for that you either use google tools or a project/client management system of your own called CRM's, you can find ones made by GNU or other free open source scripts that you most times install as web pages but not a software, then embed it to your website somehow, that's web development work.

Check this list of free online software that you can install, most of them are licensed by GNU license which is the father of GnuCash, you can see their demos too. Link : https://www.softaculous.com/apps/projectman

In terms of filtering the donors and amount and times of donation you can use word tags, colors and in an extra table without having to create a different database. Making a new DB will take lots of time to manage when you don't have to. This is difficult in concept not in application. Some issues are fixed with thought not with tools.

What do you want to obtain here ? accuracy or time ?