Lost donations due to donors’ inability to claim deductions when substantiation is missing or incorrect

Although each individual donor is small, uncorrected substantiation for donors giving $250+ can collectively drive 5–10% attrition in this donor band; for an annual fund generating $500,000 from small donors, this can conservatively translate into $25,000–$50,000 in lost renewal and upgrade revenue in following years, plus staff rework time. • Loss of renewal or downgrade of sponsorships when corporate partners cannot confidently claim deductions or face audit questions, putting an estimated 5–15% of corporate sponsorship and event revenue at risk annually; for $1M in sponsorships this can mean $50,000–$150,000 in recurring revenue exposure. • Lost donations when high-value individual donors and foundation contacts cannot substantiate their deductions and either reduce or stop giving in subsequent years, putting an estimated 5–15% of major-gift and event revenue at risk annually for affected donors (often tens or hundreds of thousands of dollars per year for a mid-sized shop).

Grant writer and development staff retroactively rebuild sponsorship records using old sponsorship decks, email threads, event budgets, and spreadsheets to estimate the fair market value of benefits (tickets, tables, branding, ads), then craft custom letters in Word or email to satisfy corporate tax and audit requirements. • Grant writer and development staff scramble to reconstruct donor giving and benefits manually, stitching together acknowledgment letters in Word, queries from the CRM, Excel reconciliation sheets, email threads with events staff, and sometimes direct calls to the donor or their advisor to confirm what was given and what benefits were received. • The Annual Fund Manager manually compiles gift and benefit details from the CRM, event platforms, and emails into Excel and Word templates, cross-checks benefit values by searching past files or the web, then individually edits and emails or mails acknowledgment letters, often tracking which donors still need compliant receipts in personal spreadsheets or notes.