Soft Credits

When a donor gives, it is important that we give "credit" to the donor for the gift that is given. There are a few common ways to account for the donation.

 

A hard credit in fundraising is a gift that is directly credited to the donor making the gift. For example, a donor gives $10 to an email campaign, then that would be a hard credit to the donor in the donor management system. 

 

But what if that email campaign was run as part of a matching gift promotion and the donor gave to increase their impact to your organization? $10 would be from the donor (the hard credit), but there would also be $10 from the sponsor who would be matching That sponsor would not have given the gift if the original donor did not give $10. The sponsor gift would be considered a soft credit and the "credit" for the second $10 would be awarded the donor who gave to the email campaign. The same would apply if a company check or credit card is used to give a donation - the hard credit would go to the company, but the soft credit would go to the individual using the check or credit card. 

 

Soft credits are used to assign value to someone other than the source of the payment. This commonly happens when a gift originates from a business, Donor-Advised Fund (DAF), estate, or other organization—but is given on behalf of someone else. Soft crediting helps to ensure that the individual motivating or initiating the non-individual gift can be correctly attributed and thanked. Soft credits can also be used to split or share attribution between household members, ensuring that both spouses share credit for a gift. Soft credits are also used to track the matched donor recipient for matching gift funds as mentioned above. Each organization has its own rules around both householding and soft crediting that affect when and how these credits are assigned and used as well as how they interact with reporting and tax receipting.

 

There are also different ways to assign soft credits to donors:

 

For analysis, we typically prefer following the soft credit when possible unless your organization has a specific reason to require the use of hard credits. We find this gives fuller picture of donor contributions, even when mechanisms such as Donor-Advised Funds or such are involved (and doesn't give a hard credit to that DAF). Soft credits are especially helpful in properly categorizing midlevel and major donors appropriately, meaning we won't treat a major donor like a non-major donor. We also believe that soft credits assist with more accurate segmenting and suppressing donors based on their overall activity, not just the one-to-one relationship that hard credits provide. 

 

Avid supports both hard and soft credit models. With NXT and other CRMs, our data models handle both full and partial soft credits by creating an additional record of the remainder amount allocated to the hard credit recipient, as well as duplicate soft credits (e.g. 100% allocated to each spouse). Regardless of the crediting model, we won’t ever allow the combined soft credit amount to exceed the total hard credit amount. 

 

You are welcome to include both the hard and soft credit details when sending over your CRM data by file upload, but if you do please ensure to include separate amount fields for hard/total and soft credits for those records if partial soft-crediting is used.