But wait a minute, I’m a writer, what do I have anything to do with gift management?? Doesn’t Patreon do that for me? And what exactly is “gift management”?
Patreon has the tools for relationship management and will be your gift processor, but the majority of gift management will fall to you.
I am a former professional Gifts Administrator. While I’m not moonlighting as a fledging Flintlock Fantasy Writer or spending too much time on social media, I spend my day processing checks, cash, stock, wires, and matching gifts for non-profits. Understanding where your money comes from, how to process it, and how to acknowledge those gifts can mean the success or failure of a Campaign.
While this series focuses on Patreon, I encourage you to diversify your income. Diversifying your income isn’t a new concept, especially for freelancers, but when you’re setting up your financial plan and factor it is also important to set up multiple income donation streams as is reasonably viable for your budget. Patreon may collapse tomorrow and with it your Patrons. Actual fundraising does not relay on one funnel of income alone; successful fundraising is a combination of many asks and providing several ways to support.
Diversifying income is key to retaining and obtaining donors. Some donors may only donate in appreciated stock. Some may refuse to sign a pledge and instead donate through a Donor Advised Fund. Some may be so generous as to gift you brand new writing software to write your next novel, which is called a gift-in-kind. And some may only write a check when you ask them nicely. While it is not likely that many of your donors will give like this, the main takeaway is that there are many ways to give that is mutually beneficial to both the donor and the receiver.
A Patreon page may only capture a small percentage of your actual paying audience. Maybe they don’t like Patreon. Maybe they’d rather give money directly to you or send you an emoji transaction on Venmo. Don’t be constricted by one channel. But understanding where your people are and how they would like to be approached, and how they prefer to pay will help you identify your fundraising strategy. However, managing multiple channels at once is a better strategy after you have collected some data and tried running a campaign first.
ACKNOWLEDGE ACKNOWLEDGE ACKNOWLEDGE
When I process a gift I must generate a receipt within twenty-four to forty-eight hours of the gift for tax purposes. A donor acknowledgment letter should also be generated. Patreon will do this for you by confirming a pledge and sending the donor your welcome content.
Too busy creating to thank your donors? Well, you’re dead wrong.
Not only should you thank someone who is supporting you, but building those relationships will help you and your writing career in the long.
Identify the threshold amount where you will go above and beyond to acknowledge a particularly large gift. The rewards section of Patreon will help you manage benefits, however, you must be organized and get them their rewards on time. Timely acknowledgements is crucial, and may even be required by law if you are a non-profit.
Many ways to give, alas, means more taxes to manage. Your donors are not giving to a non-profit and will not receive any tax benefits from your gift. If you are not a 501(c) then you are not required to provide a receipt for your donor. Patreon will provide the receipt for your donor.
However, you must follow all of the 1099 rules (if you are in the US) as stated on Patreon. Diversifying your income will mean you will need to manage several sources of income that may have different rules regarding your taxes. The more you diversify the more you have to manage.
At the end of the day, Patreon is going to help manage the operational side of your gifts from your donors.
- DIVERSIFY: Actual fundraising relies on accepting multiple sources of income
- ACKNOWLEDGE: Acknowledging donors on a timely basis is just as important as your content
- TAXES: Follow all tax laws for all income sources. The more income streams you have the more to manage