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Refunding a Donation

Nonprofit organizations raise funds through a variety of methods. This can range from silent auctions to simple online donation forms integrated with your fundraising software. Regardless of how your specific organization works, though, you may one day run into a donor who requests a refund. This could happen for a number of reasons, and there’s no “one-size-fits-all” answer, but here are a few things you should know.

When Are Refunds Appropriate?

The first thing to remember is that not every donor refund request is created equally. There’s a huge difference between someone asking for a refund due to an event being cancelled and someone who simply got mad over an executive’s private stance on a given topic.

If you’re hosting a fundraiser that got canceled, it’s always appropriate to offer refunds. If an event is called off due to weather, though, you could also get by with honoring the tickets on a future date. In essence, if someone paid for something that they’ll no longer get, honoring a refund request is the obvious answer.

Dealing With Arbitrary Requests

Unfortunately, not every refund request will be appropriate. Some donors may get mad at the organization or even a single individual within the nonprofit. In these situations, it’s important to consider both the factual and emotional justifications behind the request. Before making a decision, you should also speak to the board and not make a rash decision.

This is important since bad publicity can hurt the organization. Do not let this fact, however, force your hand. If a refund request is truly arbitrary, it’s likely that other donors will side with the nonprofit. This should always be taken on a case-by-case basis, and handling each situation individually will ensure you’re making the best decision possible.

Proactive Approach to Refund Requests

The old saying “an ounce of prevention is worth a pound of the cure” holds true in fundraising as much as anywhere else. Because of this, the best proactive measure your organization can take is to have a written policy regarding refund requests.

This should be on printed materials and even online before your fundraising software processes a donation. Additionally, whatever policy you choose should have a time limit clause. This will ensure that no one attempts to demand a refund one year after the fact just because he doesn’t like a future decision undertaken by the board.

Dealing with a refund-requesting donor is certainly an awkward situation, but it’s something we’ll all likely experience at some point. The most important thing is to handle each situation individually and delicately. There’s no reason a single refund request has to make waves throughout the organization.

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