A soft credit is when a constituent makes a contribution, but another constituent, or multiple constituents, may have influenced, participated, or solicited the contribution. Only one constituent can be linked directly to the gift, and this constituent is the one who would be eligible for the IRS tax deduction. Soft credits are not duplicate gift entries, they are links back to the original gift and are shown separately on the Gifts grid.

 Soft credits are often used when there are contributions from:

• couples when each spouse/partner has their own record.
• business where you would like to credit the business owner or executive for their involvement.
• donor-advised funds where a donor directs the fund manager to provide a grant to your organization.
• a donor that is solicited by a board member or another donor and you wish to recognize and track those solicitations.
• a company that collect donations from their employees to contribute to your organization.

** If employees contribute to a company's foundation and that foundation makes a gift to your organization, then it is appropriate to record the gift from the company (or the company's foundation) and record soft credits for each employee. The employees would receive a tax letter from their company's foundation.They would receive a letter thanking them for their participation (not an IRS tax letter) from your organization.

** If the company is simply collecting the money and giving it directly to your organization, then it would be more appropriate to enter the gift for each employee and soft credit the company. The letter to the company would thank them for their involvement/participation in soliciting the gifts on your behalf. The employees receive an IRS tax letter from your organization.

Soft credits can be set up to happen automatically by creating a relationship between the two constituents. You can set up an auto soft credit to happen only when one constituent enters a gift, or when either enters a gift by ensuring the button is marked "yes" on both relationship records. With this feature activated, it is not required to add their name to the soft credits when entering a gift, it will happen automatically as soon as the transaction is recorded.