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Currently, we have a custom profile field on our contribution page named: "Designation" which user need to have, but also we have contributors that make more than one donation and therefore the designation they selected the first time may not be the same the second time they donate.

Can we have a contact created not based on unique email rather based on other fields? because a donor might use the same email id when making the contributions.

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Perhaps the answer is to attach the custom field to Contributions rather than Contacts? This way the same contact could make multiple contributions and designate on each contribution (rather than a field associated with their contact record directly) what the designation is.

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Yes you can create user based on any field by ignoring email. you can find the option in

Contacts -> Find and Merge Duplicate contacts

The below link will explain more regarding the issue http://wiki.civicrm.org/confluence/display/CRMDOC/Find+and+Merge+Duplicate+Contacts

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In order to assure a new contact is created when the form is completed you want to create an unsupervised rule that cannot reach the threshold to mark as duplicate. This will only work with anonymous visitors (those not logged in). If a user is logged in their information will be updated. Attaching the custom field to the contribution as suggested might be a better approach. You can then get a comprehensive history of contact contributions.

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