To add a donation given in honor or in memory of someone, you will need to first add the honoraria or memorial to GiftWorks.
Click on Settings/Fields, Lists, and More/Change GiftWorks Built-In Fields/Click on Manage Honoraria/Memorials
Enter in the name and title of the honorarium or memorial, as well as any donors to notify You can also add an honorarium or memorial from within the add a donation process. However, doing it that way will not allow you to add the donor to notify. You would need to go back to Settings and edit the honorarium or memorial from there to add that information.