Estimating pledge write offs for an upcoming fiscal year

Sandi Chambers

I have been asked by our business office to "run a report" that estimates the dollar amount of pledges that will be written off in the next fiscal year. We've never done this and I don't see a way to do that in RE. We generally write off pledges quarterly and use the guideline of no payment within two years.  Does anyone on this forum prepare such an estimate for their business office and if so, how do you calculate it?

Melissa Graves 2

Sandi Chambers:

I have been asked by our business office to "run a report" that estimates the dollar amount of pledges that will be written off in the next fiscal year. We've never done this and I don't see a way to do that in RE. We generally write off pledges quarterly and use the guideline of no payment within two years.  Does anyone on this forum prepare such an estimate for their business office and if so, how do you calculate it?

This is the most absurd thing I have ever heard of. Since this is not specific to Blackbaud users you may want to ask this on the gift processing/dabatbase managers forum at www.fundsvcs.org and see if anyone else has ever yeard of this before.

Joshua Bekerman bCLO bCRE

Melissa Graves:
This is the most absurd thing I have ever heard of. Since this is not specific to Blackbaud users you may want to ask this on the gift processing/dabatbase managers forum at www.fundsvcs.org and see if anyone else has ever yeard of this before.

I've never heard of this either.  Is it common at your organization to write off pledges?  Maybe that's the real issue that should be addressed, and also consider if the pledges should be entered in the first place.  Not sure how or why you would ever be able to estimate or guess who won't be paying their pledges other than asking the donor directly (which then becomes a confirmation and not an estimate).  I'm not an accountant and I don't play one on tv, but if anything maybe they can look at their past pledge write off rate or percentage and "estimate" based on that.  Also asking for this information a year out (next FY?) is really stretching it.

Melissa Graves 2

Josh Bekerman:

I've never heard of this either.  Is it common at your organization to write off pledges?  Maybe that's the real issue that should be addressed, and also consider if the pledges should be entered in the first place.  Not sure how or why you would ever be able to estimate or guess who won't be paying their pledges other than asking the donor directly (which then becomes a confirmation and not an estimate).  I'm not an accountant and I don't play one on tv, but if anything maybe they can look at their past pledge write off rate or percentage and "estimate" based on that.  Also asking for this information a year out (next FY?) is really stretching it.

It would be impossible unless they are really asking you to report who is at risk for being written off in June (assuming your FY is July/June) before next FY. That I could see producing for them - who has not made payments for 21+ months and if they do not make it in the next 3 they will be written off.

I think you need to get clarity on what they are really asking for and how they want you to calculate this. If they really mean next FY then they need to tell you what "evidence" they want you to use to determine that someone will lapse. If they have a crystal ball out there somewhere I would love to see it. As of today someone who will be written off next June is someone who is only 9 months past their last payment. How can you tell that 15 months from now they will have lapsed?

JoAnn Strommen

Sandi Chambers:

I have been asked by our business office to "run a report" that estimates the dollar amount of pledges that will be written off in the next fiscal year. We've never done this and I don't see a way to do that in RE. We generally write off pledges quarterly and use the guideline of no payment within two years.  Does anyone on this forum prepare such an estimate for their business office and if so, how do you calculate it?

Dittos that this is difficult to get an accurate $.  Several thoughts...

This could vary greatly depending on the orgs procedure for securing and entering pledges.  Are you talking about a phone-a-thon to alumni or pledges made face to face with a signed pledge form?

What is follow up when someone becomes past due?  Is there any?  If there's no contact and they're over a year past due that's not good.  Our auditing standards don't carry unpaid pledge amounts unless we know there's a reason and payment will be coming.

Are you talking about staff with payroll pledges that are no longer employed? 

Is this an annual campaign where you have a history in RE that you can look at or is this a capital campaign without a history?  Our consultant for our first major capital campaign that I worked with had a percentage that he expected would be written off.  Wasn't very large but was part of planning for capital campaign.  For our annual campaign, figure is not significant enough that we plan for it. 

For a really, really rough estimate (who can really predict the upcoming economics with certainty), I'd start with the write off history in RE.  There's a report that lists write offs.  And post on fundsvcs as Melissa suggested.

Just some thoughts...

Lisette Depew-Kubie

Sandi Chambers:

I have been asked by our business office to "run a report" that estimates the dollar amount of pledges that will be written off in the next fiscal year. We've never done this and I don't see a way to do that in RE. We generally write off pledges quarterly and use the guideline of no payment within two years.  Does anyone on this forum prepare such an estimate for their business office and if so, how do you calculate it?

In my nearly 25 yrs of non profit database managing, I've NEVER heard of such a thing. This is absurd. Are we supposed to be psychic now? The only way we write off a pledge balance is after a very long and thorough process to determine - directly from the donor or their heirs or someone "officially" speaking for the donor - that they are not going to be able to honor their pledge. Your business office sounds a bit wacky to me.... just sayin'........