One Check from two or more donors

Debra Watford

We receive lots of honor/memorial gifts.  Sometimes we have one check that is given on behalf of more than one person.  Example.. $50 check form Mary Smith and John Doe in honor of Suzie Q. Check has Mary's name on it.  The individuals amount may or may not be listed.  What is the guidelines for posting when it is not clear who gave what?  We post the entire amount to the person on the check and put in notes that it's a split gift and list all names.  This makes it difficult to do acknowledgements.  Any suggestions?

JoAnn Strommen

Debra Watford:

We receive lots of honor/memorial gifts.  Sometimes we have one check that is given on behalf of more than one person.  Example.. $50 check form Mary Smith and John Doe in honor of Suzie Q. Check has Mary's name on it.  The individuals amount may or may not be listed.  What is the guidelines for posting when it is not clear who gave what?  We post the entire amount to the person on the check and put in notes that it's a split gift and list all names.  This makes it difficult to do acknowledgements.  Any suggestions?

 Debra,

I'm assuming that in your example Mary & John are not spouses with differing last names.

I don't know what else you can really do.  To me, the account the check is from is your legal donor regardless of how many people it represents. I can see where it does make it difficult to do acknowledgements. 

Does your org use soft credits - would it cause reporting issues if you SC each of the other people for $0 and ran gift acknowledgement for SC donors that include $0 amounts.  On gift tab uncheck the exclude $0 amount gifts. (Obviously, acknowledgement would not have the amount in it.)  Just trying to think of a way to work around the RE structure.

Melissa Graves 2

Debra Watford:

We receive lots of honor/memorial gifts.  Sometimes we have one check that is given on behalf of more than one person.  Example.. $50 check form Mary Smith and John Doe in honor of Suzie Q. Check has Mary's name on it.  The individuals amount may or may not be listed.  What is the guidelines for posting when it is not clear who gave what?  We post the entire amount to the person on the check and put in notes that it's a split gift and list all names.  This makes it difficult to do acknowledgements.  Any suggestions?

You can only send the receipt to the legal donor - that is the person who sent you the check. Constituents cannot collect donations for your org and deposit them into their own checking accounts and send you a check and preserve the legal donation from those individuals. It is just not allowed and would not pass an IRS audit. They need to send you the cash or checks from each person directly to you.

You can NOT send an acknowledgement (IRS tax ackn) to anyone but the legal donor. So in this case Mary is the legal donor and the only one who can get an acknowledgement. You may want to offer to refund the check and ask her to send you cash or have the individual donors send separate gifts if they want tax receipts.

As far as I know the only time this scenario is allowed to preserve the individual donors is when you go through a legal process of certifying the individual as an "agent" for your organization which you would likely rarely or never do. Most would never do this and if they did it would likely be an employee or board member that they may do it for.

Debra Watford

JoAnn Strommen:

 Debra,

I'm assuming that in your example Mary & John are not spouses with differing last names.

I don't know what else you can really do.  To me, the account the check is from is your legal donor regardless of how many people it represents. I can see where it does make it difficult to do acknowledgements. 

Does your org use soft credits - would it cause reporting issues if you SC each of the other people for $0 and ran gift acknowledgement for SC donors that include $0 amounts.  On gift tab uncheck the exclude $0 amount gifts. (Obviously, acknowledgement would not have the amount in it.)  Just trying to think of a way to work around the RE structure.

Thanks JoAnne and Melissa.  Yes we use soft credits and have done that in the past.  We normally only send one receipt to the donor on the check and list the names of the "additiona" donors somewhere on the receipt.  We list all the names to the family w/o disclosing the amount given, of course.  Thanks!

Debra Watford

Melissa Graves:

You can only send the receipt to the legal donor - that is the person who sent you the check. Constituents cannot collect donations for your org and deposit them into their own checking accounts and send you a check and preserve the legal donation from those individuals. It is just not allowed and would not pass an IRS audit. They need to send you the cash or checks from each person directly to you.

You can NOT send an acknowledgement (IRS tax ackn) to anyone but the legal donor. So in this case Mary is the legal donor and the only one who can get an acknowledgement. You may want to offer to refund the check and ask her to send you cash or have the individual donors send separate gifts if they want tax receipts.

As far as I know the only time this scenario is allowed to preserve the individual donors is when you go through a legal process of certifying the individual as an "agent" for your organization which you would likely rarely or never do. Most would never do this and if they did it would likely be an employee or board member that they may do it for.

Related to this, We recently went into a capital campaign and solicited physicians to make 1-5 year commitments.  We have receive one business check from an individual physicians practice on behalf of one or more physicians (they have 3 phy in this particular office-only two have committed so far!) who have made pledges/gifts from within that office. 

We consider those as "payroll deductions" on the physicians behalf.  We post those checks to the individual physicians donor record, giving them the full tax credit. We normally get a print out of the physicians name and amounts (or if it's just one physician making a payment that month, their name is listed on the check stub). We treat these like our employee campaign gifts where we receive one check on behalf of 4,000 employees!) We use "business check" vs personal check w/ a note in the reference stating the actual check was from the practice.  We do not send a receipt to the practice.  Just wanted to make sure we are handling these correct before we get to far into this!  Thanks!

Melissa Graves 2

Debra Watford:

Related to this, We recently went into a capital campaign and solicited physicians to make 1-5 year commitments.  We have receive one business check from an individual physicians practice on behalf of one or more physicians (they have 3 phy in this particular office-only two have committed so far!) who have made pledges/gifts from within that office. 

We consider those as "payroll deductions" on the physicians behalf.  We post those checks to the individual physicians donor record, giving them the full tax credit. We normally get a print out of the physicians name and amounts (or if it's just one physician making a payment that month, their name is listed on the check stub). We treat these like our employee campaign gifts where we receive one check on behalf of 4,000 employees!) We use "business check" vs personal check w/ a note in the reference stating the actual check was from the practice.  We do not send a receipt to the practice.  Just wanted to make sure we are handling these correct before we get to far into this!  Thanks!

Did you confirm these were, in fact, payroll deductions or did you assume. I would certainly recommend checking.

Debra Watford

Melissa Graves:
Did you confirm these were, in fact, payroll deductions or did you assume. I would certainly recommend checking.

Yes, I've spoken with the Office Manager.  The hard thing is that these particular physicians "own" this practice jointly.. so it does get confusing sometimes! The office manager has confirmed for me that one payment is from one particular Dr. and not from the others (or the practice) and the Dr. requests the tax deduction-personally.  Again, we only mail one receipt. 

Althought I don't want to offend the physician, I have no issues with talking to him if this is not the correct way to handle these type of gifts in the future.  I just want to get off on the right foot!

Melissa Graves 2

Debra Watford:

Yes, I've spoken with the Office Manager.  The hard thing is that these particular physicians "own" this practice jointly.. so it does get confusing sometimes! The office manager has confirmed for me that one payment is from one particular Dr. and not from the others (or the practice) and the Dr. requests the tax deduction-personally.  Again, we only mail one receipt. 

Althought I don't want to offend the physician, I have no issues with talking to him if this is not the correct way to handle these type of gifts in the future.  I just want to get off on the right foot!

Although they "own' the practice - it is a business that files and pays taxes separately from the individual. The doctors must have had this money taken from their paychecks AFTER paying income taxes on it for them to be the legal donors of the money. It is not just something that the business can send from business funds and the Dr. can request to take the tax deduction personally.

Patty Neumeier

Debra Watford:

We receive lots of honor/memorial gifts.  Sometimes we have one check that is given on behalf of more than one person.  Example.. $50 check form Mary Smith and John Doe in honor of Suzie Q. Check has Mary's name on it.  The individuals amount may or may not be listed.  What is the guidelines for posting when it is not clear who gave what?  We post the entire amount to the person on the check and put in notes that it's a split gift and list all names.  This makes it difficult to do acknowledgements.  Any suggestions?

Debra,

Being a hospice we receive lots of these types of donations.  We have set up an attribute called "Additional Named Donors" that we complete in the gift batch.  This field is then brought into the acknowldegement letter to let him/her know who were the additional donors.  But the person on the check is the only one who gets the receipt.  

 

Rebekah Trachsel

Patty Neumeier:

Debra,

Being a hospice we receive lots of these types of donations.  We have set up an attribute called "Additional Named Donors" that we complete in the gift batch.  This field is then brought into the acknowldegement letter to let him/her know who were the additional donors.  But the person on the check is the only one who gets the receipt.  

 

Here's what we do.  The acknowledgment letter (the tax receipt) gets sent to the person who signs the check.  On the tribute card sent to the family, we have a merge field that adds those who contributed to the gift in addition to the person who signs the check.  Sometimes we will get calls from the additional donors saying they want a tax receipt but I explain (sometimes a TON of times) that only the person who is the legal donor can receive this.

Debra Watford

Rebekah :

Here's what we do.  The acknowledgment letter (the tax receipt) gets sent to the person who signs the check.  On the tribute card sent to the family, we have a merge field that adds those who contributed to the gift in addition to the person who signs the check.  Sometimes we will get calls from the additional donors saying they want a tax receipt but I explain (sometimes a TON of times) that only the person who is the legal donor can receive this.

What is the "Merge Field" and where is it located at on RE?  Or do you simply hand type the additional names?

Rebekah Trachsel

Debra Watford:

What is the "Merge Field" and where is it located at on RE?  Or do you simply hand type the additional names?

Within the gift record, you will find an attributes tab.  We named a gift attribute category "Tribute Message 1/2/3." When I enter gifts in a batch, I enter the special message the donor wants to convey to the family and any additional tribute donor names within a gift attribute description.  When running the honor/memorial acknowledgements in RE Mail, one of the fields pulled into our tribute card/letter is this field. Does that make sense?

Dianne Presley

Rebekah :

Within the gift record, you will find an attributes tab.  We named a gift attribute category "Tribute Message 1/2/3." When I enter gifts in a batch, I enter the special message the donor wants to convey to the family and any additional tribute donor names within a gift attribute description.  When running the honor/memorial acknowledgements in RE Mail, one of the fields pulled into our tribute card/letter is this field. Does that make sense?

We also use a gift attribute for names other than the primary addressee.  This makes the names specific to that gift only. In RE Mail (Word) I use an if,then,else statement to pull in the attibute for letters if one exists, otherwise it will pull the primary addressee. 

Aldera Chisholm

Debra Watford:

We receive lots of honor/memorial gifts.  Sometimes we have one check that is given on behalf of more than one person.  Example.. $50 check form Mary Smith and John Doe in honor of Suzie Q. Check has Mary's name on it.  The individuals amount may or may not be listed.  What is the guidelines for posting when it is not clear who gave what?  We post the entire amount to the person on the check and put in notes that it's a split gift and list all names.  This makes it difficult to do acknowledgements.  Any suggestions?

 This may vary for me because I'm in Canada.

We get this quite often at my organization. I checked with Canada Revenue Agency, and they let me know that if I have an accompanying letter from the cheque writer detailing the true donors and their information, I can directly receipt the listed donors. Again, this rule may just be a Cdn one, so I can't speak for US regs.