Batching Gifts, Lockbox and Who Enters Gifts in RE

Corinne Sheppard 2

Ok, this is my first post so bear with me!  Currently, our Finance Office enters all of our gifts into RE.  Only one person is able to enter gifts (also problematic when there are vacations and/or absences) and the majority of gift transactions are received via a lockbox.  This is quite challenging because Development isn't aware gifts have been received until they are already entered into RE.  For organizations that use a lockbox, is it required that someone in your Finance/Business Office download check images received via lockbox? I've been told that it's a control issue but I'm trying to verify that statement.  I'm used to receiving checks by mail, having one person open and batch gifts, then have a different person deposit via remote capture, then a third person enter the gift.  



Second, the Finance processor doesn't  separate incoming gifts according to gift type or gift amount.  Instead, the processor will just put all gifts received during a particular day into one large batch so the daily lockbox totals match each batch.  This can be problemmatic when there is a gift requiring follow up causing the entire batch to be held up (including large donations).  I also am concerned that without a batch template for cash gifts, one for pledges, one for stock gifts that things can get overlooked and cause errors.  Not to mention the difficulty with generating receipt/acknowledgement letters of all shapes and sizes in each batch.  Are there any best practice guidelines available for me to reference on this?



Third, I've never worked in such a decentralized gift processing system where Finance does gift entry instead of Development.  Can anyone share with me ideas on how to help Development to have more (if not all control) over gift processing in RE?



Please feel free to offer any advice or insight.  It's completely new for me to work in a system where Development does not control and can't recommend standard gift processing practices.

Joshua Bekerman bCLO bCRE

It certainly sounds like a "control issue" for someone.    Everywhere I have been the development department has been responsible for entering gifts into RE. As you mentioned there are plenty of issues with someone outside the development department entering gifts.  How are they supposed to know anything about how the gifts are supposed to be entered (i.e. fund codes).  So for your first question, no, it is not required that someone in Finance download lockbox images and enter gifts.  There are certainly ways to have the same "control" measures in place if someone in development were entering the gifts.  It might even be better that development enter the gifts, as it might actually be less control for someone enter the gifts while also reconciling and having access to the bank deposits and statements.



Your second paragraph brings up a few issues.  Your concern about separating gifts by type or amount might be an indication that you should look at your post-gift entry processes instead.  For gifts requiring followup such as finding out the correct fund code we use what's we call a "suspense account" fund that is just a place holder.  The batch and gift get entered and posted to FE, and we change the fund code when we find out the correct one.  This way the entire batch doesn't get held up waiting for one gift. 



Does your lockbox have a limit as to how many gifts they "batch" together?  We have a limit of 60 gifts per lockbox "batch" and each batch is a separate deposit.  This way we can reconcile back to our deposits per RE batch. 



We don't separate by gift type as pledge and stock gifts do not go to our lockbox.



We also do not run acknowledgement letters based on batch.  We run letters almost daily and the process is basically automated using the functionality built into RE.  So one acknowledgement letter run/pull can include gifts from multiple batches, usually everything that has been entered since the last ack letter pull.



For your third paragraph, you'll probably need the support of your development leadership to make any improvements, especially when Finance claims it's a control issue.  As you have already started by posting here, gather as much information you can as to why it would be more efficient and effective for everyone (development AND finance) for development to handle gift entry.  Be sure to highlight how it would also save your organization money.  Then present it to leadership and get the ball rolling.  You might also have to get your auditors involved and have them confirm that there wouldn't be any control issues with development doing gift entry.



Good luck!

Josh

Rob Crenshaw

Goodness, I'm not sure where to start, Corinne! The fact that your Finance office has exclusive control over gifts is alarming to me for both audit control and basic development data reasons. Who has authorized this process - someone in Development or Administration or Finance? Most nonprofts I've worked with have a clear separation of fiscal duties, such as bank deposit reconciliation and accounts receivable/payable, from development duties, which are donor tracking and purpose designation. If gifts are not being coded correctly (or at all) to their proper constituents and purposes, especially lockbox gifts with minimal info available to begin with, I'm not sure how your development department can even do its job. We also use a lockbox service and our gift entry team directly accesses check and remit images and data via a dedicated web portal, as there is very robust security in place to prevent unauthorized staff from getting access to PCI-protected data. And unless you process primarily credit cards, working off check images should not be an obstacle to getting access for dedicated gift processing staff in terms of PCI-compliance. Most mid-sized and larger nonprofits have separate departments that own various levels of control over gift flow; I don't know why it should be any different at your agency, short of executive managers who either don't trust others or aren't familiar with best practices at other institutions. 



I would also bring up a concern about major gift donors not getting the proper recognition they deserve - nothing ticks off a major donor like not being recognized correctly. As anyone who has done gift processing for more than a day knows, there are a lot of things to consider and deduce when you're trying to properly code and acknowledge a gift. As for daily deposits not matchin, in my experience, this is one of the main reasons financial departments don't like anyone else entering gifts - something they are often guilty of perpetuating themselves. Check out http://www.advserv.org/ (AASP's website) for best practices - and I recommend you have a serious talk with your Director of Development and express these concerns. Mis-coding a pledge or major gift can be a major problem down the line, and one that your finance people should be eager to avoid.

JoAnn Strommen

Corinne,

It sounds like your org has not realized the role of a development department/staff and how the two work together.  I'm guessing years ago most orgs operated with finance handling donations and you still are.   To me it sounds like you have the separation of duties between people as recommended by someone/auditors along the way but it's all among finance staff.  But it's probably time to re-evaluate.  Making a change to development processing/entering gifts in RE will most likely even need some re-write of job descriptions.  (Move the person entering gifts in RE to development staff .)



I don't work a lock-box but do handle all types of gift entry.  While I have batch templates for gifts and one for pledges, RE can easily handle it if I put a few pledges in with my gifts on a slow day.  Correct data entry and filters for letters/receipts ensure everything's entered / acknowledged correctly. 



As the others posted I agree that gift entry by development is key to donors getting proper recognition and record keeping.

Best wishes on changing your org's system.

Katherine Popowich

The Organization I work for has the Finance Department enter in the batches etc... however we work with development to ensure accuracy. That includes using Barcodes for almost all of our mail and there is no barcode to be had then we will ask development to add an appeal to the donor account if we are aware something is coming in this way we will be able to ensure that that gift will go to the proper coding. Doing that has saved a lot of time and hassle for development as they are able to be out talking with donors and not have to worry so much of the day to day process. You can also have development add themselves as solicitors to larger donor accounts so that they can monitor those accounts a little more closly to ensure that any gifts coming into those accounts get coded properly.



As for your second point that really does need to be seperated it does truly make the job more onerous at the very least you can seperate the pledges etc.. from the cash/cheque donations. 

Nicole S

I think you've already gotten some good answers.  I want to say that I agree with most everything said.



I am not terribly familier with lockboxes since I have never personally used this system.  But I would imagine that someone in development could download the images or whatever and work from there.  Our finance office handles all the money and we work off copies that are later filed.  And even in our small close office, I can't imagine that finance would know what to do with each gift without guidance -- appeals, letter codes, soft credits, etc. 



Whether you seperate the batches or not depends.  I have used both procedures and with proper batch set-up and coding, it hasn't been a problem.  Letters are easy if you use letter codes and "if, then, else..."



I would make sure finance knows that it can be easier for everyone in the long-run, especially if a lot of time is taken up correcting errors.  And make sure that you have accurate reporting for them.  Batch commit, validation and fund performance analysis have been most useful places to start for me.



If they never go for it -- I would at the very least make sure that the person entering gifts shoots development a daily email when the batch is committed so that you know you can start merging letters.  Or suggest that she enter everything and let someone in development review the batch before it is committed to look for errors.