Best Practices for Inputting Long Term Pledges

Courtney Mazzei

I'm trying to get some feedback on the best way to input a long term pledge - never done it before.



We have a donor who has pledged 10K over the next 5 years to our Annual Fund, one payment each year of 2K before June 30.



What would you all recommend in regards to the data entry and application of each year's 2K payment to each year's Annual Fund? Do I set up each Annual Fund (15-16, 16-17, 17-18, etc.) and create separate 2K pledges in each one? Do I put the full 10K pledge in this year's 14-15 AF with annual installments (if I do this can I apply the installments to future Annual Funds?)?

JoAnn Strommen

The procedure depends to a degree on how your funds are structured in RE, in your accounting software and your reporting needs/expectations.



Is your normal procedure to have a different fund for each fiscal year?  If that's the case, it would probably be best to set up the funds for each year and enter a 2K pledge on each.  We run bills at month end to have in donors' hand by first of month so in your example I would enter an annual gift for each fund wth due date 6/1/XX so donor would get billing and have time to pay in June especially if that's the end of your fiscal year.  



If you enter it all as a pledge for current year and report by fund, the gift will not pull on a report for 2017-18 as the money would be entered for the fund 2015-16.  Yes, you can apply a payment at anytime to a pledge but it will report out for the fund entered on the pledge.  To have it pull, you'd have to report by gift date which could get messy.



We would enter it as one pledge if it were for our capital campaign as that is a multi-year campaign with one fund and reports will be on totals for all years.  We are just entering a multi-fund campaign.  Donors can pledge to capital and annual for the next five years.  I'm planning on entering annual campaign as five pledges to five funds.  



One other way might be to enter the 10K pledge for ths year and then at beginning of your next fiscal year go into the gift record and do a gift adjustment changing the fund to the new fiscal year.  But, I would be sure to talk to the finance office how this would work for them as it you would be changing the fund for an accounts receivable.  Doing this could also lead to inflated $ as the future years are going to show as amounts pledged for whatever year your in if you are reporting on pledge gift type.  For one pledge it might be do-able but I'm not considering it for the number of multi-year pledges we will hopefully have. 



I'll mention it because I'm sure someone else will - you could create the different funds and enter one pledge using the split gift function.  I do not recommend this.  You can not set different payment dates per each different funds so RE will want to take first payment and apply $400 to each fund.  Several funds will also give skewed results for several reports.  If you're considering this please search for previous posts as many users have shared their frustion about how split gifts work in RE.

Christine Cooke 2

Joann has all very good thoughts/suggestions.  Just some food for thought from another point of view to help you think about the decision to enter separate pledges for each year, vs. one pledge with annual payments.



I have experience with multiple year pledges both for capital campaigns (which always run more than one year, usually a minumum of 3 and up to 10) and annual fund pledges.  The fund it named/called Annual Fund because you are asking annually, it is unrestristed monies that are utilized annually as operating incoming.  That does not mean that after tha year is up there is no more Annual Fund.  I have worked in several  institutions that do ask for a mutli-year Annual Fund pledge.  It is entered as one pledge with payments broken out over the years of the commitment. 

For example: at a high school we ask for an Annual Fund pledge when they come in as a Freshman family and ask for a 4 year commitment.  That one pledge for the donor is recorded and reported in the year the commitment is received (this is what the business office and auditors will look at as revenue), and then the annual or semi-annual or monthly payments pay down the pledge balance over time.  You can report on the pledge payments from any given period of time (usually peeps choose their FY).

Personally I have tried the multiple pledges for one commitment recordkeeping and it gets messy and is confusing for those not up close and personal with all the gift data to understand easily when they open a record -- because the Team needs to know that the donor is capable of making a commitment or gift at a certain level.  If you record them as separate pledges, then the donor will not pull in reports and lists as giving at the $10k mark, but instead at the $2k mark.  And if you have multiple/many pledges, you will waste time and have more chance of error if you try to manually adjust for that in reporting.

JoAnn Strommen

If you record them as separate pledges, then the donor will not pull in reports and lists as giving at the $10k mark, but instead at the $2k mark.  And if you have multiple/many pledges, you will waste time and have more chance of error if you try to manually adjust for that in reporting.

Yes, you have to do what will work best for your org.  What works for a small org with few data entry staff may not work well for a large org with multiple users.  Gifts/pledges can get confusing to some people no matter how they are entered. 



Regarding pulling on lists, there's always the summary info that can be used.  As one pledge, they will pull to list at 10K but only for year one.  Without manual adjustment, they will not pull on donor lists at all for years 2,3,4,or 5 if you are reporting by fund.  The fun of annual campaign donor lists.

Christine Cooke 2

the will pull in the years following first year on donor lists/reports if you include pledge payments -- though that skews things also -- so I pull payments as a separate list and then review and combine where necessary... lots o' fun!

John Heizer

We struggle with this also.  When we get a $10K pledge over 5 years at $2K per year we book the $10K in the current FY as a time-restricted gift and then release the funds in the appropriate FY.  This meshes perfectly with our Financial records but doesn't reflect the donor's intent or "real income" per FY.  It also plays havoc with reporting donor giving levels because we want that donor to appear at the $2K level for each of the 5 years instead of $10K this year.  Fortunately those donors are rare (currently) so we can keep track of them outside RE, but that's not really "the best way" and we are trying to increase this type of long-term commitment.  You can't count on being able to report annual giving levels by the pledge payments because sometimes the donor will pay the entire $10K now.



My life would be so much easier if the donor would just plop a big bag of cash on my desk. 

Jen Claudy

I really like the big-bag-of-cash option that John mentioned!  We have a potential plan (that thankfully hasn't been mentioned in over a year now!) to move from asking for annual gifts to asking for annual pledges in the spring, to be paid by the fall/Dec 31st...even for the $10 donors.  Shudder.



To the original question.  Our Campaigns and Funds are not separated by timeframes, other than by looking at gift dates in reports.  They are set up to mirror Finance Chart of Accounts, so that our reports match their reports (or at least so we can explain any discrepancies when someone compares the two).



However, we have a Board member who just finished a 2-year pledge, and for that, we needed each year to go to a different Appeal (because it's Board giving; other donors would not create the same situation).  More confusing that it was a $500 cash payment, then 2 years of a $250 per month recurring-gift payment, and then a final $500 cash payment.  I entered one Pledge, and then, because it was unique and Appeals don't affect Finance at all, I set the Pledge to the first year's Board Giving appeal.  When that year was complete, I changed the Pledge record to the next year's Board Giving appeal (which does not affect existing payment gift records).  Once the second year was complete and the pledge balance was $0, I changed the Pledge gift once more to use the Split Gift feature and put it in the way it should be/really was.  This will skew an Appeals report, but because we had monthly payments, we decided to deal with that during the life of the pledge.  Another Board pledge that had 3 annual payments, I just split the pledge and then when a payment would come in, you just need to adjust the split gift tab (delete the ones that shouldn't be on the payment, and click [Distribute Evenly] at the bottom).  You can create a Business Rule to alert you when opening a particular constituent's record, or when creating a new gift record on a particular constituent's record, which can help trigger any specific actions that need to be done manually.



For Donor Recognition, I have a Gift Attribute on the Pledge called "RecognitionAmt" with a currency field for the Description.  I "split the gift" here to credit/recognize the appropriate amount for the appropriate timeframe.  Just requires a little thought in the process of pulling the donor lists.  In your case, you could, depending on what you use that field for currently, use the Receipt Amount for donor recognition, so put the $10k as the Gift Amount and $2k as the Receipt Amount, then run your donor recognition lists using the Receipt Amount.  We also include a list of donors with multi-year pledges or recurring gifts, and although we don't currently break that list down by amount, we could easily do so, whereas with 5 separate pledges of $2k each, that's more complicated.



Also, since it's somewhat related...we repurposed the Finder Number field (Miscellaneous Tab on the Gift Record) to be Pledge ID (you can change the field label in Config > Fields > Gift > Display As).  When a pledge is created, it is saved, and then the Gift ID (auto-generated by RE) is copied to the Pledge ID field.  When payments are entered, that field carries through automatically, so when pulling lists of gift data, you can easily sort and search for all payments to a particular pledge even outside of RE.  An attribute can also be used for this, but I like the dedicated field because I have it as a column on the Gift Tab of the Constituent record and we had no use for Finder Number.



Any way you do this will create a potential problem somewhere else.  The best thing is to sit down (first by yourself) and really think through what will work the best for your organization...considering gift entry, donor recognition lists, reports, etc.  Anything that involves gift amounts.  Also consider how many/often this situation will occur.  After you've figured out all the feasible options, determine which one you think will work best.  Then talk to other Development and Finance staff to get their take on it (assuming it's applicable).  Then either decide, or present the options and your recommendation to whomever needs to be making the decision if not you.  (In my case, my boss doesn't really care, so long as all the reports and lists are correct, so this one would be my decision to make...and to correct if it later turns out that I made the wrong, or not the best, choice.)  Then, and possibly the most important step of all, document the heck out of it!  If it's a situation that is occuring once or just a few times, document the process on the gift record for the pledge(s).  If this has the potential to be an on-going occurance, put it wherever your other documentation lives and/or on a RE dummy record (I like to keep as much as possible within RE...if you're not Hosted, you can link a Word or Excel document to the Media Tab of a dummy record and update from within RE or outside of RE wherever that document "lives").



Documentation is important...even if no one else ever looks at it, at least you can say you did it.  I was fortunate to hear a presentation from a Blackbaud support analyst once several years ago and one of the things he talked about stuck with me, even though I don't practice it as much as I should these days.  He said that you should document every step, no matter how small, of a process, even something you do every day.  Then, you should have that documentation out/open every time you do the process, even something you do every day and know by heart.  Because if you change one little thing in the way you record something, you can easily and immediately update the documentation because it's right there and open.  Which means you never fall behind in updating documentation and all of it is always up-to-date.  This, then, works well with the "hit by a bus" theory I learned in a former career path in stage management for live theatre...if, as the stage manager, you are hit by a bus (not killed, but you're probably at least out of commission with a broken limb for a short while), your book/script needs to be set up in such a way that anyone else with basic knowledge of stage management can step in and run the show, because the show must go on.  And if you work somewhere like I do with a small staff and not time for much cross-training, this can be helpful even for vacations.