Recurring Gift / Pledge

Raul Tapia

Hello all,


I have pledges without an end date, so technically they are recurring gifts. The way i can explain it is as if a Franchise donates via their payroll check, our finance team has to request the money every month. Sometimes they have funds for us to be able to withdraw money from sometimes they dont. How should we project future funds? Annual amount? Monthly amount? 


Thanks in advance!

JoAnn Strommen

From my perspective you don't have future funds to project.  There's no guarantee you'll be getting money this month, next month or whenever based on what you posted.  That's our org definition of money we count anyway.  I know some orgs do count and report on their recurring gifts.  We wouldn't be including it in our projections - it's just icing on the cake when money comes in.  Depends on what your org does. 


So your finance office just contacts them each month and says 'do you have money for us?'  Is there a standard amount? 

Jason Drury

Coming from a Finance person, this is a risky situation to project. When creating projections you want to be sure you are providing accurate information so informed decisions can be made. Even though a booked pledge may not be paid, you still have an reasonable expectation to receive the funds so you can include them in your projections. But in your case you may not be even able to book a pledge given there is no real certainty for receiving the funds. Following the conservative approach, you can either exclude them entirely from the projection or create a projection consisting of 2 types of funds...secured pledges and unsecured pledges. This will allow the decision makers to see what they can anticpate receiving in the future.

Raul Tapia

Hi 


Thanks for responding. We have an automated system that collects from their paycheck. I did make it sound like the finance team is the one that asks for money, but its automated. If there are funds in the check, then the system pulls out the donation, if there isnt it does not. I think i will go with what both advise of excluding them from projection and just count that as cash received monthly.


Thanks!

Nicole S

I think what you are asking about is one of the fundemental differences in pledges versus recurring gifts. Pledges can be counted as income and RE/FE are designed to handle it as such. Recurring gifts as really periodic commitments that can be canceled or changed at anytime. So I agree that this is a tricky situation. Personally, I wouldnt count it as income or projected revenue.

Daniel Bayer

The way we deal with these sorts of things right now is it's entered as a pledge if the person gives a total amount they want to give - for example, they fill out a form saying they want to give $100 this year through payroll deductions. If they say they want to have $5 deducted from every pay period, then that's a recurring gift. Personally, I prefer entering these as recurring gifts for various reasons, but they're all specific to how this org works.


I can see the desire to want to count them as funds that will be coming in, but if it happens often enough that you don't actually get the funds, then I would feel very uneasy about putting it in as a pledge.