How to deal with donor and donor's foundation/trust

Catherine Han

We have some donors who have their own foundation/trust. Both sides can donate to our organization. If donation is from individual, tax receipt will issued to individual, if donation is from trust, tax receipt/acknowledgement will be issued to trust/foundation. We don't issue tax receipt to foundations. We want to combine two in one file. Basically they are from same donor (donor and donor's fund/trust/foundation). How do you deal with it. What's the best practice.


Thanks,


Catherine

Ryan Hyde

If you do some searching in the forum, you'll see this topic covered extensively. As you imagine, there is no clear agreement on best practices.


We hard credit the donor for the gift and use a specialized letter called "No Tax TY," which serves as an acknowledgement but omits the tax language.

Catherine Han

Thanks, Ryan. Do you set up separate constituent or one constituent?

JoAnn Strommen

Catherine,

From my understanding, you are dealing with two separate entities, the individual and the individual's foundation. I would keep them as two separate records. If you are talking about the individual and a trust in their name I think you could combine but I certainly don't claim to be an expert on tax implications and legalitites. There are differences between a foundation and a trust.


My 2 cents...

Catherine Han

Thank you, JoAnn. We are dealing with them as two separate entities. Some managers felt that it's hard to report as one donor or two donors (donor and trust/foundation). How do you report them?

Ryan Hyde

We don't typically create a separate record for the foundation. We may have a relationship record on file, but it's typically just a relationship (I'm saying 'typically' as there may be good reasons to break these records apart in some cases). 


If you're worried about year-end tax letters, you just have to be careful with how you code the gifts. There should be something consistent on these gift records that you can use as a limiter to exclude them from the donor's year end letter, assuming you send those kinds of letters.

Catherine Han

Most of receipts and letters are one receipt per gift/one letter per gift. How can I pick up donor name if you enter one of side in relationship field. I meant that Trust on receipt if donation from Trust, individual name on receipt if donation from individual donor.

Ryan Hyde

Again, we're not receipting, we're only acknowledging. We use the donor name in our acknowledgement letter, not the name of the foundation or trust. We have never once had a donor complian.

Mary Dunning

Catherine Han:

We have some donors who have their own foundation/trust. Both sides can donate to our organization. If donation is from individual, tax receipt will issued to individual, if donation is from trust, tax receipt/acknowledgement will be issued to trust/foundation. We don't issue tax receipt to foundations. We want to combine two in one file. Basically they are from same donor (donor and donor's fund/trust/foundation). How do you deal with it. What's the best practice.


Thanks,


Catherine

Catherine,

We have donors that also direct gifts to us from their foundation or fund at the Jewish Federation.  Gifts directed to us from foundation/Federation are hard recorded in the donor record and soft credited to foundation/Federation (we also use gift constituency code of Foundation or Fund to distinguish these gifts).  Our donors want all gifts (indiv/fund/foundation) to be counted as their annual giving.  Acknowledgement letters are sent with appropriate tax receipt language in smaller print at bottom (where required).  For fund/trust gifts, we always send the individual donor a thank you letter without the tax language (...thank you for your gift of $500 directed to us from your fund at the Jewish Federation...).  Hope this answers your question.