community-wide campaign and pledge payments

Laura Bidireanu

Hi All,


There is an annual county-wide campaign sponsored by the local community foundation where people donate to their favorite NPO's during a 24-hour period. Afterwards, we receive a check for the amount raised plus a portion that is matched by a local foundation. A fellow local organization enters this as a single gift from the local community foundation and soft credits all the individual constituents (we receive donors' information and donation amounts in a spreadsheet).


Some of the donations that we receive from this campaign are payments for pledges, which have been entered on individual constituents' records. If we entered this donation as one gift, would it be possible to link the soft credit donation as a payment to an individual donor's pledge? If not, what would be the best way to enter these donations on Raiser's Edge keeping in mind that we have a combination of gifts and pledge payments?


Thanks!


L.B. 

shani traum

We had a variation of this (single check from some fundriasing platform crediting to several donors).  I can't remember why, but we had entered the donor's amounts as pledges on their records (Received info about donation before check finally was sent).


We entered as a single check from Organization X, and then soft credited the donors their portion of the master check.  And we applied the master gift to the individual pledges on the donor records. When you go to apply the payment, it will allow you to search for pledges from other records.

JoAnn Strommen

My first thought was is the foundation okay with using the funds to pay off existing pledges? Is it allowable? For many foundations it is not. If this were our community foundation, we would not be applying it to existing pledges. We would consider that their fundraising event.


That said, as Shani posted, if allowed, you could apply the check to each outstanding pledge. Or you could soft credit. I would not do both as it will lead to inflated giving history if you include SC. They would get $X for their pledge/gift and $X again for the SC.


Just one question and opinion.

Debbie Hanson

@JoAnn Strommen - we are currently having the discussion with our Accounting Team regarding Community Foundation (CF) gifts and DAFs not being applied to a personal pledge. How do you recommend from the Raiser's Edge perspective, if at all, reduce the donors pledge because of their recommendation to the CF and the gift that was received?

JoAnn Strommen

@Debbie Hanson Welcome to the BB community forums.

Most DAFs and foundations state that monies can not pay a pledge. (There's another whole side discussion if that is referring to enforceable or revocable pledges.)

Our procedure and that of many organizations is to reduce amount or delete pledge if full amount from individual's record, enter payment on DAF/Fndtn record and soft-credit the individual. There are also regulations that DAF payments cannot benefit recommending donor with tickets/invites/event attendance/benefits. Lots of things to consider.

Alex Wong

@Debbie Hanson
You could also take the portion of gift that is to pay for pledge and enter as a 2nd gift on the DAF/Fndtn record and have this 2nd gift apply as pledge payment to the pledges that was originally entered, and depending on your soft credit rules, soft credit the donor with the pledge being applied to.

Wendy DannMarcel

@JoAnn Strommen

Hi, I've been trying to find concrete information on applying DAF and Foundation payments on pledges.

Are there any resources to find out what we can and can't do with DAF and Foundation donations? I would appreciate any advice on this. We receive over 400 pledges in a 4 month period and some are paid for via Foundations and DAFs. I've been acknowledging the portion that is deductible but I'm not confident that is what we should be doing.
Thanks!

Wendy DannMarcel

We deal with a lot of pledges and payments but I'm not sure of your scenario. If you give me a call at 646-442-1184, I'm sure I can help in some way. We receive large pledges that have combined payments from Foundations, DAFs, and individual contribution.

roger berg

@Laura Bidireanu
Not specific to your question - but several posters have talked about whether DAF funds can be used to pay a pledge. Here is what the Greater Kansas City Community Foundation has to say about it:

Can a donor use a donor-advised fund to pay for a pledge?

A grant from a donor-advised fund may fulfill a commitment to a 501(c)(3) public charity. However, Treasury and the IRS prohibit using the term “pledge” on grant checks or related correspondence. Instead, the donor should reference a “donation” or “gift.”

Debbie Hanson

@JoAnn Strommen - "Our procedure and that of many organizations is to reduce amount or delete pledge if full amount from individual's record, enter payment on DAF/Fndtn record and soft-credit the individual…” - thanks for confirming what I was thinking seemed the best way for our Organization to process these and match our Accounting records!

Debbie Hanson

@Alex Wong - thank you, Alex. We have paperwork that states the DAF/CF gift cannot be applied to a personal pledge. So in my mind, I don't think what you suggest would work.