Winners of Silent Auction items counted as donations and towards Achievement?

Theodore VanPatten

There has been a recent change in accounting and they no longer want me to enter the people who win a silent auction item. Up until now I have entered them as a gift transaction and part of the Event Campaign's achievement. I do not send out tax receipts, but still want that donation to be counted as a “donor” and also towards achievement. Accountant wants me to enter a one value under a constituent account record just for that purpose and not put towards Event. Does this sound accurate and I need members to respond so I can bring this to our Executive Director. Thank you!

Rachel Cavalier

Does the accountant want a “silent auctions constituent" rather than the money being put for the actual human's constituent record? I don't really understand why the income wouldn't get added to the event total, if the silent auction was at that event.

The only sort of similar situation we've had is that when we sell raffle tickets at an event, we don't put the gifts from those sales on individuals' constituent records - there are hundreds of them and the way that the event raffles work is that we get 15 minutes to sell as many as possible going table to table in a room of about 900 people. The income from selling the raffle tickets still gets coded towards the event though - it's just the constituent record that the gifts are recorded on is “Raffle Tickets” rather than a human or company.

We also have the added benefit/complication where all of our transactions where someone receives a benefit (like any tickets or brochure adverts) goes through a different bank account to the strictly donations only transactions. I think that might be just a weird quirk of our organisation but it does have the helpful benefit that we can't claim Gift Aid for anything that has gone into that bank account and we have RE set up to reflect that.

Faith Murray

We do not post “purchase" transactions in RE. Just like with dinner tickets, auction winners are getting something back - so it is not a straight donation. Also, “purchase” transactions do not translate the same way as pure donations in terms of donor behavior for metrics, lifetime value predictions, etc. Your accountant has a valid objection.

There are always event gifts that don't make it into donor records: cash purchases from the bake sale, tip jars at the beer bar, the 50/50 raffle cash bag, transactional room and board fees for the alumni reunion registration. Your Finance dept. may even keep a separate account for non-donation event revenues.

However, I would be firm with the accountant about your needs to track donor engagement. Posting an entry under a nondescript “Event” constituent does no one any good for re-engaging donors for future events, tracking lapsed and renewal statistics, or targeting mailings.

You have two options, really:

• Consider Raiser's Edge a “donor database” strictly. With this philosophy, any revenue that is not a donation does not get entered with a gift value. You can still enter a $0 gift in their record to maintain engagement tracking. You can create a gift attribute to record “purchase value” (similar to Fair Market Value for in-kind gifts). You can even record the full dollar value of their purchase in their event registration under “Amount paid” without linking it to an actual gift (so no pulling over to Finance).
• Or, you can consider Raiser's Edge a “Development revenue database” – the sole receptacle of all revenues achieved by your department. If this is your philosophy, then even purchase gifts would need to be entered. To maintain tax accountability, you would enter purchases with their full gift amount, but with a $0 receipt amount, with full notation for benefits received. Ideally, you would make life easier for your accountants by assigning non-donation revenues to a different Fund to allow them to separate the revenue channels cleanly.

Our org takes the first approach. You'll have to figure out with your accountant and Director which works best for you.

Theodore VanPatten

Thank you, Faith, we do process Tickets into its own Fund and that gets uploaded to RE from FE so maybe that is how she is keeping that separate. We report Achievements out of RE. I gather that you provide those out of FE. Also just wondering how often do you run the utility to Post to FE GL?

Daniel Bayer

While I can see where your accountant is coming from, his proposed solution is ridiculous. You obviously need to track engagement and putting all auction purchases under a generic “Event Constituent” record helps no one.

The last time I was at an organization with a silent and live auction, all auction purchases were entered as gifts under an Auction appeal. That appeal was excluded from most reports and from calculating total individual giving for listing/recognition purposes. The item and the fair market value would go in the gift reference field. We also made sure to use the Receipt Amount for anyone who paid over the fair market value for an item (anyone who didn't had a receipt amount of $0.00, since none of what they paid would be tax deductible) - that's what the field is there for, no reason not to use it when appropriate!

Alternately, I suppose you could enter an Event Participation level of “Auction Item” with a value of $0.00 and add whatever people paid in their event Participant record, with the specific items going in the Comments field, but I don't see why you shouldn't be able to enter this on every constituent record as long as you properly notate it in a way that would be easy to separate out from straight donation revenue.

Theodore VanPatten

Thank you, Rachel, I don't think she wants any of it in RE. I can see for raffle or wine pull to enter it as a sum in RE, but we have people paying for those by check and credit card as well. So when I reconcile I have to know what the payment type is, so I enter the check transaction and the credit card transactions.

Theodore VanPatten

Thank you, Daniel. We also have the option to “Do Not Post.” We did not count the donated items in our achievement numbers, just a zero amount transaction, and gift type GIK and did not post to FE, but we did count towards our donor counts. For the person who won the item, we did the same thing and counted that toward achievement and uploaded to FE.

Faith Murray

@Theodore VanPatten, I am unfamiliar with using Achievements. After reflection, I think we need to loop in someone who is fluent in both RE and FE to offer some insight from the other direction. (I only use RE.)

@Angela Tuttle, @Heather MacKenzie, or @Jennifer Kluh – can you weigh in?

Elaine Tucker

@Theodore VanPatten I'd highly recommend continuing to keep the DONOR information and Event Attendee information in Raiser's Edge. The silent auction item was given by a DONOR and the silent Auction winner is a “quasi” donor AND an event attendee. This is very important information for your organization, especially as you move forward with stewarding your supporters and GROWING your donor base. If the Silent Auction Winner is not noted in the database, and they had a “really good interaction” with the prize or the event, then there is no way of letting your fundraisers/stewardship folks know about it if you enter under a “general constituent record. Also, if accounting want this to be ”included" in a specific way I'd create a fund called Silent Auction Item, link to the event, have an appeal as part of the gift (if needed). You can then have the GL coding in the Fund Tab coded as needed so it shows up in FE as the accounting department needs. If accounting doesn't want the information at all, then mark the gift as Do Not Post, and FE will not receive the information.

Theodore VanPatten

Thank you Elaine, good info

Jennifer Kluh

I too only use Raisers Edge and not fluent in FE

Jennifer Kluh

Faith this is great information especially for the first option about creating a gift attribute to record the purchase value ?

Angela Tuttle

Hi! In RE we code non-donations (ticket sales, bake sales, t-shirt sales etc) to gift type Other. Then when the gift is posted to FE (from RE) the general ledger code used is Misc Income.

In RE and FE we know gift type other is a non donation.

Winner of silent auction items - the amount paid is not all donation. Only the amount paid over the fair market value of the item is a donation. If it was $100 item that someone paid $200 we would enter as $100 donation $100 non donation.

We follow the IRS guidelines on charity auctions. This is just how we do it. I am in no way saying this is the correct way or offering tax advice.

We keep our RE and FE in sync as much as possible.