Help needed with recording pledge payment

Snezhana Kenarova 2

Hello everyone, I have a very urgent question and hope you can help me.

Two years ago, in FY22, we conducted a Challenge Campaign, and a generous donor pledged $75K unrestricted, to be paid over three years. The first installment of $25K was paid in FY22, leaving a current pledge balance of $50K.

Two months ago, the donor decided to support a new restricted program, sending us a check for $150K. The intention is for $50K to pay off the Campaign pledge balance from FY22, and the remaining $100K should be counted as restricted new revenue for FY24.

Our finance department told us that we can't change the pledge payment fund from unrestricted to restricted and suggested writing off $50K in unrestricted funds on their end, considering the entire pledge was initially booked as unrestricted. However, on our end we aim to show that the FY22 pledge was paid off (not written off), have the full $150K directed to the restricted fund, and at the same time align with our accounting department. Is this even possible?

I was considering applying the $50K toward the FY22 pledge, changing the fund from unrestricted to restricted, changing the Campaign designation from 2022 to 2024. This way, it will reflect a $0 pledge balance and count as new revenue for FY24 which will match our finance department.

I also want to ensure we avoid any double counting when generating pledge receivables reports. Can someone advise on the best way to record this in RE? THANK YOU in advance.

JoAnn Strommen

@Snezhana Kenarova Can you enter the payment of $150 as two gifts? Pay off the pledge - $50K and new gift $100K to the restricted fund? It sounds like he's just making two different gifts in one check.

Side opinion, I wouldn't want to ‘write off’ the $50K. If you can't come to a different solution with finance, do an adjustment instead.

JoAnn Strommen

@Snezhana Kenarova I don't follow why if you apply the $50K to the pledge you would need to change the fund/campaign. Are you going to increase the pledge to accommodate the $100K?

Alex Wong

@Snezhana Kenarova
Bad idea from finance to write off as it is does not reflect the actual situation with donor.

I don't know if your org uses split gift or not, but you can either:

1. Enter a $100K restricted pledge and then enter the $150K “pay-cash” gift as 1 gift record, where $50K is recorded as split with the original Campaign, Fund, Appeal, Package (CFAP) of the $75K pledge that is unrestricted applied to the $75K unrestricted pledge, and $100K is the new CFAP that is restricted applied to the new pledge created
2. OR
3. Enter 1 “pay-cash” gift record of $50K and have the CFAP of the $75K pledge and applied to that $75K unrestircted pledge.
   Enter a 2nd “cash” gift record of $100K that have the new CFAP of restricted fund.

Snezhana Kenarova 2

@JoAnn Strommen
I entered as two separate gifts $50K as pay-cash but had to change the fund to restricted because the total $150K will fund a new program and I need to show that in this fund line we have $150K as opposed to just $100K if don't change the fund for the $50K pledge payment. My thoughts on changing the campaign from 2022 to this fiscal year is so it matches finance department when they report on the total revenue of $150K in FY24. If I don't change the campaign to 2024 it won't count as revenue in FY24 (that's how we have our reports set up to pull).

Snezhana Kenarova 2

@Alex Wong Thank you, Alex. I'll look into the split gift. Yes, I agree on the write off.

Alex Wong

@Snezhana Kenarova
I am generally against org that uses Campaign to track “annual giving” as Gift Date itself generally do this really well already. Even in the case where org doesn't use calendar year as fiscal year, using the FY's date range will give you what you need.

Campaign also doesn't go into FE from RE posting that is “meaningful" for tracking. (you can have Campaign post into FE as part of Reference, but not particularly useful in my opinion