Creating Constituent Records for Donor-Advised Funds

Harper Chance · October 2016

Hello all,

I am wondering if anyone has any advice on how to best manage creating records and sending acknowledgements for grant foundations with donor-advised funds. We just migrated over to RE from Donor Perfect, and our system there was a giant mess. For example:

We have a local grant-giving foundation from which we have received a number of grants in the past. These grants all come from various different donor-advised funds. In our previous system, the gift entry staff created separate records for each fund that we received a grant from. So, as of right now, we have eighteen records for this foundation, each for a different donor-advised fund. There has got to be a better way to handle this -- does anyone have any advice?

Additionally, we have some concerns about how to best set this up to send our acknowledgement letters. If we know the individuals behind the donor-advised fund, we will of course soft credit them and send them an acknowledgement letter directly. However, often the only information we have about the donor is the name of the fund and the foundation's contact info -- in which case, we will send the letter to the foundation and they will forward it to the donors. I'm just wondering what best practices might generally be for situations like this -- I am currently thinking of putting the specific fund info in the "reference" field and merging that into our letters, but this feels a little messy and is not searchable (right?). Are there any ideas?

Jen Claudy · October 2016

We do pretty much what you had in Donor Perfect. Each fund gets a constituent record, with relationship links (and automatic soft-crediting) to the Foundation's record and the individual's record (if we know it). The individual is marked to receive the acknowledgement letter. The gift is entered (hard credit) on the Fund's record, then automatically soft-credited to the Foundation and Individual. The letter replaces the regular tax statement with language that includes the Fund name and Foundation name (for us is would be something like, "The Hernandez Family Fund of The Greater Cincinnati Foundation"). The gift is also tagged to whatever appeal the Individual may have been responding to (even though we don't get the actual reply card back).

This means that we can very easily distinguish between what gifts came via which funds. Occasionally, we've had a donor move their fund from one Foundation to another (for example, Fidelity Charitable Giving Foundation). This means we just update the Relationship links (with dates) and continue on in the same manner. Also, we sometimes get a gift/grant from the Foundation itself, not via a donor-advised fund. Those are now very easy to spot, as they aren't soft-credits but are entered directly on the Foundation's record. (Tools > User Options > Color > Legends > Gift Legend to set different characteristics...for me, soft-credits are bolded.)

Melissa S Graves · October 2016

I agree that what you have is actually ideal. In RE you can then auto-soft credit the advisors of each fund by having separate records. Putting them together means you need to manually remember to soft credit the proper people. You can use the Parent Corp field on Org 2 to "link" all of the funds to the foundation record and use this for reporting on totals from that foundation.

Joy park · October 2016

It sounds like you're already doing it correctly. We have a very similar foundation in our city, with hundreds of donor-advised trusts and funds. Gifts are attributed to The City Foundation and soft-credited to that family fund. Each family fund is an Org. Const. record. That way you can track the soft-credits, total funds given by The City Foundation, etc. plus also keeping track of those family funds individually.

Most of the time, a receipt of acknowledgement (non-charitable) is instructed to be issued to the City Foundation and the donor acknowledgement (the thank you letter) is addressed car of The City Foundation.

Sometimes more is better!

Harper Chance · October 2016

Jen Claudy:

We do pretty much what you had in Donor Perfect. Each fund gets a constituent record, with relationship links (and automatic soft-crediting) to the Foundation's record and the individual's record (if we know it). The individual is marked to receive the acknowledgement letter. The gift is entered (hard credit) on the Fund's record, then automatically soft-credited to the Foundation and Individual. The letter replaces the regular tax statement with language that includes the Fund name and Foundation name (for us is would be something like, "The Hernandez Family Fund of The Greater Cincinnati Foundation"). The gift is also tagged to whatever appeal the Individual may have been responding to (even though we don't get the actual reply card back).

This means that we can very easily distinguish between what gifts came via which funds. Occasionally, we've had a donor move their fund from one Foundation to another (for example, Fidelity Charitable Giving Foundation). This means we just update the Relationship links (with dates) and continue on in the same manner. Also, we sometimes get a gift/grant from the Foundation itself, not via a donor-advised fund. Those are now very easy to spot, as they aren't soft-credits but are entered directly on the Foundation's record. (Tools > User Options > Color > Legends > Gift Legend to set different characteristics...for me, soft-credits are bolded.)

This is all very helpful and reassuring, thank you! And thank you for all your specific details on how you manage the funds - this will make it very easy for me to clean up our data!

Susan Chomsky · October 2016

Harper Chance:

Hello all,

I am wondering if anyone has any advice on how to best manage creating records and sending acknowledgements for grant foundations with donor-advised funds. We just migrated over to RE from Donor Perfect, and our system there was a giant mess. For example:

We have a local grant-giving foundation from which we have received a number of grants in the past. These grants all come from various different donor-advised funds. In our previous system, the gift entry staff created separate records for each fund that we received a grant from. So, as of right now, we have eighteen records for this foundation, each for a different donor-advised fund. There has got to be a better way to handle this -- does anyone have any advice?

Additionally, we have some concerns about how to best set this up to send our acknowledgement letters. If we know the individuals behind the donor-advised fund, we will of course soft credit them and send them an acknowledgement letter directly. However, often the only information we have about the donor is the name of the fund and the foundation's contact info -- in which case, we will send the letter to the foundation and they will forward it to the donors. I'm just wondering what best practices might generally be for situations like this -- I am currently thinking of putting the specific fund info in the "reference" field and merging that into our letters, but this feels a little messy and is not searchable (right?). Are there any ideas?

Hi Harper, We create an ORG record for the Donor Advised Funds and relationship link to the Advisor (IND record) and Issuing Company. I use "Automatically Soft Credit" on the Gen 2 tab. The relationship link allows us to query on how many funds and gifts are generated thru each issuing company. I add the fund name to the reference field so that the soft credits are identified on each record. We also have a Constituent Code of Donor Advised Fund.

Susan Chomsky · October 2016

Jen Claudy:

We do pretty much what you had in Donor Perfect. Each fund gets a constituent record, with relationship links (and automatic soft-crediting) to the Foundation's record and the individual's record (if we know it). The individual is marked to receive the acknowledgement letter. The gift is entered (hard credit) on the Fund's record, then automatically soft-credited to the Foundation and Individual. The letter replaces the regular tax statement with language that includes the Fund name and Foundation name (for us is would be something like, "The Hernandez Family Fund of The Greater Cincinnati Foundation"). The gift is also tagged to whatever appeal the Individual may have been responding to (even though we don't get the actual reply card back).

This means that we can very easily distinguish between what gifts came via which funds. Occasionally, we've had a donor move their fund from one Foundation to another (for example, Fidelity Charitable Giving Foundation). This means we just update the Relationship links (with dates) and continue on in the same manner. Also, we sometimes get a gift/grant from the Foundation itself, not via a donor-advised fund. Those are now very easy to spot, as they aren't soft-credits but are entered directly on the Foundation's record. (Tools > User Options > Color > Legends > Gift Legend to set different characteristics...for me, soft-credits are bolded.)

I like Jen's answer. It confirms how we do things here. We also create a relationship (not only a soft credit) for each of the funds at the foundation. The Foundation relationship is Trustee and the Fund relationship is Donor Advised Fund. It is a way to identify how many funds are giving through that foundation.

If we don't know the fund advisor name, we mail to Fund Advisor Specific Fund Name Specific Foundation Name and Dear Fund Advisor.

Susan Chomsky · October 2016

Susan Chomsky:

Jen Claudy:

We do pretty much what you had in Donor Perfect. Each fund gets a constituent record, with relationship links (and automatic soft-crediting) to the Foundation's record and the individual's record (if we know it). The individual is marked to receive the acknowledgement letter. The gift is entered (hard credit) on the Fund's record, then automatically soft-credited to the Foundation and Individual. The letter replaces the regular tax statement with language that includes the Fund name and Foundation name (for us is would be something like, "The Hernandez Family Fund of The Greater Cincinnati Foundation"). The gift is also tagged to whatever appeal the Individual may have been responding to (even though we don't get the actual reply card back).

This means that we can very easily distinguish between what gifts came via which funds. Occasionally, we've had a donor move their fund from one Foundation to another (for example, Fidelity Charitable Giving Foundation). This means we just update the Relationship links (with dates) and continue on in the same manner. Also, we sometimes get a gift/grant from the Foundation itself, not via a donor-advised fund. Those are now very easy to spot, as they aren't soft-credits but are entered directly on the Foundation's record. (Tools > User Options > Color > Legends > Gift Legend to set different characteristics...for me, soft-credits are bolded.)

I like Jen's answer. It confirms how we do things here. We also create a relationship (not only a soft credit) for each of the funds at the foundation. The Foundation relationship is Trustee and the Fund relationship is Donor Advised Fund. It is a way to identify how many funds are giving through that foundation.

If we don't know the fund advisor name, we mail to Fund Advisor Specific Fund Name Specific Foundation Name and Dear Fund Advisor.

Oh, one more thing, when entering the gift I copy the Fund Name to the Reference line so it shows in the soft credit on the foundation record.

Debra Holcomb · October 2016

I'm going to disagree with many of my colleagues (and probably be blasted for it). First and foremost, the Raiser's Edge is fundraising database, not an IRS tax auditing database. The decision to make is "who are you going to solicit for the next gift?". If it's the donor-advised fund, then make them the primary record. If it's the person who recommend the gift, then that is who you should hard credit for the gift if you want your reports and other output to generate with meaningful information. Without the direction of the individual, you wouldn't receive the gift so that is who you want to steward. You don't want to annoy these donors by over-soliciting them when they gave and you want to make sure they are part of your conversation when you send cultivation or stewardship communications.

When we receive a gift through a donor-advised fund, the hard credit goes to the individual and soft credit to the DAF company (not the name of the fund). We have a gift code of "Donor-Advised Fund" which is entered onto the gift so that it is receipted correctly (without tax language). We list the specific DAF fund name in the reference field of the gift so that it is included in the acknowledgement letter as well. We have an add/sal specifically for donor recognition on the individual record where we note how the gift should be recognized in publications. Individuals with a DAF are segemented separately in our solicitations and receive special care (most don't want a reply envelope sent to them).

Using RE pre-built reports, export and query can be tricky where soft credit is concerned. And, if you're more of a self-service shop and allow your gift officers to create their own RE work they will forget to use the query options tab to select soft credits and could miss a VIP or they could double count the amount they've raised. On a LYBUNT report, list would you rather see the name of the individual who recommend the gift or the name of the foundation that wrote the check? From a fundraiser's perspective, there is so much more besides generating a receipt that RE can do to improve your fundraising practices. Think beyond the receipt in terms of RE output to decide how to record your gifts. It's a new database for you, you don't have to do it the way you were doing it.

It's up to you, but I find to make the most of RE and use the pre-built report and other output is easier if the individual receive the hard credit (an RE function, not an IRS requirement). I've been using RE for nearly 20 years and have managed DAFs this way since they first became popular. I've never had any issues, with reporting, receipting or recognition, when we track the gifts as described.

Good luck!

Creating Constituent Records for Donor-Advised Funds

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