Pledge Payment

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Joyell Brown
Joyell Brown ✭
Seventh Anniversary First Reply
in Blackbaud Raiser's Edge NXT®: General Discussion
I have a donor who made a multi year pledge and is using his matching gift to help pay the pledge as well.  How are folks handling this because soft credit don't remove from the pledge balance.


Also, I have a family who's made a pledge for a capital campaign and multiple families are paying on the pledge.  Any thoughts on how we can ensure the pledge is paid in full with so many contributors?


Thanks!


 
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  • Joanne Felci 2
    Joanne Felci 2 ✭
    Ninth Anniversary Facilitator 4 Name Dropper Photogenic
    Joyell,

    I apply the payment to the pledge itself


    From the matching gift, under gift menu, apply to pledge and you can put in the con id of the record that has the pledge on it.  This will decrease the pledge amount.


    Same thing can be done for multiple people maying off a capital campaign pledge


    Joanne
  • shani traum
    shani traum ✭
    Ninth Anniversary Facilitator 2 Name Dropper May 2023 Monthly Challenge
    Joyell,


    RE allows you to apply payments from one donor to another's pledge.


    On the gift, click Gift>>>Apply to>>>>Pledge>>>Load Pledge From


    Then you select whose pledge your paying off, and link the gift accordingly.


    Shani


     
  • Joanne Felci 2
    Joanne Felci 2 ✭
    Ninth Anniversary Facilitator 4 Name Dropper Photogenic
    LOL Shani!  GMTA   :)
  • Joyell Brown
    Joyell Brown ✭
    Seventh Anniversary First Reply

    Thanks so much Joanne!


    Joanne Felci    :

    Joyell,

    I apply the payment to the pledge itself


    From the matching gift, under gift menu, apply to pledge and you can put in the con id of the record that has the pledge on it.  This will decrease the pledge amount.


    Same thing can be done for multiple people maying off a capital campaign pledge


    Joanne

     

  • John Heizer
    John Heizer ✭
    Ancient Membership Facilitator 3 Photogenic

    Joyell Brown:

    I have a donor who made a multi year pledge and is using his matching gift to help pay the pledge as well.  How are folks handling this because soft credit don't remove from the pledge balance.


    Also, I have a family who's made a pledge for a capital campaign and multiple families are paying on the pledge.  Any thoughts on how we can ensure the pledge is paid in full with so many contributors?


    Thanks!


     

    While it is possible in RE to take a payment from the Organzation and apply it to the Individual's Pledge there are legal problems with this.  Almost all Orgs/employers stipulate that their matching dollars cannot be used to pay off an employee's debt (which is what the Pledge is, it's a debt to your Organization), otherwise it is a taxable benefit for the employee.  You really need to reduce the Individual's personal Pledge amount and add a MG Pledge to keep things recorded properly.

  • Joanne Felci 2
    Joanne Felci 2 ✭
    Ninth Anniversary Facilitator 4 Name Dropper Photogenic
    But wouldn't receipts - or tax credit - be based on cash received.


    So the organization gets tax credit for the matching gift but the donor gets tax credit for whatever payment they made


    You wouldn't give tax credit for a pledge - would you?
  • John Heizer
    John Heizer ✭
    Ancient Membership Facilitator 3 Photogenic

    Joanne Felci:

    But wouldn't receipts - or tax credit - be based on cash received.


    So the organization gets tax credit for the matching gift but the donor gets tax credit for whatever payment they made


    You wouldn't give tax credit for a pledge - would you?

    The Organization would get the receipt, but it's no longer tax deductible for them.  The Individual is still receiving a taxable income benefit because a personal debt is being reduced and the Organization isn't really making a donation anymore, they're paying off someone's debt. 

    http://www.johnhtaylorconsulting.com/wp-content/uploads/2016/12/Who-Can-Make-a-Pledge-%E2%80%93-And-Who-Can-Pay-It-Off.pdf


     

  • Joanne Felci 2
    Joanne Felci 2 ✭
    Ninth Anniversary Facilitator 4 Name Dropper Photogenic

    John Heizer:

    Joanne Felci:

    But wouldn't receipts - or tax credit - be based on cash received.


    So the organization gets tax credit for the matching gift but the donor gets tax credit for whatever payment they made


    You wouldn't give tax credit for a pledge - would you?

    The Organization would get the receipt, but it's no longer tax deductible for them.  The Individual is still receiving a taxable income benefit because a personal debt is being reduced and the Organization isn't really making a donation anymore, they're paying off someone's debt. 

    http://www.johnhtaylorconsulting.com/wp-content/uploads/2016/12/Who-Can-Make-a-Pledge-%E2%80%93-And-Who-Can-Pay-It-Off.pdf


     

     

    John -


    I see what you mean, but seriously can you take a donor to collection court if they do not fulfill a pledge - if this is indeed classified as a debt?  If so I'd love the details on that (though that probably isn't the best donor stewartship). 


    I just don't see a pledge as a debt since there really isn't a recourse to get a donor to pay a pledge...it is like an honor/promise to me, but I guess if the law sees it as a debt I can see your point.


    Joanne

  • John Heizer
    John Heizer ✭
    Ancient Membership Facilitator 3 Photogenic

    Joanne Felci:

     

    John Heizer:

    Joanne Felci:

    But wouldn't receipts - or tax credit - be based on cash received.


    So the organization gets tax credit for the matching gift but the donor gets tax credit for whatever payment they made


    You wouldn't give tax credit for a pledge - would you?

    The Organization would get the receipt, but it's no longer tax deductible for them.  The Individual is still receiving a taxable income benefit because a personal debt is being reduced and the Organization isn't really making a donation anymore, they're paying off someone's debt. 

    http://www.johnhtaylorconsulting.com/wp-content/uploads/2016/12/Who-Can-Make-a-Pledge-%E2%80%93-And-Who-Can-Pay-It-Off.pdf


     

     

    John -


    I see what you mean, but seriously can you take a donor to collection court if they do not fulfill a pledge - if this is indeed classified as a debt?  If so I'd love the details on that (though that probably isn't the best donor stewartship). 


    I just don't see a pledge as a debt since there really isn't a recourse to get a donor to pay a pledge...it is like an honor/promise to me, but I guess if the law sees it as a debt I can see your point.


    Joanne

     

    I know it's extreme, but that is how the law (and, just as importantly FASB and your auditors) treats it.


    It's rare, but if you think back to the Bernie Madoff scandal, many very rich folks had made generous long-term pledges to lots of nonprofit organizations based on their anticipated gains from what turned out to be bad investments.  Those orgs made plans based on that projected income. When that wealth suddenly vanished and donors began defaulting on their pledges the organizations were forced to take the donors to court to remain solvent.


    It's rare.  It's ugly when it happens.  But best to be safe.  The FASB rules are there for good reasons (and why RE is designed so that you can't make a MG Pledge Payment against a "normal" Pledge).


    Check with your auditors and the MG company.  They may be okay with using the matching money that way, but I'd want them both to to approve before recording the payment that way.


     

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