Entering gifts that have fees taken out

Sunshine Watson:

I've done it the same as Daniel at every org. The full amount that the donor gave is recorded on their record. They are recognized for their full donation. The fees are the cost of doing business, like credit card fees. That is a reconciling item for finance.

Keri Barnhart:

Hi Lynn -

I have begun entering and reporting on these donations after reading this topic. You can see my response earlier.


We have a fairly small active donor base. There is not a huge number of DAFs or similar giving, but those who do use DAFs are major donors (of course!) and we do have quite a few who give frequently and generously through their employer's payroll deduction and match programs, which use CyberGrants or YourCause for processing.


My main concern is not with who legally donated the money for tax purposes. I want to make it as easy as possible to identify who is driving donations and who we should be recognizing. Since the DAFs are major donors, we're handling them with an extra touch anyway, and it takes very little time or effort to use donor recognition as the focal point. My answer would be different if I were talking about a larger donor base and more staff to specialize in handling RE data, or if we were directly linked to the GL and needed transactions to match the accounting journal entries exactly.

Regarding credit:

1. credit the gift to the entity you want to put on your donor wall or go back to for the next solicitation

2. soft credit related entities where you want to see the gift in their giving totals

3. create a duplicated gift with type Other to track the legal donor, if it is a DAF or in the case of HQ/branch gift tracking. i don't bother for the Pass Through corps.


For DAFs, the credit goes to the fund and SC to the advisor. For Benevity, YourCause, etc., credit only goes to the employee who directed the gift and there is no SC (except automatic relationship SC).


The Other gift type is any gift that should not be used for fundraising reporting but which we need to track for some reason. It is easy to exclude them from reports or report on them exclusively this way. I always ensure that every part of the gift entry is identical between the Cash/GIK and Other - except for the receipt amount and the donor. This allows me to deduplicate end of year reporting to show the legal entity for the 990. I assign a receipt amount of $0 to DAFs receiving hard credit and I have written it into my 990 query to exclude receipt amount = 0 for Cash/Pay-types from the totals.

Regarding recording the platform and subtypes:

To handle tracking of the host foundation or pass through corp I use Gift Code for the organization that handled the payment - The Community Foundation, BoA - CyberGrants, etc. I will pull this into the conditional merge when acknowledging the donors to indicate how the donation got to us. Gift Subtype is used for things that aren't really payment methods but aren't really appeals or gift types, either - it indicates why a gift is the Other type (DAF, Corporate, Planned Gift, Grants) or to allow for further report specificity (Payroll Deduction, Matched Gift, "Grants", Recurring Gifts where there has been no agreement about the gift, but it comes like clockwork every month anyway). I chose to use Code and Subtype this way based on where they are available for reporting and the ease of using them in NXT reports, eventually.


By the way, I do use the Acknowledge and Receipt fields specifically here! The credited donor's gift gets marked Do Not Receipt but also Not Acknowledged. The letter code points to an acknowledgement/thank you format, not a receipt format. The Other gift gets both receipted and acknowledged and the conditional mail merge will have a hinge on the Other gift type to be able to do that.




I still haven't decided how to indicate fees in the gift records, so that I can equal out my totals with accounting's. I am using Receipt Amount right now, but I'm not fully committed to it.


What I am committed to is avoiding the whole mess of how to choose the Soft Credit option for queries and report parameters. And making sure that Susy Smith gets appropriate recognition for the $30 she donates through monthly payroll deduction and which Benevity processes.

 

Keri Barnhart:

Hi Judy,


Bill Connors has written and talked about recording based on recognition vs IRS reports a lot! I have heard him/read his work enough over the years that when I came into my current position and saw that gifts had been entered inconsistently through the years regarding donor credit, I decided to implement this method. (Again - we're a fairly small donor base! This wouldn't necessarily have worked at my previous org, with decades of doing it the 990 way and dozens of RE users who would have to remember they couldn't just scrape all gifts/gift counts, and with much more complicated recognition/soft credit and relationships.)


I use Receipt Amount to track the tax deductible portion of a gift. If someone gives $100 as entry to a fundraising event and there's a FMV/benefits valued at $23 for catering, the receipt amount is only $77, right? And you can do a pivot report of total gift amount compared to total receipt amount. It's the same basic idea, but with a separate gift entry for the 990 donor. Thus, if Betsy donates $100 via her family's DAF at the Jewish Community Foundation, we'll have two gift entries:

 

Gift Amount Gift Type Gift Code Letter Code Reference Receipt Amount Receipt $100 Cash Jewish Community Foundation DAF (Acknowledgement) Betsy and Tom Smith Family Foundation $0 Do Not Receipt $100 Other Jewish Community Foundation DAF (Receipt) Betsy and Tom Smith Family Foundation $100  

Data entry for the hypothetical DAF gift

Donor

Betsy Smith (soft credits: Tom Smith, Smith Family Foundation)

Jewish Community Foundation

When I do fundraising reports, I exclude all gift types of Other - for my current org, this gift type is only used for things that can't be included with fundraising reports for whatever reason. When I do the 990 or other annual statements that require the legal donor only, I use the Receipt Amount. And, finally, I have a letter code for DAFs that uses a conditional based on Gift Type to generate either an acknowledgement that says "Thank you for directing a gift through the {Reference} at {Gift Code}" with no receipt details or a receipt that is the reverse "Thank you for the donation advised by the {Reference}" along with receipt details.


To refer back to the original topic of this thread - about gifts with fees taken out - typing this out for you now makes me realize I can't use the receipt amount if I want to be able to adequately acknowledge the donor's gift in the annual statements. It's not their fault we had to pay 17% fees to access the money. Maybe I should use an attribute for those pesky Benevity checks? I hate piling on attributes that have to be accounted for in reconciliation reports, though!