Development vs Accounting Recognizable Pledges & Donor Advised Funds

IRVING DUNN · April 2015

1.Development understandably wants to record all pledges, whether verbal or written. Accounting only wants to bring over from R/E to F/E the onces where donor has provided a signed agreement. One approach is to enter on R/E separate batches for verbal and written. Any other ideas?

2. If enter on R/E as a verbal pledge then when donor makes a payment it gets applied to a Pledge Receivable account. However, when bring over to F/E - F/E has no record of a Pledge Receivable. Looking for help on how to address this.

3. What do you do when a donor fills out a form and does not answer the question: "Will you donation come from a donor advised fund". The pledge gets record. Then payment comes in and the check is from a donor advised fund, which for GAAP are not recognizable until funds recieved. Ideas on how to handle this situation.

Thanksso much!

JoAnn Strommen · April 2015

Ugh! I know there have been past posts on the verbal pledge and someone had posted what I thought was a good way to deal with it (we don't record verbals so I didn't mark/save post). Search is not finding relevant results for me. I'm not sure I remember but it was something like the pledge was entered in a 'holding' fund that did not post over to FE. Payment when received was entered as cash gift so no issues with FE looking for accounts receivable. Holding fund pledge then deleted/adjusted.

There have also been posts on DAF. Search not finding ones I remember either. Sounded like most people entered DAF payment as gift and either wrote off or adjusted to $0 the donor pledge.

Cathy Hyman · April 2015

I can't really speak to the issue of how to record verbal pledges, as we have a policy in our office that no pledge gets recorded unless we have something in writing from the donor. However, on the issue of gifts coming from DAF, we do deal with that quite often. As mentioned in the previous comment, we also enter the gift as a cash gift and write-off that amount on their pledge. This way, we comply with DAF rules and show the appropriate balance on the donor's pledge.

Joshua Bekerman bCLO bCRE · April 2015

We do not enter verbal pledges (worth as much as the paper they are written on) as gifts. We use the Propect tab and enter a Proposal. We also track written pledges with Proposals (along with entering it as a gift type of Pledge), this way both are tracked and reported on in the same place.

If you really need/want to enter a gift for a verbal pledge, perhaps just mark them as "Do Not Post." Would you also need a code on the gift record to indicate verbal vs. written?

JoAnn Strommen · April 2015

Note: If you do mark a pledge as "do not post," be sure to have a plan for changing that status to "not posted" and updating date to current date when you enter the payment or you will have a mess with FE/accounting because RE will be processing it as a pledge payment and FE will not have a pledge on record. If you change status to 'not posted" and use current date when RE/FE post it will process just like a pledge that is paid before pledge is posted = cash gift.

If you are linked with accounting software, you can't just change pledge to "posted" as it is not posted in FE.

Joshua Bekerman bCLO bCRE · April 2015

Or, have leadership, along with your auditor's support, institute a policy that only written pledges are entered as gifts in RE. A written pledge could be as simple as a brief email from the donor confirming the verbal pledge. Allowing verbal pledges to be entered as gifts creates way more issues than it's worth, as you are now finding out. If you enter verbal pledges you basically need to come up with separate policies and procedures on how to enter, manage and report on them, and it will affect multiple departments (gift entry, development, accounting, etc.).

Susan Leslie · April 2015

We do enter verbal pledges from our donors so they can be counted towards our Campaign Goals for Development. Right now, we have about a dozen verbals to track. Our procedure is to create a gift batch by itself and mark it as "Do not post" and it is given a gift attribute of "Verbal pledge". The gift attribute allows me to decide which reports I want it included or excluded from. I then send a letter with a pledge form asking for confirmation and hope they return. Once we receive the pledge form or payment, then I change it to "Not Posted", add the date of confirmation as the post date but do not change the gift date, and then remove the verbal pledge gift attribute. I then pass the batch through so it will get posted into FE and it becomes a normal pledge. This procedure works well for us.

Nicole S · April 2015

Josh Bekerman:

We do not enter verbal pledges (worth as much as the paper they are written on) as gifts. We use the Propect tab and enter a Proposal. We also track written pledges with Proposals (along with entering it as a gift type of Pledge), this way both are tracked and reported on in the same place.

If you really need/want to enter a gift for a verbal pledge, perhaps just mark them as "Do Not Post." Would you also need a code on the gift record to indicate verbal vs. written?

Similar here -- we do record verbal pledges, I don't like it, but we do. My DD and others often do not want to press donors so sign an agreement and we have had problems with verbal pledges falling off the radar when not recorded in some way. But if it is something that I don't want to report to finance because of paperwork, I use "do not post" and a note of "verbal -- need signed agreement per so-and-so." I try to make sure that anyone who asks me to enter a verbal pledge do so in writing (email). This way if it comes up I can refer back to that. We also file the email. I also create an action of "need signed pledge agreement" so that it's on the solicitors action list until we get it.

IRVING DUNN · April 2015

Susan Leslie:

We do enter verbal pledges from our donors so they can be counted towards our Campaign Goals for Development. Right now, we have about a dozen verbals to track. Our procedure is to create a gift batch by itself and mark it as "Do not post" and it is given a gift attribute of "Verbal pledge". The gift attribute allows me to decide which reports I want it included or excluded from. I then send a letter with a pledge form asking for confirmation and hope they return. Once we receive the pledge form or payment, then I change it to "Not Posted", add the date of confirmation as the post date but do not change the gift date, and then remove the verbal pledge gift attribute. I then pass the batch through so it will get posted into FE and it becomes a normal pledge. This procedure works well for us.

THANK YOU for sharing. You provided some good ideas for us to consider.

IRVING DUNN · April 2015

Nicole San Miguel:

Josh Bekerman:

We do not enter verbal pledges (worth as much as the paper they are written on) as gifts. We use the Propect tab and enter a Proposal. We also track written pledges with Proposals (along with entering it as a gift type of Pledge), this way both are tracked and reported on in the same place.

If you really need/want to enter a gift for a verbal pledge, perhaps just mark them as "Do Not Post." Would you also need a code on the gift record to indicate verbal vs. written?

Similar here -- we do record verbal pledges, I don't like it, but we do. My DD and others often do not want to press donors so sign an agreement and we have had problems with verbal pledges falling off the radar when not recorded in some way. But if it is something that I don't want to report to finance because of paperwork, I use "do not post" and a note of "verbal -- need signed agreement per so-and-so." I try to make sure that anyone who asks me to enter a verbal pledge do so in writing (email). This way if it comes up I can refer back to that. We also file the email. I also create an action of "need signed pledge agreement" so that it's on the solicitors action list until we get it.

This helps and definitely adds value to the discussion. Thank you.

IRVING DUNN · April 2015

Susan Leslie:

We do enter verbal pledges from our donors so they can be counted towards our Campaign Goals for Development. Right now, we have about a dozen verbals to track. Our procedure is to create a gift batch by itself and mark it as "Do not post" and it is given a gift attribute of "Verbal pledge". The gift attribute allows me to decide which reports I want it included or excluded from. I then send a letter with a pledge form asking for confirmation and hope they return. Once we receive the pledge form or payment, then I change it to "Not Posted", add the date of confirmation as the post date but do not change the gift date, and then remove the verbal pledge gift attribute. I then pass the batch through so it will get posted into FE and it becomes a normal pledge. This procedure works well for us.

Development vs Accounting Recognizable Pledges & Donor Advised Funds

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