Best practice for entering a "pledge" for a donation made through a Charitable Trust

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Mario Lemos
Mario Lemos ✭
Ancient Membership Photogenic
in Blackbaud Raiser's Edge NXT®: General Discussion
We have a donor that has indicated that they will be making donations through a charitable foundation.  They gave a total amount and indicated that they would be making donations over a 4/5 year period through the charitable foundation. Because they have to comply with IRS rules and are working through the charitable foundation, they cannot formally "pledge" the total amount, although it is what they expect to give.

 

I wanted to know how other organizations record this in RE: as a pledge and payments towards the total or record the donations individually as they come in. The donor wants to be recognized in printed material for the total amount.

 
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  • Candace Chesler
    Candace Chesler ✭
    Ancient Membership Facilitator 2 Name Dropper Photogenic
    Mario - Great question.  Over the years I have had numerous conversations with accountants, fundraisers and auditors about those pesky "pledges".  True - monies from a donor advised fund cannot be used to pay off a pledge that is booked as a pledge in your general ledger.  But a donor can make a "commitment" to pay $50K over a 5 year period - paying $10K each year form a donor advised fund.  When I have a commitment like that - I use an attribute on the constituent record to indicate the total commitment.  I then use a gift attribute on the payments to indicate that these payments go towards the total commitment.  A "pledge" of $50K is never recorded in RE - but 5 gifts of $10K each are entered.  

    It requires some careful reporting - and understanding from the fundraising staff about these gifts will be recorded.  AND - it requires consistent data entry for five years.



     
  • Jane Owsley
    Jane Owsley ✭
    Tenth Anniversary Facilitator 1 Photogenic
    Hello.  We enter to gift in the DAF record and soft credit the individual (or couple) that is connected to the DAF giving; I've found it's helpful to enter "Donor Advised Fund" in the Gift Subtype to highlight the uniqueness of this giving situation, especially when pulling gift information for individuals that we want soft credits to be included in.  



    We are not integrated with FA, so we do enter their intended commitment as a "pledge" in the individual's record (to hold for stewardship/prospect tracking), but do not book this commitment on the general ledger.  Then when the gift comes from the DAF, we use the "Load Pledge(s) From..." button to attach the gift to the pledge held in the individual's record.



    For the acknowledgment letter to the individual, we do not include tax language, but use language to inform (and thank) the donor of the gift made possible by the distribution from the DAF.



    Jane Owsley
  • Elaine Tucker
    Elaine Tucker ✭
    Ancient Membership Facilitator 2 Name Dropper Photogenic
    We enter a pledge on the individual donors record, and when the "payment" comes in we enter in on the DAF record, soft credit the individual and then manually adjust/reduce the pledge amount by the payment amount.... so eventually, the pledge ends up being zero once it is paid.  Yes this is very cumbersome, but we only have a couple of these so this works for us.



    We do this so in any giving report, or donor engagement report, our PTB can see the gifts on the reports and accounting can plan what will be coming in. We are integrated with FE and our accounting department has ok'd this process.
  • John Heizer
    John Heizer ✭
    Ancient Membership Facilitator 3 Photogenic
    We enter a standard Pledge on the donor's record, but we have a Gift Type of "Psuedo pledge" that we use to indicate that this isn't a legally binding pledge made by the donor.  Payments get entered on the DAF record and applied to that pseudo pledge.
  • Dorothee Weiler
    Dorothee Weiler ✭
    Tenth Anniversary First Reply

    John Heizer:

    We enter a standard Pledge on the donor's record, but we have a Gift Type of "Psuedo pledge" that we use to indicate that this isn't a legally binding pledge made by the donor.  Payments get entered on the DAF record and applied to that pseudo pledge.

    John, did you create a new Gift Type? How did you do that? Or new Gift Subtype?

  • Christine Cooke 2
    Christine Cooke 2 ✭
    Ancient Membership Facilitator 4 Name Dropper Photogenic
    We have recorded the amount as a Pledge with GiftSubType of Verbal Promise.  We do not report these to the Finance Department or the Charitable Trusts.  It is just for our department as a note as to what is supposed to be coming and when.



    We have had other donors, not through the donor advised fund route that also would not sign a pledge form, those are also entered as Verbal Promise.



    Works well.
  • John Heizer
    John Heizer ✭
    Ancient Membership Facilitator 3 Photogenic

    Dorothee Weiler:

     

    John Heizer:

    We enter a standard Pledge on the donor's record, but we have a Gift Type of "Psuedo pledge" that we use to indicate that this isn't a legally binding pledge made by the donor.  Payments get entered on the DAF record and applied to that pseudo pledge.

    John, did you create a new Gift Type? How did you do that? Or new Gift Subtype?

     

    A Gift Subtype.  Sorry for not being more clear in my original response.

  • Jane Kenny
    Jane Kenny ✭
    Ancient Membership Facilitator 1 Photogenic
    We enter verbal committments as pledges and used the subtype as non-binding.  Testamentary commitments are not coded as non-binding. They may have a subtype like estate gift, bequest, Charitable Remainder Trust, etc.  This allows us to slice and dice for reporting purposes.



     

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