A pledge payment from an org to satisfy an individual's pledge

Patty Neumeier · January 2016

We had an individual make a pledge and some of his payments will be coming from his business. Whose record should these business payments go to? They need to be applied to the pledge. Can a closely-held company's donations be added to the individual's record?

shani traum · January 2016

We put the payment on the record that actually made the payment. We then apply the gift to the individual's pledge and if the payment came from the org, soft credit it to the indiv.

JoAnn Strommen · January 2016

We deal with this frequently. When payment received from the business, it is entered with them as donor and applied to the individual's pledge. (If the person is the owner of the business we usually SC the business for the pledge/SC individual for payments so complete record visible on either record.)

I don't understand what you mean by "reluctant to add to the individual's record, for tax purposes." Your record in RE should not make any difference.

Patty Neumeier · January 2016

What I meant is that when we issue the receipt, which can be used for tax purposes, it will be generated from which ever record we put the gift under. So I was struggling with putting a gift in the individual's record--even tho it was to satisfy his pledge. I did not know i could apply a gift from an organization to the pledge of an individual. That helps.

James Andrews · January 2016

IRS says people can't pay off their individual pledge with an organization's funds.

What I've seen most people generally do in this situation is you adjust the pledge down the amount of the payment, enter the payment as a cash gift and soft credit the individual.

I don't know why this very obvious legal loophole exists but there you have it.

JoAnn Strommen · January 2016

What IRS pub are you getting that info from? In RE the word "organization" covers a broad range: large corporations, foundations, donor advised funds, local companies, mom & pop shops, etc., etc. Before I change our procedure regarding paying pledges I'd need to see the IRS publication.

The only regulations I've come across that do not allow payment of personal pledges are a couple. I can not pay my personal pledge with money from my family foundation or with a designation from a donor advised fund. I can pay my pledge with a check from my little gift shop or my insurance agency, or even my profit-sharing account of our law firm, etc.

James Andrews · January 2016

well how about that. apparently i've been parroting fundsvcs wrongly all this time! never been happier to be wrong.

JoAnn Strommen · January 2016

Gotten lots of great info from fundsvcs also. If you can find it there, please share.

Dawn Lowe · January 2016

I have a similar situation, I have a deceased donor who has an outstanding pledge, his family continues to honor his pledge. Each year his Foundation makes a payment towards his pledge balance. I recorded the payment under the Foundation's Constituent record, link it to his pledge, (his record is set to be automatically soft credited) the foundation gets a receipt for the donation.

Christine Cooke 2 · January 2016

Put it on the Org record and apply the $$ to the pledge of the individual

A pledge payment from an org to satisfy an individual's pledge

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