This is how we addressed this issue:
* We added a checkbox on our gift commitment form that asks the donor if the gift will be paid via a DAF.
* If it is going to be, we will enter the pledge from the donor and mark it as Do Not Post (DNP) (we use RE).
* Finance will not commit the pledge from the donor. We provide them a report each month of all of the DNP gifts we have in our system. I guess they keep some sort of running tally of such expectancies.
* Each time we receive the "payment", we process as a cash gift and manually reduce the original pledge in RE. Accounting will run the "payment" through FE, as long as there aren't any other conditions on the gift. I've created a form to go with the original pledge. We keep our DNP batches separate and when the record is opened, an annotation pops up stating that a DNP gift is on the record.
* This allows us to record the fundraising in the current year and be able to show the production for the current fiscal year.
* In the donors' minds and the gift officers' minds, the gift was made and the work was done in the current FY.
* I haven't reconciled the long-term ramifications of the original pledge drawing down to $0 and 3 or 5 payments over subsequent years totaling the original pledge affecting reporting. The only other option we have been given is that we only record the payments and having to "remember" that this donor or that donor *actually* made a larger commitment.
* We've been using this process for a little over a year. I'm sure there will be tweaks to it and I will eventually figure out how to reconcile original pledge vs. the payments recorded.
* We need to keep in mind that we work for fundraising organizations and NOT accounting organizations. As more and more donors establish and make "gifts" from DAFs, these sort of issues will become more prevalent. We will need to figure out how to make it work for the donor, fundraising and accounting.
* Not a school so I don't know how this process would stand up to CASE standards.
Hope this helps.
Scott
From: Advancement Services Discussion List [mailto:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG] On Behalf Of Hornbeck, Cynthia
Sent: Wednesday, January 23, 2019 7:54 AM
To:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG
Subject: [External] [FUNDSVCS] Payments on a pledge through Donor Advised Fund
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I have a question on the pledge payments from a Donor Advised Fund. I know we do not link them to the pledge as a payment so we have to reduce the pledge. The question I have is how is everyone reducing the pledge.
We use RE and we also have FE so everything has to be run through the GL. There are two ways I have found to reduce the pledge I just want to make sure whichever way we decided to go it will not cause a problem with the CASE and VSE reporting (which I have not had the pleasure of doing yet so I am not sure what all is reported).
Way number 1 - I can write off the installment that was paid through the donor advised fund which will leave the beginning balance of the pledge the same, but I come from a receivables background and when I see "write off" to me that says Bad Debit the money will never come in, but in this case it has come in we just could not apply it. Do either of the CASE or VSE reports take into account "write offs"?
Way number 2 - I can change the amount of the pledge (reduce it by the amount of the installment) and run this through the GL to reduce the expected amount in FE so everything will match. The problem I have with this is if we need to report on the total amount of our pledges and then how much was received we would not have the original amount of the pledge in the system so the report would be off ( and how do you explain to the donor when they request a statement showing all their pledges and they see a pledge of $150,000 where the paperwork they signed said the pledge was $200,000).
We are in the process of writing our procedures manual and I just want to make sure we can make the best informed decision and not find out we have to change it down the road to make the reporting correct.
Thank you,
Cynthia Hornbeck
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University Advancement
940-898-3894
CHornbeck1@twu.edu<mailto:
CHornbeck1@twu.edu>
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