Seems to me what you are receiving is a gift of 25% of the interest earned
on the funds held by the foundation. Recording / counting a bequest of
$400,000 means you need remember that you can't count the gift of the
interest when it is received from the foundation in future campaigns. Could
be more than 25 years before you would realize the entire amount.
Why not record the bequest at the anticipated first interest distribution
and then you can count all future payments in future campaigns?
Administratively, makes things much easier. Or what am I not understanding?
Jane Schroeder
Accounting & Advancement Analyst
Augustana University
2001 S. Summit Ave.
Sioux Falls, SD 57197
jane.schroeder@augie.edu
On Wed, May 15, 2019 at 11:53 AM John Taylor <
johntaylorconsulting@gmail.com>
wrote:
> Following CASE Guidelines, this would be akin to a trust held outside and
> you would count 25% of the *current verified value* in your fundraising
> totals and assigned to the individual for hard credit.
>
> This assumes several key factors:
>
> 1. The foundation is identified as the trustee only - essentially
> mandated to serve as a pass-through for the individual to you
> 2. You have verified the estimated value
> 3. The foundation cannot change terms
> 4. Your institutional policy counts all bequest expectancies at full
> face value - not discounted based on the donor's age (as suggested by CASE)
> 5. This is recorded as a revocable expectancy - not a gift and not
> irrevocable (the donor can still change their mind while alive)
>
>
> John H. Taylor
> Principal, John H. Taylor Consulting
> 2604 Sevier St.
> Durham, NC 27705
>
johntaylorconsulting@gmail.com
> 919.816.5903 (cell/text)
>
> Serving the Advancement Community Since 1987
>
>
> On Wed, May 15, 2019 at 12:22 PM Janette Koehn <
>
Janette.Koehn@millersville.edu> wrote:
>
>> I guess it’s the value I wasn’t clear on. The donor is alive and well.
>> Language in the paperwork says its an irrevocable gift to the Foundation.
>> The donor has estimated the value of his estate to be given to the
>> Foundation as $400K but we will eventually receive the interest earned on
>> that in perpetuity annually upon his death. So do I book the bequest at
>> the $400K estimated principal to be given to the Foundation, treat it like
>> a trust held outside? Do I book it to the donor or the Foundation?
>>
>>
>>
>> Thanks again!
>>
>> Janette
>>
>>
>>
>> *From:* Advancement Services Discussion List [mailto:
>>
FUNDSVCS@LISTSERV.FUNDSVCS.ORG] *On Behalf Of *Hejnal, Alan
>> *Sent:* Wednesday, May 15, 2019 8:40 AM
>> *To:*
FUNDSVCS@LISTSERV.FUNDSVCS.ORG
>> *Subject:* Re: [FUNDSVCS] how to book a pledge for future interest
>>
>>
>>
>> CAUTION: This email originated from outside of Millersville. Do not click
>> links or open attachments unless you recognize the sender and know the
>> content is safe.
>>
>>
>>
>> I’m not sure of the details of your bequest.
>>
>>
>>
>> If the donor notified you of a bequest intention/estate provision as
>> described, and if the terms of the bequest are that 25% of the earned
>> income are irrevocably designated to your university in perpetuity, as John
>> clarifies, I would agree with John.
>>
>>
>>
>> On the other hand, if the donor has died and the bequest to the community
>> foundation has been realized, and, further, again, if the terms of the
>> bequest are that 25% of the earned income are irrevocably designated to
>> your university in perpetuity, that sounds very like the equivalent of a
>> perpetual trust, and you could record a completed gift of 25% of the amount
>> of the bequest. (After all, the proceeds in perpetuity are the same
>> whether you hold the asset or the community foundation holds the asset, so
>> you have the equivalent of having received the permanently restricted
>> asset.)
>>
>>
>>
>> My US$0.02 worth; the usual disclaimers apply.
>>
>>
>>
>> Good luck!
>>
>>
>>
>> *Alan*
>>
>>
>>
>> *Alan S. Hejnal *
>>
>> Data Quality Manager
>>
>> Smithsonian Institution - Office of Advancement
>>
>> 600 Maryland Avenue SW, Suite 600E
>>
>> P.O. Box 37012, MRC 527
>>
>> Washington, DC 20013-7012
>>
>> (: 202-633-8754 | *:
HejnalA@si.edu
>>
>>
>> [image: SNAGHTML5cbfa34] <https://www.si.edu/>
>> [image: AASP_FundSvcs_LOGO-01(040pct)(mark)]
>>
>>
>>
>>
>>
>> *From:* Advancement Services Discussion List <
>>
FUNDSVCS@LISTSERV.FUNDSVCS.ORG> *On Behalf Of *John Taylor
>> *Sent:* Wednesday, May 15, 2019 8:19 AM
>> *To:*
FUNDSVCS@LISTSERV.FUNDSVCS.ORG
>> *Subject:* Re: [FUNDSVCS] how to book a pledge for future interest
>>
>>
>>
>> I would essentially follow CASE Guidelines - as well as your
>> institutional protocol for recording and counting revocable gifts.
>>
>>
>>
>> So the question is, what is your own policy for counting bequest
>> expectancies? Assuming that you have all the same paperwork for this new
>> commitment and the community foundation has no leeway in changing
>> designations, then I would use the same current calculation for counting
>> these - but book only 25% of the current value as a revocable commitment.
>>
>>
>>
>> John
>>
>>
>>
>> John H. Taylor
>>
>> Principal, John H. Taylor Consulting
>>
>> 2604 Sevier St.
>>
>> Durham, NC 27705
>>
>>
johntaylorconsulting@gmail.com
>>
>> 919.816.5903 (cell/text)
>>
>>
>>
>> Serving the Advancement Community Since 1987
>>
>>
>>
>>
>>
>> On Wed, May 15, 2019 at 7:58 AM Janette Koehn <
>>
Janette.Koehn@millersville.edu> wrote:
>>
>>
>>
>> A donor made a bequest to a community foundation for the principal amount
>> with the stipulation that our university will get 25% of the interest
>> earned for life estimated at 10,000 a year.
>> It's called a designated fund not a donor advised fund but how would we
>> book it? Currently I have it booked as a bequest at $0 with all pertinent
>> details just to keep track of it but we would like to count $ for our
>> current campaign. Any suggestions appreciated!
>>
>>
>>
>> Thanks,
>>
>> Janette
>>
>>
>> Fiscal Technician
>>
>> *Development Office*
>>
>>
>>
>> *MILLERSVILLE UNIVERSITY*
>>
>> P.O. Box 1002, Millersville, PA 17551-0302
>>
>> Phone: 717-871-7782 | Fax: 717-871-7530
>>
>>
Janette.Koehn@millersville.edu /
www.millersville.edu
>> <https://nam02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.millersville.edu%2F&data=02%7C01%7CHejnalA%40SI.EDU%7C5679a3518e454f9da65908d6d92f9f76%7C989b5e2a14e44efe93b78cdd5fc5d11c%7C1%7C0%7C636935195912395797&sdata=AkaJ4JbQwumjJuvlkDRxrZoxYoya0qQFWxhEM07L6KI%3D&reserved=0>
>>
>>
>> *Have an impact. **Make a gift today*
>> <https://nam02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fmville.us%2Fgive2mu&data=02%7C01%7CHejnalA%40SI.EDU%7C5679a3518e454f9da65908d6d92f9f76%7C989b5e2a14e44efe93b78cdd5fc5d11c%7C1%7C0%7C636935195912395797&sdata=oPIrE0yugV1a8g5n8FI8gI3eyk4ONZtAxfIKI8rKEgc%3D&reserved=0>
>>
>>