If they stay on your books, you would fully reserve against them which provides a net value of zero on our financial statements.
Bob Swanson, CPA
Controller
Bowling Green State University
1851 N. Research Drive
Bowling Green, Ohio 43403
rswanso@bgsu.edu<mailto:
rswanso@bgsu.edu>
w 419.372.8597
On Fri, Jun 7, 2019 at 4:53 PM Jones, Carol B <
Carol.Jones2@uhhospitals.org<mailto:
Carol.Jones2@uhhospitals.org>> wrote:
What do you do when pledges backed by irrevocable gift agreements go unpaid?
It was suggested in a recent meeting that we not write off any long-unpaid pledges created with irrevocable gift agreements. The thinking was that at some point those donors or their heirs might fulfill the pledges – even those for which we have had no response from the donors for several years. (Fortunately, there are not a lot of these – but enough to raise the question and determine our process.) To accomplish this, we determined that we could mark the pledges Conditional to remove them from cash forecasting – but leave them otherwise as is on the donors’ records. Then if a payment were received, we would still have the pledge available.
I’m not really on board with this idea. I think it gives us a more accurate picture of the donor’s giving history if we see that a pledge was written off, particularly if good notes explaining why it was written off were included on the record. (Of course, those notes should exist to describe all attempts made to collect on the pledge, whether or not we write it off….) We should still be able to adjust and apply a payment to a written-off pledge – though the pledge might not be obvious to the processor when processing gifts in a batch.
What are your thoughts on this? After making attempts to work with the donors on their completion, would it be better to write off the pledges or leave them as is? Is there a downside to either choice?
Thanks,
Carol
Carol BC Jones
Manager, Development Data and Reporting
Institutional Relations and Development
University Hospitals
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