FundSvcs Community

We were recently attending a workshop with a financial strategist who suggested that using the following language in a pledge letter from a donor would enable us to apply the Donor Advised Fund's grant payment directly to the donor's pledge: *I promise to request $5,000/year from my DAF over the next five years.* Assuming that we give hard credit for the grant payment to the DAF and soft credit to the donor who initiated the pledge, can we do this? We've been going through a complicated process of writing off the original pledge and creating a new pledge by the DAF in order to avoid using the DAF to pay off the donor's pledge. This sure would simplify things for us if it's allowable. Thanks! -- *Gwen Donev* Director of Advancement Services Gustavus Adolphus College 800 West College Avenue Saint Peter, Minnesota 56082 Email: gwendonev@gustavus.edu Office: 507.933.6515

Please see my paper on the download site on who can make a pledge and who can pay on it. You cannot record this sort of pledge on any record. Only the legal holder of an asset can make a commitment of this nature. The paper goes into great detail. Please let me know if you have questions after reviewing it. 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 Thu, Aug 1, 2019 at 11:40 AM Gwen Donev <gwendonev@gustavus.edu> wrote: > We were recently attending a workshop with a financial strategist who > suggested that using the following language in a pledge letter from a donor > would enable us to apply the Donor Advised Fund's grant payment directly > to the donor's pledge: > > *I promise to request $5,000/year from my DAF over the next five years.* > > > Assuming that we give hard credit for the grant payment to the DAF and > soft credit to the donor who initiated the pledge, can we do this? > > We've been going through a complicated process of writing off the original > pledge and creating a new pledge by the DAF in order to avoid using the DAF > to pay off the donor's pledge. This sure would simplify things for us if > it's allowable. > > Thanks! > > -- > *Gwen Donev* > > Director of Advancement Services > > Gustavus Adolphus College > > 800 West College Avenue > > Saint Peter, Minnesota 56082 > > > > Email: gwendonev@gustavus.edu > > Office: 507.933.6515 >

But what does that really change? You’ve still allowed a donor to pledge money that isn’t theirs. Basically, they’ve given you a promise to ask, rather than a promise to give.—Bill _____________________________________________________________________________________________________________________________ We were recently attending a workshop with a financial strategist who suggested that using the following language in a pledge letter from a donor would enable us to apply the Donor Advised Fund's grant payment directly to the donor's pledge: I promise to request $5,000/year from my DAF over the next five years. Assuming that we give hard credit for the grant payment to the DAF and soft credit to the donor who initiated the pledge, can we do this? We've been going through a complicated process of writing off the original pledge and creating a new pledge by the DAF in order to avoid using the DAF to pay off the donor's pledge. This sure would simplify things for us if it's allowable. Thanks! -- Gwen Donev Director of Advancement Services Gustavus Adolphus College 800 West College Avenue Saint Peter, Minnesota 56082 Email: gwendonev@gustavus.edu <mailto:gwendonev@gustavus.edu> Office: 507.933.6515

No, this won't work. First, unless you have a written pledge from the fund holder (the bank, not the donor) you don't have a promise to pay, and thus you have no pledge, neither on the donor record nor on the DAF record. This can certainly feel artificial and legalistic to the donor, because in practice, the DAF does obey the donor's gift recommendations, but it's still the correct application of the regulations. On Thu, Aug 1, 2019, 11:41 AM Gwen Donev <gwendonev@gustavus.edu> wrote: > We were recently attending a workshop with a financial strategist who > suggested that using the following language in a pledge letter from a donor > would enable us to apply the Donor Advised Fund's grant payment directly > to the donor's pledge: > > *I promise to request $5,000/year from my DAF over the next five years.* > > > Assuming that we give hard credit for the grant payment to the DAF and > soft credit to the donor who initiated the pledge, can we do this? > > We've been going through a complicated process of writing off the original > pledge and creating a new pledge by the DAF in order to avoid using the DAF > to pay off the donor's pledge. This sure would simplify things for us if > it's allowable. > > Thanks! > > -- > *Gwen Donev* > > Director of Advancement Services > > Gustavus Adolphus College > > 800 West College Avenue > > Saint Peter, Minnesota 56082 > > > > Email: gwendonev@gustavus.edu > > Office: 507.933.6515 >

A promise to ask is fine, but it doesn’t seem like it would buy you much. It’s not a commitment that you would receive anything, so it’s not anything that you could record as a pledge—and if it were something that you could record as a pledge, you couldn’t record a DAF grant against it! It might function in the same way as some institutions are using a statement of intent or some other non-binding language—useful in tying together multiple grants from a DAF in the database, but nothing that you could count under CASE standards or record on the finance system. 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<mailto:HejnalA@si.edu> [SNAGHTML5cbfa34]<https://www.si.edu/> [AASP_FundSvcs_LOGO-01(040pct)(mark)] From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Gwen Donev Sent: Thursday, August 1, 2019 11:40 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: [FUNDSVCS] Pledge language which enables payment from a DAF We were recently attending a workshop with a financial strategist who suggested that using the following language in a pledge letter from a donor would enable us to apply the Donor Advised Fund's grant payment directly to the donor's pledge: I promise to request $5,000/year from my DAF over the next five years. Assuming that we give hard credit for the grant payment to the DAF and soft credit to the donor who initiated the pledge, can we do this? We've been going through a complicated process of writing off the original pledge and creating a new pledge by the DAF in order to avoid using the DAF to pay off the donor's pledge. This sure would simplify things for us if it's allowable. Thanks! -- Gwen Donev Director of Advancement Services Gustavus Adolphus College 800 West College Avenue Saint Peter, Minnesota 56082 Email: gwendonev@gustavus.edu<mailto:gwendonev@gustavus.edu> Office: 507.933.6515