The Fidelity Charitable Gift Fund (or equivalent) is the legal donor. No question. Although it’s probably the sponsoring organization of donor-advised funds rather than the DAF itself, if you want to be technical.
There are certain implications that follow from the sponsoring organization being the legal donor. The sponsoring organization needs to get the written acknowledgment (if they want one). When putting together the Schedule of Contributors for the IRS 990, we need to aggregate all gifts by the legal donor, so here by the sponsoring organization across all its DAFs.
How that fact and those implications are reflected in a particular database implementation is another question. Most commonly, I think, there is a record for Fidelity and the hard credit goes on that record. It’s a relatively straightforward approach. It also has its drawbacks. Gifts are being advised on the level of the individual DAF, and it can be challenging to get a picture of giving by an individual DAF in the complexity of the 3,000 transactions on the Fidelity record. You can get an approximation of that by looking at the soft credit on the record of the advisor of the DAF—if the advising is done by one person, and not by different members of a family who each advise different gifts (spouses, siblings, other members of a family, one generation and the next and the next, etc.—I’ve seen all those variations).
If, on the other hand, one wanted to set up database records for the individual DAFs and hard-credit them, some things are easier, and some are harder. It’s easier to see the giving related to a particular DAF. Receipting would need to be tweaked to generate the written acknowledgment identifying the sponsoring organization as the donor. The IRS 990 report would need to aggregate all the DAFs associated with a sponsoring organization. Neither of those adjustments are at all difficult.
Personally, other things being equal, I’d like to hard-credit the sponsoring organization and soft-credit both the advisor and the individual DAF. Doesn’t mean that’s the only way to do it, and that all of you who would do it another way are wrong.
There are a number of places where there are different defensible ways to address somewhat-complex situations. For example, if I have a consulting business that is not a separate legal entity and that I report to the IRS on the Schedule C of my personal tax return, and I make a gift on a check naming the consulting firm, CASE wants that gift to be counted in the corporate category not the personal category. But there are different ways to set that up in the database. I can use only one database entity and flag that gift somehow to get counted in the corporate category. Or I can create a separate database entity, record the gift there, and, if necessary, aggregate the giving for the IRS 990 Schedule of Contributors, because there is only one legal entity. Different approaches.
If we have a gift from a married constituent, we might create a record for each spouse and record hard credit on the record of whichever spouse signed the check. Or we might split hard credit 50-50. Or, if only one spouse is an alum, we might not create a record for the non-affiliated spouse at all and just record the gift on the record of the alum regardless of who signed the check. I’ve seen all those implementations. In any of these approaches, we likely have the written acknowledgment include the names of both spouses, regardless of how we’ve chosen to implement the process in our database. If we only put hard credit on one spouse, we have a little more complexity counting both spouses as donors for the VSE and U.S. News. It’s manageable. If we split hard credit 50/50, though, we don’t have to worry about that and both spouses get counted straightforwardly just looking at hard credit. Different approaches.
We have an interesting implementation related to matching gifts. Back a system or two ago, our Institutional Relations team at the time wanted to be able to see a corporation’s direct giving without the record being cluttered up with a myriad of matching gifts, which arise from a very different process and only inform the cultivation of the corporation in a minor way. So the database was set up with one primary record for a corporation and a separate record for the corporation’s matching gift program, even if they’re the same legal entity. We looked at that structure in our current environment and decided to leave it in place. It means that we have to aggregate the two records, if necessary, for our IRS 990 Schedule of Contributors (much like aggregating the different DAFs at the same sponsoring organization). I’ve never worked with an implementation that did it that way before, but it works just fine. Different approaches.
Outside the gift sphere, if I’m recording employment, most systems will let me link my employment to a separate entity for the employer, or just put the name of the employer in the employment record as free text. In many/most cases, there are advantages to creating separate records for the employer and linking the employment, and provide functionality that facilitates matching gifts, lets me see an organization’s employees in one place, etc. But do I create a separate entity for my part-time lawnmower repair business that I run out of my garage? Maybe, maybe not. Different approaches.
The IRS provides us with a set of requirements to meet. CASE provides us with other requirements, and so do financial accounting standards and our colleagues in finance. There are assumptions built into our advancement software, which may therefore work better with one sort of implementation rather than another. None of those mean that there is only one way to implement functionality, or that my way of doing it is right and yours is wrong.
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 | •:
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From: Advancement Services Discussion List <
FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Bill Wong
Sent: Tuesday, September 3, 2019 4:00 PM
To:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG
Subject: Re: [FUNDSVCS] Donor Advised fund where there isn't a named fund
I understand that’s what they’re doing. It’s just incorrect. Fidelity is the DAF. Fidelity made the gift. You can make a Rose Dixon Family Foundation record if you want to, and even soft credit them, but Fidelity is the donor of record.—Bill
From: Advancement Services Discussion List <
FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of Rose Dixon
Sent: Tuesday, September 3, 2019 3:57 PM
To:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG>
Subject: Re: [FUNDSVCS] Donor Advised fund where there isn't a named fund
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In all cases of DAFs from an entity like Fidelity, they create the donor advised fund as a record, c/o Fidelity, and hard credit, rather than 50 named DAFs having hard credit on the Fidelity record.
So rather than create a record for Fidelity, they create:
Rose Dixon Family Fund
c/o Fidelity
xxxx
xxxx
[Semper Fi Fund]
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Rose Dixon
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M: 617.413.9537
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From: "
fundsvcs@listserv.fundsvcs.org<mailto:
fundsvcs@listserv.fundsvcs.org>" <
FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> on behalf of Isaac Shalev <
isaac@SAGE70.COM<mailto:
isaac@SAGE70.COM>>
Reply-To: "
fundsvcs@listserv.fundsvcs.org<mailto:
fundsvcs@listserv.fundsvcs.org>" <
FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG>>
Date: Tuesday, September 3, 2019 at 3:52 PM
To: "
fundsvcs@listserv.fundsvcs.org<mailto:
fundsvcs@listserv.fundsvcs.org>" <
FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:
FUNDSVCS@LISTSERV.FUNDSVCS.ORG>>
Subject: Re: [FUNDSVCS] Donor Advised fund where there isn't a named fund
They shouldn't be hard-crediting anyone except the entity on the check, the entity actually making the contribution.
On Tue, Sep 3, 2019, 3:47 PM Rose Dixon <
00000038b5818fff-dmarc-request@listserv.fundsvcs.org<mailto:
00000038b5818fff-dmarc-request@listserv.fundsvcs.org>> wrote:
Questions for you all!
If you receive a donation from The American Endowment Foundation, or Fidelity, or Schwab, and the letter DOES NOT give a DAF name, such as “Rose Dixon Family Fund” but it does give you Rose Dixon’s address to send an acknowledgment (w/o tax wording) – how do you record this gift?
In cases where the letter states “Rose Dixon Family Fund” our gift processing folks create a record for “RDFF” (hard credit) and a record for Rose Dixon (soft credit). But, when we get a letter that doesn’t have a name of the “fund” they put it on the individual record for Rose Dixon.
If this is the case, then ALL DAF gifts could be put on the individual record, ala the Bill Connors (and avoid creating two records, and having to soft credit) way, right??
Rose
[Semper Fi Fund]
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Rose Dixon
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M: 617.413.9537
E:
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