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  • 1.  Donor Advised Funds

    Posted 12-09-2020 07:28 AM
    I am hoping someone can provide some guidance around the optics of gifts from a donor advised fund. We recently received a $1M gift from a donor advised fund that was going towards a previous fiscal year pledge on our system.
     
    Based on what I believe is best practice, we reduced the pledge by $1M, thereby reducing the commitment amount for that previous fiscal year and added a $1M gift on our system for our current fiscal year, thereby creating a new commitment.
     
    The dean of the school who benefitted from that gift questioned the optics around reducing commitment from a previous fiscal year and adding a commitment to our current fiscal year.
     
    Did we process the gift appropriately? Is there some way around the optics of what the dean considers 'cooking the numbers'?
     
    Thank you in advance for any assistance or guidance you can provide.
     
    Kathy
     
    Kathleen E. Stuber
    Assistant Vice President for Advancement Services
    Division of University Advancement
    University at Buffalo
    1010 Kimball Towers
    Buffalo, NY 14214
    716-881-7492
     
     
     
     
     
     


  • 2.  RE: Donor Advised Funds

    Posted 12-09-2020 07:34 AM
    You did process this correctly.  And you did not truly create a new commitment.  You processed an outright gift.

    Optics are in the eye of the beholder.  I encourage clients to use coding to differentiate between pledges written down by DAFs and Family Foundations from pledges written down due to donor cancelation.  You can use similar coding to note a DAF gift that is "replacing" a pledge.  You can then generate reports that clear the optics air.

    John

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard





  • 3.  RE: Donor Advised Funds

    Posted 12-09-2020 07:53 AM

    Thanks John – I agree optics are in the eye of the beholder and it took a half of a day for me to explain that the total amount did not change ��.

    Kathy

     




    Original Message


  • 4.  RE: Donor Advised Funds

    Posted 12-11-2020 01:11 PM
    You did it right. Unfortunately, doing it right, in this case, looks funny. The only way around it is to rely on the IRS's interim guidance and simply allow DAFs to pay pledges directly - but that's not an option for many orgs. This indirect method of writing down the value of the pledge and not linking the gift to the pledge, but then using a note or code to still practically link the gift, just not in the way that other gits are linked is a very special form of mass delusion we're all engaging in. Your dean is simply pointing out the obvious, and they're not wrong about it.

    One can only hope for a formal ruling someday that resolves this issue.


    Thank you,
    Isaac Shalev
    CRM Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

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