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  • 1.  Converting a pledge to a statement of intention to give

    Posted 12-02-2024 06:33 PM

    Hi all - 

    Our donor made a pledge commitment, and we have since learned that payments will come through their workplace giving, which comes to us through Benevity via the America Online Giving Foundation.  We want to convert the pledge to a statement of intention to give in our database. Our finance office feels the only way we can do that is to have the donor's signature on a statement of intention to give (SIG) document acknowledging that the SIG supersedes their pledge. It's not the donor's fault that we didn't connect all the dots, so it seems unhelpful from a donor relations standpoint to have them jump through the hoops of new documentation. I know we can write down the pledge and note the DAF payments, but it makes an entire mess of the donor's record, IMO, particularly for gift officers to read and understand. CASE is very clear about how you should approach these kinds of workplace gifts from the outset, but what is the best procedure if you need to convert a pledge to an intention to give due to new information?  

    Thank you all! 



    ------------------------------
    Sylvia Galen
    The George Washington University
    sgalen@gwu.edu
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  • 2.  RE: Converting a pledge to a statement of intention to give

    Posted 12-02-2024 07:44 PM
    I am sorry that you are getting so much pushback. I've yet to encounter a Finance Office that has argued for this (until now). On the other hand, most of my clients have an internal policy that allows for converting a bonafide pledge to a non-binding commitment when the donor initiates payments from a third party.

    If you do not have a public pledge recording policy that allows you to make these changes, you likely need to go to the donor. But I suspect the assigned prospect manager already communicates with their donors every quarter or so. Therefore, ask them to get the donor to sign a brief document authorizing the change. The Gift Officer can blame Finance for the need but say they are requesting this due to audit requirements (or something like that).

    I don't think there are many hoops to jump through; there is only one-signing a "required" form. I know it's a pain, but given the current attitude in Finance, it's probably the only solution.

    John


    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Converting a pledge to a statement of intention to give

    Posted 12-03-2024 08:44 AM
    John - Thank you so much!  
    Is there an example of "internal policy that allows for converting a bonafide pledge to a non-binding commitment" in the files?  I didn't see one in the archives and wondered if I used the right search terms. 
    Is there something about how pledges get audited that requires getting donor approval before making a system change in how a pledge is recorded (converting from pledge to non-binding commitment)?
    Do other organizations have donors sign non-binding commitments rather than a bonafide pledge? Our paperwork clearly states that third parties can't fulfill pledges. The problem is that we may not know who the legal donor is going to be in the database until the money starts to come in (especially with workplace giving that comes from a DAF). Please share if anyone has good resources to educate gift officers about these complexities.
    Thanks everyone!
    Sylvia

      Sylvia Galen, GW MBA '21
    Assist VP, Advancement Systems & Analytics | Adv. Svcs.
    Development and Alumni Relations
    The George Washington University
    o 202-994-9373  
    sgalen@gwu.edu


    ------------------------------
    Sylvia Galen
    The George Washington University
    sgalen@gwu.edu
    ------------------------------

    Original Message


  • 4.  RE: Converting a pledge to a statement of intention to give

    Posted 12-03-2024 09:11 AM
      |   view attached
    Normally, the right to modify a pledge is in the original pledge agreement, part of a gift acceptance policy, or a Pledge Management Protocol. The latter is my preference, and I include a simple statement in that when I draft protocols for clients. Below, I will include a few paragraphs from a recent protocol I crafted.

    I am not familiar with your external auditors or their practices. However, I do know that most auditors are very keen on reviewing binding commitments. Since a binding commitment is a legally enforceable document, I feel sure that any auditor would need to see something like a policy or letter from a donor allowing the removal of that legal obligation.

    As you will see below, when I work with clients, we craft appropriate pledge agreements that allow for third-party payments while allowing the "booking" of the original pledge. I am attaching one example of such a document.

    ----------------Sample Language from John's Pledge Management Protocol------------------------------------------------

    Therefore, an entity may only make a binding pledge or promise to give if willing to assume full personal responsibility and liability for the entire amount. Individuals generally cannot encumber another entity – they are "on the hook" for the whole amount. But this does not mean that another entity cannot pay toward the satisfaction of that commitment. Much depends on the relationship between the maker and the payer. Much also rests on the entity's legal nature (tax classification) rendering a payment.

     

    This protocol includes a sample pledge agreement, or "Statement of Financial Commitment." This version can be used when a donor anticipates third-party payments but assumes full financial responsibility. On the "Optional Sections" page after the sample, suggested language is offered that can be used should a donor not desire to be financially accountable for the entire amount but wish to alert us to likely funding sources. The options also include different payment schedules and recognition forms.

     

    In the event that a donor executes a binding pledge agreement that does not reflect anticipated pledges from third parties, and the institution discovers that third parties are being relied upon to satisfy the commitment, the pledge will immediately be converted to a Non-Binding Letter of Intent as discussed below.


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    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Attachment(s)

    pdf
    2023 Short Pledge Template.pdf   139 KB 1 version
    Original Message


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