We've received a Gift Commitment Form, which we use for gifts and will use it as documentation to enter a pledge from a donor.
We recently received one where the donor wrote "Approximately $100,000". How would you handle? The payment is coming from their retirement account at the end of the year. Personally, I don't like it and rather not enter it unless we have a concrete number.
Thoughts?
Thanks
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Original Message:
Sent: 10/25/2024 3:55:00 PM
From: John Taylor
Subject: RE: Donor Advised Funds and Pledges
Ann, legally, there are two schools of thought - plus a third possible consideration.
The most common approach is to record the DAF gift as an outright gift on the DAF record and issue soft credit to the individual. Simultaneously, you manually reduce the pledge by a similar amount-never linking the two transactions.
Of course, following this protocol requires communication with the donor. In fact, if the donor intended all along to pay through a DAF a binding pledge could never have been recorded. Please see the attached.
The second approach urged by many University Counsel is to delete the original pledge, record the DAF gift as outlined above, and require the donor to execute a new pledge agreement for only the amount they will personally commit to paying.
The third consideration-never tested in the courts-is to treat your pledges as nonbinding. These cannot be booked on the GL and should be reported separately from bonafide pledges. In theory, as nonbinding, you might be able to link a DAF gift to the pledge. See page 4 of the attached paper. The current edition of the CASE Global Standards now references these nonbinding pledges on page 58.
John
John H. Taylor, PrincipalJohn H. Taylor Consulting, LLC
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Original Message:
Sent: 10/25/2024 3:41:00 PM
From: Ann Carman
Subject: Donor Advised Funds and Pledges
We are an Ellucian Advance school and are wondering how others handle when someone pays on their pledge through a donor advised fund? Most donor advised funds letters say it may not be used on a pledge. How do you handle this in the database?
Thank you
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Ann Carman
Hartwick College
gifts@hartwick.edu
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