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  • 1.  Foundation Pledges

    Posted 04-21-2025 01:00 PM

    Hi all

     

    My boss has asked me to investigate whether it's permissible to enter pledges made from foundations and apply payments as pledge installments. This would be situations where we applied for a grant from a foundation and were awarded funds that would be paid in the future.

     

    I know that we can't apply payments from a DAF to an individual pledge, but I have never heard that we can't enter a pledge from a foundation that the foundation will then fulfill. I found some information online, but I told my boss that I'd send out the question to the group as well.

     

    Thanks in advance,

    Ashley   

     

    Ashley Patton (she/her)
    Director of Advancement Services
    Vermont Law and Graduate School
    164 Chelsea Street, PO Box 26, South Royalton, VT 05068
    T: 802-831-1230
    vermontlaw.edu

    A green number with a building in the middle AI-generated content may be incorrect. Vermont Law and Graduate School

     



  • 2.  RE: Foundation Pledges

    Posted 04-21-2025 01:11 PM
    You can certainly record a bona fide pledge from a foundation and apply payments as they are received.

    However, please be aware that since the mid-1990s, many foundations have stopped making enforceable multi-year pledges. This was due to a change in accounting policies. As such, you will often find a reference to a multi-year grant, but with a caveat that the foundation reserves the right to renew - or not - the grant annually. With that sort of language, you cannot book a multi-year commitment - only one year at a time.

    You could record the "intent," but those intents cannot be passed to the GL and would need to be counted "below the line" in fundraising reports.

    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






  • 3.  RE: Foundation Pledges

    Posted 04-22-2025 12:32 PM

    Our practice is to have the pledge signed between our office and the foundation if the foundation will be making the payments. Per IRS, a foundation cannot (often) pay a personal pledge obligation (see: self-dealing) if the person is a "disqualified person" (someone with a significant relationship to the foundation, like a board member or family member). If a foundation payment comes in for a pledge booked/signed to the person, we elect to write down the pledge and book the gift separately from the foundation. We do not allow the option for the foundation to make these contingent/renewable optional so that we can book them on our GL. 



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    Jayme Fancher
    San Diego State University
    jfancher@sdsu.eduJayme Fancher
    San Diego State University
    jfancher@sdsu.edu
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