FundSvcs Community

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

I have already assessed the impact on the balance sheet and had a conversation with our finance team. They are on board. They don't like having to restate pledges every time we reduce them, creating audit flags. 

The pledge reduction is the pain point I want to solve. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

Hi Jeff,

That's exactly what we're doing. Our non-binding pledges are excluded from most (but not all) counting and from the feed to finance. We've found it to be a good solution, especially in the reduction of the number of pledges that have to be reduced. Additionally, knowing that there is a specific way to track these may help the development officers turn in the correct information instead of us being surprised by it every time.

Lianna

I have already assessed the impact on the balance sheet and had a conversation with our finance team. They are on board. They don't like having to restate pledges every time we reduce them, creating audit flags. 

The pledge reduction is the pain point I want to solve. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

Thanks, Lianna.  For pledges recorded where it was not known that a DAF would be used for payment, are you still using the existing practice of reducing the pledge? 

Hi Jeff,

That's exactly what we're doing. Our non-binding pledges are excluded from most (but not all) counting and from the feed to finance. We've found it to be a good solution, especially in the reduction of the number of pledges that have to be reduced. Additionally, knowing that there is a specific way to track these may help the development officers turn in the correct information instead of us being surprised by it every time.

Lianna

I have already assessed the impact on the balance sheet and had a conversation with our finance team. They are on board. They don't like having to restate pledges every time we reduce them, creating audit flags. 

The pledge reduction is the pain point I want to solve. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

Isaac, I appreciate your response and I would love to take your advice as it would make life much easier.  However, I struggle with following the Notice for a couple of reasons:

1) It was a request for comments and not a change in IRS policy. They are approaches the IRS "are considering."  Maybe I missed something, but nothing was ever solidified by the IRS following the collection of comments. 

2) Even if we were to follow the Notice, even today (despite the DAF organizations' support of the considered changes), they all provide language in their grants stating it cannot fulfill a legally binding/enforceable pledge.  So you're suggesting we accept the grants but apply them against the terms provided with the grant.

Curious how you reconcile these. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

Isaac, I appreciate your response and I would love to take your advice as it would make life much easier.  However, I struggle with following the Notice for a couple of reasons:

1) It was a request for comments and not a change in IRS policy. They are approaches the IRS "are considering."  Maybe I missed something, but nothing was ever solidified by the IRS following the collection of comments. 

2) Even if we were to follow the Notice, even today (despite the DAF organizations' support of the considered changes), they all provide language in their grants stating it cannot fulfill a legally binding/enforceable pledge.  So you're suggesting we accept the grants but apply them against the terms provided with the grant.

Curious how you reconcile these. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process. 

As we are in a CRM migration project, I am thinking through several of our pain points.  Of course processing gifts from DAFs where the intention is to pay on a pledge.

I've reviewed the 2017 IRS notice and the terms of the "big three" (Fidelity, Schwab, and Vangard) DAFs. All three still have language stating that a DAF grant cannot fulfill an "enforceable" "legal obligation" or "legally binding" pledge. SO, the 2017 Notice really doesn't change anything.

I am exploring creating a new pledge type for our system "non-binding pledge" or equivalent to record pledges where the donor indicates that they intend to use a DAF to fulfill. The pledge/intent form would be altered to indicate non-binding. And, since they are non-binding we would not record these pledges in financials/balance sheet. We would just record the received funds as they come in.

The hope is this eliminates the need to do the reduce pledge process when a DAF payment comes in and all the reporting that comes with that to ensure a DAF today isn't counted becaus a pledge recorded two years ago was.

I know this doesn't solve the issue of a DAF grant coming where the donor doesn't tell us ahead of time they are paying with a DAF. That is unavoidable.  

I would appreciate any feedback on this proposed process.