One of the reporting issues that Amy points toward, which perhaps is worth a specific call-out, is that the IRS 990 Schedule of Major Contributors requires that the non-profit reports all donors at a certain giving level, subject to some specific rules for aggregating that information.
In the DAF context, the legal donor is the sponsoring organization, not the individual DAF and certainly not the originating advisor. Collecting all the gifts where, say, the Fidelity Charitable Gift Fund is the donor requires special attention if, for example, the hard credit is scattered across different entities for all the DAFs at Fidelity. Can it be done? Sure. But it's not a s straightforward as just looking at each entity and assessing its giving if you have the hard credit on the DAF and not the sponsoring organization.
How this is most helpfully implemented in an advancement system depends quite a bit on the system and its capabilities and flexibility. My preferred model, other thing being equal, is to hard-credit the sponsoring organization and soft-credit both the DAF and the individual advising persons. That provides the level of granularity to look at the activity through a DAF as well as the activity associated with an individual, but leaves the hard credit on the actual legal donor like it is in pretty much every other case (at least, in my preferred approach!).
My US$0.02 worth; the usual disclaimers apply.
Good luck!
Alan
Alan S. Hejnal (he/him)
Data Quality Manager
Original Message:
Sent: 6/27/2024 1:28:00 PM
From: Amy Phillips
Subject: RE: Soft Crediting Donor Advised Funds
Good afternoon, Colleagues!
There is so much swirling around this but, IMHO, a significant part comes down to your coding and how you make that work in terms of appropriately receipting (if necessary) the actual donor. No matter what, when it comes to DAF disbursements, the reality is that the legal donor is the fund management entity. Period. And that is how gifts should be recorded [ie, individuals should NOT be receiving hard credit for DAF disbursements]. Yes, we get disbursements based on individual donor recommendations but that doesn't mean that s/he should be getting "hard credit" for the contribution.
Soft credit can be applied to any constituent your organization believes (and codes) might need to get that credit. Spouse credit is the most standard option. IMHO, that makes complete sense and I would only stretch to other family members if there was, 1) some reason to translate multiple family members as being contributors to the DAF in question and, 2) a desire on the part of the family to share soft credit to all familial contributors.
What internal/external reports are your focus? Where are there coding nuances that can help you achieve your metrics? Does soft credit from DAF disbursements influence how you report engagement stats?
I have experienced an environment in which there was hard credit applied to a named DAF entity with soft credit to the real DAF management entity and then the individual donor(s) who established the fund. I'm not saying that can't work, but however you approach all of this "crediting" I only suggest you consider the long-term impact and not just immediate reporting requests.
With best regards,
Amy
Original Message:
Sent: 6/27/2024 11:34:00 AM
From: Mary Ann Coyle
Subject: RE: Soft Crediting Donor Advised Funds
I find it more straightforward to hard credit the DAF by fund name with soft credit only to the recommender(s) named in the source document. We have a specific DAF constituency code, but coding them as Individual also works for constituency reporting. Our Raisers Edge deployment consultant set up our batch and acknowledgement templates to facilitate thank you letters to the recommender. I anticipate more requests to see a fuller context of influence, (e.g., spouses or children who are not listed as recommenders and therefore not soft credited) and will be looking at Power tools for solutions that present linked records as households or return the combined giving history of linked records.
------------------------------
Mary Ann Coyle
Childrens' Hospital Foundation of Richmond
macoyle@chfrichmond.org
------------------------------
Original Message:
Sent: 06-25-2024 12:09 PM
From: Peter Johnston
Subject: Soft Crediting Donor Advised Funds
Hi all,
We are a Raiser's Edge shop and soft credit liberally in our K-12 donor base. We currently go with the conventional wisdom and hard credit the donor advised fund (or family foundation) and soft credit multiple records (head of household and also the spouse and sometimes children and sometimes multiple heads of households). This has led to trouble finding actual donor counts, participation rates, donor constituency reports...etc. We are pondering the big change to reverse the DAF hard credit to the main donor (i.e. the alumni, the HOH parent, etc.) and soft crediting the DAF (or Family Foundation) and others that need recognition. In addition to this, we will add a gift attribute that lists the "legal donor" so we can pull reports to include legal donor counts in surveys and anywhere else needed.
Does anyone else soft credit their DAF gifts this way? We want to go into this with eyes wide open and hoping for collective wisdom from the community on any pitfalls you foresee. Or if you do this and have great success!
Thank you!
Peter Johnston
Director of Advancement Services
Polytechnic School
pjohnston@polytechnic.org
------------------------------
Peter Johnston
Polytechnic School
pjohnston@polytechnic.org
------------------------------