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  • 1.  Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 26 days ago

    When we receive a gift through a donor advised fund or other third party agency, we hard credit the agency, such as Fidelity or CyberGrants, and soft credit our constituent who has recommended the gift.  It has been suggested that we might make our database more donor-centric if we hard credit our constituent rather than the third party agency.  We are told this will improve data accuracy.  Is this a common practice?



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    Sue Mathes
    Dominican University
    smathes@dom.edu
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  • 2.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 26 days ago

    Hi,

     

    What you are doing now is correct, however I understand the argument to hard credit the donor who asked the funds to be directed to your organization. We create a new DAF record and give recognition credit to the DAF and the donor. For example – The Morton Fund at Fidelity would be set-up as the constituent and receive the hard credit. Fidelity and I would have a relationship with the above record and receive recognition credit for the gift. This allows our fundraiser to easily see  the revenue from the donor's DAF.

     

    Karry Morton | Director | Gift Services

    Children's Hospital Colorado Foundation

    Anschutz Medical Campus | 13123 E. 16th Ave., B045 | Aurora, CO 80045

    Southern Colorado | 111 S. Tejon Street, Suite 309 | Colorado Springs, CO 80903

    Office: 720-777-1742 | Cell: 720-323-3305

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    SupportChildrensColorado.org | Facebook | Instagram | LinkedIn

    If you would like to opt-out of communications from Children's Colorado Foundation, please email info@childrenscoloradofoundation.org or call 720-777-1700.
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  • 3.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 26 days ago
    We switched to hard crediting the donor and soft crediting the DAF a few years ago and it has made reporting much easier. It was difficult for us to find the actual number of donors because we use soft credits liberally (spouse, multiple family members, etc.). By hard crediting the record who initiated the gift, we can pull reports on only hard credits to get accurate donor totals.

    We do add a gift attribute for "Legal Donor" so we can report correctly on annual surveys and process acknowledgements accurately.

    Peter Johnston | Director of Advancement Services
    P O L Y T E C H N I C   S C H O O L




    Original Message


  • 4.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 26 days ago
    Peter, I have helped many clients resolve your counting problem by creating a unique soft-credit type for DAF gifts. That also helps finance in understanding when a pledge write-off is not really a write-off but a reduction thanks to a DAF gift.

    John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard





    Original Message


  • 5.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 25 days ago

    John, I'm curious to hear more about this solution. Can you elaborate?



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    Leah Richards
    St. John Fisher University
    lrichards@sjf.edu
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    Original Message


  • 6.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 25 days ago
    Many CRMs allow you to create different soft-credit types. For those that do not, the CRM usually has a gift flag or code you can assign - much like a "mail code" or an "appeal code." You will want to work with your technology team to determine which will work best for you.

    You essentially want to create an indicator that is entered on the DAF gift and that flows through to the soft credit. You can then use that indicator to run reports showing who and how many individuals are associated with a DAF gift.

    I also find in my work that many organizations are reporting to finance an excessively high pledge "write-off" rate. Finance has to set up a reserve requirement for these write-offs. However, when a pledge is written down thanks to a DAF gift (which cannot be applied as a pledge payment), they do not flag that pledge as being written down thanks to a DAF gift. In fact, that pledge HAS been satisfied - just not linked to a gift!

    So, you can again use the above code, coupled with a pledge write-off that has a unique write-off "reason code," to indicate the existence of an associated DAF gift. That tells finance that these were not "true" write-offs, and they can adjust their reserve requirement accordingly.

    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


  • 7.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 25 days ago

    Thank you, John. I am considering our handling of DAF payments as we migrate to a new system so it is the perfect time to explore this type of solution. I'll keep mulling how we might build this out but this is helpful additional context. Thank you!



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    Leah Richards
    St. John Fisher University
    lrichards@sjf.edu
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    Original Message


  • 8.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 26 days ago
    I'd say it's a method that has gained in popularity over the years. Bill Connors championed this approach in his consulting and his book, Fundraising With The Raiser's Edge, and it's certainly more common outside of higher education. There are tradeoffs, but generally, reporting is easier this way. You will have to rebuild your reporting though, and certain reports, eg CASE reporting, will be more challenging.

    The issue is really a data model problem. We divide crediting into hard and soft, but the reality is that there are several types of credit we want to track - tax credit, gift credit (who really gave the gift, irrespective of DAF, etc.), recognition credit, and a few different types of "soft" credit, too. Newer systems are designed to handle this better.




    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:





    Original Message


  • 9.  RE: Soft credits for gifts from Donor Advised Funds/Third Parties

    Posted 26 days ago
    That is not how CASE wants you to report. It's always based on the legal donor. Hard crediting the individual distorts database accuracy and forces you to rewrite reporting and also create workarounds to suppress receipts.

    Sure, you can do it but you will have to reinvent your reporting process.

    John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard



    Original Message


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