FundSvcs Community

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Isaac, I see this as a matter of agreeing to the conditions under which the DAF sponsoring organization granted us the funds. They are providing funds under certain conditions, one of which is that we won't use their grant to fulfill an existing pledge. We're free to decline the funds, but by accepting them, we're telling them that we will honor their request. Same as any other donor funds we accept.

If accounting wants to consider a pledge fulfilled because of funds received by a sponsoring organization, then I think a conversation needs to be had about writing off the balance of the pledge. This accomplishes the same end result, more or less. If, as you say, there is no accounting difference between writing down the pledge due to an unrelated payment and applying that payment to a pledge, then accounting shouldn't care whether we decide to write down the pledge in these circumstances to align most closely to the legal donor's request for their funds.

I respect sponsoring org's desire to play it safe in these circumstances since the IRS stance is only from this 2017 notice.

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Isaac, I see this as a matter of agreeing to the conditions under which the DAF sponsoring organization granted us the funds. They are providing funds under certain conditions, one of which is that we won't use their grant to fulfill an existing pledge. We're free to decline the funds, but by accepting them, we're telling them that we will honor their request. Same as any other donor funds we accept.

If accounting wants to consider a pledge fulfilled because of funds received by a sponsoring organization, then I think a conversation needs to be had about writing off the balance of the pledge. This accomplishes the same end result, more or less. If, as you say, there is no accounting difference between writing down the pledge due to an unrelated payment and applying that payment to a pledge, then accounting shouldn't care whether we decide to write down the pledge in these circumstances to align most closely to the legal donor's request for their funds.

I respect sponsoring org's desire to play it safe in these circumstances since the IRS stance is only from this 2017 notice.

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Isaac, I've seen Fidelity deny a request for a DAF payment when the advisor mentioned in their grant recommendation that it was paying a pledge.  I've also over the past year or so had to field phone calls from Fidelity and fill out questionnaires to verify that the grant is not paying a pledge, or being used in other impermissible ways, like going directly to a student.

Michael

Isaac, I see this as a matter of agreeing to the conditions under which the DAF sponsoring organization granted us the funds. They are providing funds under certain conditions, one of which is that we won't use their grant to fulfill an existing pledge. We're free to decline the funds, but by accepting them, we're telling them that we will honor their request. Same as any other donor funds we accept.

If accounting wants to consider a pledge fulfilled because of funds received by a sponsoring organization, then I think a conversation needs to be had about writing off the balance of the pledge. This accomplishes the same end result, more or less. If, as you say, there is no accounting difference between writing down the pledge due to an unrelated payment and applying that payment to a pledge, then accounting shouldn't care whether we decide to write down the pledge in these circumstances to align most closely to the legal donor's request for their funds.

I respect sponsoring org's desire to play it safe in these circumstances since the IRS stance is only from this 2017 notice.

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

Original Message:
Sent: 2/24/2025 3:05:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 12:14:00 PM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:01:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 1:57:00 PM
From: John Taylor
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 11:12:00 AM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:47:00 AM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 4:09:00 PM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 3:54:00 PM
From: Yelena Natanson
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

------------------------------
Yelena Natanson
Memorial Sloan Kettering Cancer Center
natansoy@mskcc.org

Original Message:
Sent: 02-11-2025 10:07 AM
From: Stephen Lambert
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

------------------------------
Stephen Lambert
Susquehanna University
lamberts@SUSQU.EDU
------------------------------

Just came across this thread as this came up again (and again, and again). Isaac, I 100% agree with your reading on this. We've been doing the whole take the DAF funds and write down the pledge by like amount dance, instead of just applying the payment to the pledge. In both cases, you are treating the DAF funds as a pledge payment, the write-off way is just more convoluted and gives you more plausible deniability, but anyone can see that you are receiving DAF funds, soft crediting a donor with a pledge, and then reducing said pledge by the same amount. Thinking I should just save myself the headache and apply it directly to the pledge, because at the end of the day it amounts to the same thing.

------------------------------
Tioga Anderson
East Stroudsburg University Foundation
tanderson@esufoundation.org
------------------------------

Original Message:
Sent: 02-24-2025 05:03 PM
From: Isaac Shalev
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 3:05:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 12:14:00 PM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:01:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 1:57:00 PM
From: John Taylor
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 11:12:00 AM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:47:00 AM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 4:09:00 PM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 3:54:00 PM
From: Yelena Natanson
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

------------------------------
Yelena Natanson
Memorial Sloan Kettering Cancer Center
natansoy@mskcc.org

Original Message:
Sent: 02-11-2025 10:07 AM
From: Stephen Lambert
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

------------------------------
Stephen Lambert
Susquehanna University
lamberts@SUSQU.EDU
------------------------------

Just came across this thread as this came up again (and again, and again). Isaac, I 100% agree with your reading on this. We've been doing the whole take the DAF funds and write down the pledge by like amount dance, instead of just applying the payment to the pledge. In both cases, you are treating the DAF funds as a pledge payment, the write-off way is just more convoluted and gives you more plausible deniability, but anyone can see that you are receiving DAF funds, soft crediting a donor with a pledge, and then reducing said pledge by the same amount. Thinking I should just save myself the headache and apply it directly to the pledge, because at the end of the day it amounts to the same thing.

------------------------------
Tioga Anderson
East Stroudsburg University Foundation
tanderson@esufoundation.org
------------------------------

Original Message:
Sent: 02-24-2025 05:03 PM
From: Isaac Shalev
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 3:05:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 12:14:00 PM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:01:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 1:57:00 PM
From: John Taylor
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 11:12:00 AM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:47:00 AM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 4:09:00 PM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 3:54:00 PM
From: Yelena Natanson
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

------------------------------
Yelena Natanson
Memorial Sloan Kettering Cancer Center
natansoy@mskcc.org

Original Message:
Sent: 02-11-2025 10:07 AM
From: Stephen Lambert
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

------------------------------
Stephen Lambert
Susquehanna University
lamberts@SUSQU.EDU
------------------------------

Just came across this thread as this came up again (and again, and again). Isaac, I 100% agree with your reading on this. We've been doing the whole take the DAF funds and write down the pledge by like amount dance, instead of just applying the payment to the pledge. In both cases, you are treating the DAF funds as a pledge payment, the write-off way is just more convoluted and gives you more plausible deniability, but anyone can see that you are receiving DAF funds, soft crediting a donor with a pledge, and then reducing said pledge by the same amount. Thinking I should just save myself the headache and apply it directly to the pledge, because at the end of the day it amounts to the same thing.

------------------------------
Tioga Anderson
East Stroudsburg University Foundation
tanderson@esufoundation.org
------------------------------

Original Message:
Sent: 02-24-2025 05:03 PM
From: Isaac Shalev
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 3:05:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 12:14:00 PM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:01:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 1:57:00 PM
From: John Taylor
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 11:12:00 AM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:47:00 AM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 4:09:00 PM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 3:54:00 PM
From: Yelena Natanson
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

------------------------------
Yelena Natanson
Memorial Sloan Kettering Cancer Center
natansoy@mskcc.org

Original Message:
Sent: 02-11-2025 10:07 AM
From: Stephen Lambert
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."

Reach out offline if you are more comfortable doing so: lamberts@susqu.edu

Thank you!

------------------------------
Stephen Lambert
Susquehanna University
lamberts@SUSQU.EDU
------------------------------

Just came across this thread as this came up again (and again, and again). Isaac, I 100% agree with your reading on this. We've been doing the whole take the DAF funds and write down the pledge by like amount dance, instead of just applying the payment to the pledge. In both cases, you are treating the DAF funds as a pledge payment, the write-off way is just more convoluted and gives you more plausible deniability, but anyone can see that you are receiving DAF funds, soft crediting a donor with a pledge, and then reducing said pledge by the same amount. Thinking I should just save myself the headache and apply it directly to the pledge, because at the end of the day it amounts to the same thing.

------------------------------
Tioga Anderson
East Stroudsburg University Foundation
tanderson@esufoundation.org

Original Message:
Sent: 02-24-2025 05:03 PM
From: Isaac Shalev
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 3:05:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/24/2025 12:14:00 PM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:01:00 PM
From: John Smilde
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 1:57:00 PM
From: John Taylor
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 11:12:00 AM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/23/2025 8:47:00 AM
From: Isaac Shalev
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 4:09:00 PM
From: Jeff Baynham
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Original Message:
Sent: 2/21/2025 3:54:00 PM
From: Yelena Natanson
Subject: RE: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Stephen, we take a blended approach, though its applicability may depend on your system.

We manage two types of commitments: Pledges and Gift Intentions. 

For a true enforceable pledge, we do not accept DAF payments. These pledges are recorded and fed to Finance.  If a donor pays with DAF, we convert the Pledge into a Gift Intention - for finance, that looks like a write-off. 

When we know the donor intends to fulfill their commitment using a DAF, they sign a Letter of Intent (LOI) instead of a pledge agreement. They vary slightly in the verbiage in the agreements.   Gift Intentions are not reported to Finance. Finance only records the actual payments, treating them as they would regular gifts.

This approach allows us to internally track fundraising commitments and projected revenue while keeping to the more strict reading of the IRS and DAF rules. 

------------------------------
Yelena Natanson
Memorial Sloan Kettering Cancer Center
natansoy@mskcc.org

Original Message:
Sent: 02-11-2025 10:07 AM
From: Stephen Lambert
Subject: Liberal DAF-Pledge Policy? Anyone relaxing your stance?

Are you allowing DAF funds to fulfill private pledges, binding or otherwise, without a special pledge agreement with permissive DAF language? If so, please tell me. My VP and AVP colleagues want to know to what extent there is movement in this more liberal direction. 

I ask because I recently spent time studying IRS Notice 2017-73, IRS Publication 526, IRS Section 170f18, and various executive summaries of these saying we can be more relaxed and apply DAF funds to pledges without fear of repercussions and without specially worded pledge agreements. We, of course, would continue with best practice on crediting, hard to DAF and soft to Donor/Advisor. 

We are considering the following words with great interest:

"IRS Notice 2017-73 describes regulations the IRS and Treasury are considering that would establish the following rules:

1.        Fulfillment of Donor Pledges: Grants from a DAF that fulfill the personal pledge of a donor, donor advisor or certain related persons (collectively, a "Donor/Advisor") – even a legally binding pledge – would not be treated as a "more than incidental benefit" under section 4967 of the Code that gives rise to excise taxes so long as the following requirements are satisfied:

a.       The DAF sponsoring organization makes no reference to the existence of any charitable pledge when making the distribution from the donor's DAF (references to the name of the person who advised on the distribution are permitted);

b.       No Donor/Advisor receives, directly or indirectly, any other benefit that is more than incidental on account of the DAF distribution (such as those set forth in future guidance); and

c.       The Donor/Advisor does not claim a charitable contribution deduction for the DAF distribution, even if the charity receiving the distribution mistakenly sends the Donor/Advisor a tax acknowledgement.

The Notice provides that donors and DAF sponsoring organizations may rely on this guidance relating to fulfillment of pledges immediately."