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Setting up accounts for Donor Advised Fund names

  • 1.  Setting up accounts for Donor Advised Fund names

    Posted 02-10-2025 03:42 PM

    Hi all,

    When we receive a gift via a Donor Advised Fund, we hard credit the fund and soft credit the recommender. I have been asked if it is appropriate to also set up an account for the fund name i.e. "Bill and Bertha <Last Name> Giving Fund."

    I have read the document in the Best Practices Library that indicates it is not a best practice but provides guidance on how to do it if you choose to do it.

    My question for this group is, are any of you doing it? If yes, have you found the information beneficial and how do you use it?

    Many thanks,

    John Smilde

    Director of Gifts and Records Administration

    Advancement and Alumni Relations

    George Mason University

    4400 University Drive, MSN 1A3

    Fairfax, VA 22030

    703.993.8680

    jsmilde@gmu.edu

     

    This electronic message contains confidential information which is, in whole or in part,

    subject to exclusion from disclosure under the Freedom of Information Act pursuant to

    §2.2-3705.4.7. of the Code of Virginia.

     

     

     



  • 2.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-10-2025 04:08 PM

    John,

    We set all DAFs up as donor records/accounts with auto soft credit to the donor recommender.  We also flag all of them as DAF for the constituency so that we are easily report on the VSE and to internal persons of interest just what our DAF giving levels are.  It has been extremely useful.  I can't imagine how we would do that level of reporting without doing it that way.  I highly recommend it.

    Joel



    ------------------------------
    Joel Clasemann
    Director of Advancement Services
    The College of Saint Scholastica
    jclasema@css.edu
    ------------------------------



  • 3.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-10-2025 04:34 PM
    But Joel, you can accomplish all this without creating a unique account/record for the donor's "pretend" find at the DAF.

    By creating a soft-credit type of 'DAF,' and linking the donor to the DAF originator with that soft credit, you know all you need to know for reporting:

    *You know the soft credit was generated by a DAF

    *You know where the legal gift originated

    *You know the donor who caused the DAF to send the gift

    These named finds at a DAF are not legal entities. They are accounts owned by the DAF. Creating separate records for them runs the risk of your inflating donor record counts, too.

    John

    John H. Taylor
    919.816.5903 (Cell/Text)

    Big Ideas - Small Keyboard





  • 4.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 08:27 AM

    We create entities for the DAF in addition to the Sponsoring Organization and the individual donor/advisor(s). 

    When we recording a gift that came through a DAF, we hard-credit the sponsoring organization and soft-credit the DAF and the Donor Advisors.

     

    This gives us another analytical level as we understand a donor's giving, lets us reflect the DAF name on receipts and communications as desired, and helps us understand where our donors are establishing DAFs, among other purposes.  They're easy enough to include/exclude from donor counts, etc., as desired.

     

    As we implement our new CRM, we're building in a more structured way to reflect the associations between Sponsoring Organizations, DAFs, and donor/advisors, with an eye toward, among other things, fully automating the various soft credits.

     

    My

     

    My US$0.02 worth; the usual disclaimers apply.

     

    Good luck!

    Alan

     

    Alan S. Hejnal

    Data Quality Manager

     

    SNAGHTML5cbfa34

     

    NB: identification of traditional grammatically masculine pronouns removed pursuant to Executive Order 14168.






  • 5.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 08:39 AM

    Thanks, Alan. To make sure we are on the same page jargon-wise. Using the illustration I started with:

    DAF = Fidelity Charitable

    Sponsoring Organization = Bertha and Bill Giving Fund

    Individual Donors = Individual Donors

    Is that correct?

    Many thanks,

    John Smilde

    Director of Gifts and Records Administration

    Advancement and Alumni Relations

    George Mason University

    4400 University Drive, MSN 1A3

    Fairfax, VA 22030

    703.993.8680

    jsmilde@gmu.edu

     

    This electronic message contains confidential information which is, in whole or in part,

    subject to exclusion from disclosure under the Freedom of Information Act pursuant to

    §2.2-3705.4.7. of the Code of Virginia.

     

     

     

     






  • 6.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 09:03 AM

    We're actually using the terminology of https://www.irs.gov/charities-non-profits/charitable-organizations/donor-advised-funds , to wit:

     

    • Sponsoring Organization: the legal entity that offers DAFs, such as Vanguard Charitable Endowment Program, The Community Foundation of Northern Virginia
    • Donor Advised Fund: the separately identified fund or account at the sponsoring organization, such as The Ed Okin Fund or the Caper Family Fund
    • Donor/advisor: the individuals associated with the fund as donors or advisors, such as Ed Okin, Jack Caper and Joan Caper.

     

    (Another reference is https://www.irs.gov/pub/irs-tege/donor_advised_explanation_073108.pdf.)

     

    My US$0.02 worth; the usual disclaimers apply.

     

    Good luck!

    Alan

     

    Alan S. Hejnal

    Data Quality Manager

     

    SNAGHTML5cbfa34

     

    NB: identification of traditional grammatically masculine pronouns removed pursuant to Executive Order 14168.

     






  • 7.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 09:09 AM
    OK, thanks for that clarification and reference Alan.
    John





  • 8.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 09:33 AM
    A quick question for those who are creating individual records for things like the John Taylor Fund (held at Fidelity):

    Since these funds are not legal entities - just accounts held by the sponsoring organization - how do you deal with accurate donor counts for national (VSE) and peer comparisons? These funds should not count as "donors" for these - only the sponsoring organization is the donor and should be counted. So, I am curious about how you get to the right number for your reporting.

    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







  • 9.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 10:23 AM

    We don't participate in the VSE, but it's easy enough to include or exclude entities based on record types.  And the number of DAFs is unlikely to be material in any case!

     

    We put the  hard credit on the account of the legal donor, the sponsoring organization, so that flows as expected.

     

    We create a variety of entity records that aren't legal entities. 

     

    As I recall, if I am an individual with a business that I report on schedule C, and send a gift via a check that references that "business," the VSE wants us to report that in the corporate category even though there is no separate legal entity, so (in prior organizations that completed the VSE), we would create a separate entity.

     

    We have group entities for households, families, extended families, garden clubs and stamp clubs and the like, youth groups/troops of various sorts, groups of employees of some organization, student councils or individual classes at schools, all sorts of groups. 

     

    We have entities for many units of the Smithsonian, for that matter, none of which are separately-incorporated legal entities (though, admittedly, we don't record gifts against those entities).

     

    All in all, no reporting issues.

     

    My US$0.02 worth; the usual disclaimers apply.

     

    Good luck!

    Alan

     

    Alan S. Hejnal

    Data Quality Manager

     

    SNAGHTML5cbfa34

     

    NB: identification of traditional grammatically masculine pronouns removed pursuant to Executive Order 14168.






  • 10.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 10:33 AM
    I would say based on a number of high profile studies, the use of donor advised funds is becoming more and more mainstreamed. Certainly true when you look at the use of donor advised funds as they relate to what you would call a " Major gift donor". Also given that donor participation is still largely shrinking and most institutions' donor pools Are being composed of mid-level donors, DAFs. will continue to be a popular instrument. It may not be reflected in every institution's data, but the trend is unmistakable. 

    Dave Woodley
    Unlock*Share*Connect
    Chief Data Officer
    University of Alaska Foundation







  • 11.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 10:37 AM
    Alan, the way you are entering gifts is the way I agree is correct.

    However, many here have described entering the hard credit on the "made up" records such as The John Taylor Fund. Then, the soft credit John Taylor and - sometimes, but not always - the sponsoring organization.

    So, my question is - especially for those MANY organizations that have limited reporting or technical staff and tend to rely on CRM-provided reporting tools - How do you pull the RIGHT numbers if you are assigning hard credit to a made up account and the true legal donor (the sponsoring organization) is receiving soft credit only?

    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







  • 12.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 10:54 AM
    Please remember that many "older" CRMs do not allow you to create multiple soft credit categories. You are often stuck with what came with the system.

    Thoughts? While I tend to discourage creating these made-up records - could you tell? ;-) - some of my clients still like to use them. But with these older systems, I am having difficulty developing an automated reporting system - other than using a unique appeal or "mail" code on the gift, reflecting that the gift really belongs to Fidelity or Schwab or whomever.

    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







  • 13.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-10-2025 04:37 PM
    Thank you Joel. Can you please clarify because it sounds like you are doing what we are doing. But do you also set up and account for the name the donor advised fund sub account name? In other words, would you have three accounts set up as follows:
    1. Fidelity Charitable
    2. Bill and Bertha Giving Fund (the name of their account with fidelity). 
    3. An account for the actual household i.e 
    Bertha and Bill <last name>

    And then proceed to HC the DAF and SC their personalized fund name at fidelity and the also SC them as actual the actual household or individuals?

    In other words. One HC and two SCs?

    Thanks
    John

    Sent from my iPhone





  • 14.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-10-2025 04:38 PM
    Thank you John. Much appreciated. 
    John
    Sent from my iPhone





  • 15.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-10-2025 05:24 PM

    @John Taylor I agree that we could do it the way you suggest and that it could be increasing our donor counts.  My back of the envelope counting suggests that prior to this current fiscal year we had less that 6 donors give outright and through a DAF in the same year.  That pattern is changing and increasing this year which means I am going to have some fun analysis when we close this year's books to try to understand the change.

    Another interesting data tidbit we are seeing is donors with multiple DAFs (one at Fidelity, Schwab, or Vanguard and one at a community foundation or other NPO).  [We have two donors with 3 DAFs.]  I am still trying to wrap my head around this concept and all of the implications it has for the future.

    @John Smilde We are setting up each DAF as a separate org in our database.  We are not tying the Bill and Bertha Giving Fund @ Fidelity back to Fidelity Charitable.  We are crediting the gift to the Bill and Bertha Giving Fund tying that to the Bill and Bertha household via soft credit and connect the Bill and Bertha household to the DAF as fund contacts.

    It is highly possible we are not observing best practice here.  However, it has made report building easier and has made it easier for our users to understand the data.

    My understanding for why this works best for us is we count Fidelity Charitable as a Corporate Foundation and we count each of the DAFs associated with Fidelity as Donor Advised Funds.  We want to hard credit report on them as separate columns in various reports.  Thus the data aligns with our practice.

    Joel



    ------------------------------
    Joel Clasemann
    Director of Advancement Services
    The College of Saint Scholastica
    jclasema@css.edu
    ------------------------------



  • 16.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 08:00 AM

    Thanks Joel. That gives me a better picture of what you are doing. So, where we HC Fidelity Charitable, you HC an account called Bill and Bertha Fund @ Fidelity and we both SC the Recommender humans.

    Can I ask a follow-up on reporting. How does this manifest itself in reports that you are using or maybe just what examples are of reports you are creating using this approach? What situations do you find reporting on the funds to be more useful than on the SC individuals?

    Many thanks,

    John Smilde

    Director of Gifts and Records Administration

    Advancement and Alumni Relations

    George Mason University

    4400 University Drive, MSN 1A3

    Fairfax, VA 22030

    703.993.8680

    jsmilde@gmu.edu

     

    This electronic message contains confidential information which is, in whole or in part,

    subject to exclusion from disclosure under the Freedom of Information Act pursuant to

    §2.2-3705.4.7. of the Code of Virginia.

     

     

     

     






  • 17.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-10-2025 04:18 PM
    John, I have often been asked this. My first reply is always, Why? What will that do for you that you cannot already do?

    I do know some organizations do this. They say it helps them with reporting. I think you can accomplish the same thing with better reports!

    Of course, doing this also adds more work for your gift entry specialists.

    John

    John H. Taylor
    919.816.5903 (Cell/Text)

    Big Ideas - Small Keyboard





  • 18.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 10:00 AM
    I would say it depends on what you're trying to do.  

    If reporting is the The issue, such as VSE reporting, then of course the giving entity is an organization And you would be required to report the gift as such.  

    However, if the goal is Analysis, such as predictive analytics, then Recording the gift as from an organization and soft credit to an individual, just gets messy very quickly.   Here the very term "soft credit" becomes kind of offensive to my sensibilities. Some like "originating credit" Makes better sense to me.  Most fundraising data systems were not conceived of with this kind of analysis in mind. It's up to data analyst to try and figure this one out.   


    Dave Woodley
    Unlock*Share*Connect
    Chief Data Officer
    University of Alaska Foundation





  • 19.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 10:04 AM
    I am asking about any survey, like the VSE, that requires legal donor counts. How do you auto-generate a report if the actual legal donor (in these cases) has soft credit if any credit at all?

    John

    John H. Taylor
    919.816.5903 (Cell/Text)

    Big Ideas - Small Keyboard





  • 20.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-11-2025 10:08 AM
    Devise a better data recording system that understands sometimes a gift needs to be thought of in more than one mode!  

    If you are doing hard reporting like vse The data system knows to show that as an organization gift

    However if you are feeding data into an AI like Einstein analytics at salesforce or even Akkio, The system knows that organization is just a proxy for someone else. 

    Dave Woodley
    Unlock*Share*Connect
    Chief Data Officer
    University of Alaska Foundation







  • 21.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-13-2025 12:57 PM

    My preferred way to handle this is to have a record for the Sponsoring Organization, the DAF, and the Donor Advisor. When a system will let me, I'll create a parent/child relationship between the Sponsoring Org and each DAF, then I'll hard credit the DAF record, soft credit the advisor, and use the Parent relationship to rollup all giving for the Sponsoring Org. I can then calculate number of donors by excluding DAF records and counting the Parent instead. This can also help in systems that don't allow multiple soft credits.

    I don't think it is necessary to have individual DAF records, but I do like the flexibility it gifts and I've found it easier to ensure proper names in acknowledgements and in recognition. My current system is not set up this way, so I don't have any quick examples of reports available to share.



    ------------------------------
    Keith Padgett
    Connecticut College
    kpadgett@conncoll.edu
    ------------------------------



  • 22.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-21-2025 02:36 PM

    I came across this question and wanted to share what we've implemented and why. Previously, we followed a model where we hard-credited the DAF-SPO (Fidelity and the like) and soft-credited the recommending donor (aka DAF-Advisor) without capturing the specific named DAF-Account. However, our gift officers expressed a need to see the actual named accounts, as simply identifying that a donor had a DAF-potentially at multiple SPOs-was not sufficient for their broader strategy.

    In response, we adjusted our approach to incorporate DAF-Accounts into our data processing. The DAF-SPO still receives hard credit, and the recommending donor continues to receive soft credit, but we now add the DAF-Account as an attribute on the revenue record. This attribute automates the relationship between the DAF-SPO and the account holder, enhancing visibility for our gift officers.

    That said, we do not include the account name in acknowledgment letters sent to recommenders, as our volume is too high, and that level of detail may introduce unnecessary complexity. The primary goal of this change is to equip gift officers with more precise information, allowing them to engage donors more effectively, reference the account by name in conversations, and potentially discuss legacy planning.



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



  • 23.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-21-2025 02:56 PM

    Thank you, Yelena. I really appreciate the insight.

     

    Best,

    John

     






  • 24.  RE: Setting up accounts for Donor Advised Fund names

    Posted 02-21-2025 04:50 PM
    Valerie Nguyen reacted to your message: