Multi-Year Pledges

Heather Loebe

Hello all!

We have a new Adopt-an Acre program where donors are encouraged to pledge $5,000 for 3 years to total $15,000 (per acre). So they pledge to "Adopt an Acre" for $15,000 and pay over 3 years. We've had a pledge come in and I recorded it in whole when it was pledged. We consider it both time and purpose restricted.


One, was that the right way to go about it?

Two, we have dated Campaigns and Appeals. If I do keep it as the $15,000 pledge, do I update the Campaign and Appeal each year as the payments come in?


We are about to embark on a comprehensive campaign and I am already getting related gifts that I am not sure how to record in this respect either.


Any help is appreciated! Does anyone have a go-to guide or SOP on this? I have such a hard time with multi-year pledges (if that is even the correct term).


Thank you!

Heather

Faith Murray

Heather Loebe‍, I think the answer will depend on your record-keeping philosophy. It is different at each org. At our org, we value being able to see how much revenue was generated by a specific communication outreach -- the appeal. So, if a donor holds on to a 2020 appeal letter and sends in a gift in 2021, we will still post it to the 2020 appeal record, because that tells us how effective the communication, design, and messaging were for that particular mailing. (Funds, of course, being different as they are based on your annual revenue designations rather than reflecting a communication outreach like appeals do.) This works for us because we run our annual revenue reports based on gift date, rather than on fund. An org that pulls revenue reports based on Appeal might not work as well that way because they might miss a gift posted to a 2020 appeal.


Likewise, your needs will be different depending on whether you report pledges in your revenue totals (new money) or pledge payments (cash flow). If you report on pledges and cash, then the payments should be recorded to whatever fund/appeal the original pledge is. If you report on pledge payments, then you might need to update the payments according to the new fiscal year fund/appeal.


So, it depends big time on your org philosophy and reporting needs.

Heather MacKenzie

Ditto what Faith Murray‍ said. As to whether you recorded it properly... If you put it in as the whole $15K, and scheduled the installments as being due as one for each of the 3 years, then it sounds like you did correctly enter it. Don't quote me, since I'm not looking at it with you, but I'd say a strong probably. :- )