Blended Campaign Gifts

Sara Kramer

How do you all handle blended campaign gifts? We have a donor that has committed to giving $X each year and when the pass, their estate will take up the balance of what is left of the $Y commitment. Do you enter a pledge for $Y and set up yearly installments for $X until it ends? Normal campaign guidelines say to only count commitments for 5 years, but can count planned gifts if we have them documented. We want to be able to count the full amount of $Y for our current campaign. Any thoughts on the best way to record a blended gift? Thanks!

Larry Wheeler

I just dealt with a similar situation. My solution was to count the full, or balance, of all pledges and planned gifts which were counted in the previous campaign totals only for that campaign.

I have begun the new campaign by removing Pay-#### gifts types from my reporting/counting. In order to count new pledges, I now count the full pledge, instead of pledge balance, and using date ranges for the new campaign to pickup the correct pledges.

Planned Gifts are a bit of a hassle - I have to run a report to look for gifts linked to planned gifts in the new date range (up to today) and add those gift ID's to a query. That query excludes those gifts from my campaign reporting report in Financial Reports.

Now, there are definitely better ways to handle this depending on your set up. I had to take this route because of mistakes made in the initial setup, incomplete campaigns flowing into the following campaign, and the appeal/package system for gifts was used in other ways.

Good luck with your decision. I'm sure others will be around to provide their thoughts.

Faith Murray

Generally, planned gifts are better left non-posted unless you have documentation or unless they are irrevocable in nature. That is, any portion of the pledge that you know will be fulfilled by bequest should be recorded either as a Planned Gift (using the campaign fund) or else as a pledge that is “not posted” until the gift is realized. (The active part of the pledge during the donor's lifetime would, of course, need to be posted.) To pull campaign revenue, you would simply include Planned Gifts on your reporting, making sure to pull revenue by total pledge rather than pledge payments as Larry has stated. This contingency is important considering that most wills are changed every 5 years without notifying the nonprofit beneficiary; plus, unless a bequest is irrevocable it can be contested or redirected by family, or come in at a lower amount than anticipated.

The distinction I see is in your case when a donor has not set a specific amount to be fulfilled by bequest and may in fact pay off the complete pledge before his/her death; the bequest in that case is only a backup contingency. In such a case, I would post the entire amount as a straight pledge. If the donor passes away, the bequest can be applied to the pledge as a normal pay-cash.

We have (rarely) posted pledges up to ten years before and not had any issues with our auditors. Auditors should not be worried unless your pledge fulfillment rate tends to be low or unless you have inadequate pledge documentation. However, you may have a cash flow consideration if a majority of your pledges extend longer than 5 years, as you would then have to borrow funds for implementing your capital project. This is usually less than ideal, as you would then need to include interest payments into your total fundraising needs, and it would hamper your liquidity for planning future campaigns after the five-year terminus. For this reason, any bequest payments for campaigns ought to be restricted to donors who don't expect to live for decades; or else bequest pledges are limited to non-capital campaign components, such as an endowment component; or else you should at least have an internal policy in place to be able to “borrow” against other internal assets until the pledges are realized, without risking fiscal stability.