Tracking Statements of Intention - With Hurdles!

Rachel Kauer

Hi all,

Hoping to get a higher level analysis from other RE users in the BB Community on our current quandary with tracking Statements of Intention. My director had sought some general feedback from the RE Facebook group which I reviewed based on our current known hurdles. After reviewing the Facebook RE thread, I have tried to narrow down the positives and negatives of some suggestions based on our current audit report and reconciliation progress. I am hoping some of you may have ideas we haven't yet tapped or have insight into the ideas below that I may have overlooked. I have conclusions at the bottom, but my director wants to find another way. Based on our hurdles what would you do? Any suggestions are welcome!

Our Current Hurdles:

1. Monthly Pledge Reconciliation Reports & End of FY Auditor Pledge Reports:

We currently use canned financial reports based within Raiser's Edge for both monthly reconciliations and to give to the auditors each summer. These canned financial reports are filtered by Pay type = Pledge.

Therefore we cannot use Pledge to track anything other than real pledge agreements, because they will be captured on these reconciliation and auditor reports. This would be bad considering most of our Statements of Intention are being paid by Donor Advised Fund Accounts.

2. Batch Reconciliation:

Our business office does not want any commitments other than real pledge agreements to pull over to Financial Edge. Only rec payments on that kind of commitment would be allowed to be pulled to FE.

Certain pay types will pull over to FE, regardless of subtype. There are only two pay types at present that we do not have set up with FE account codes programmed: Stock and Other.

POSSIBLE SOLUTIONS:

Based on the RE Facebook group thread, there are about 5 types of proposed solutions, however none of them are perfect. Below is my analysis of each based on known hurdles and our needs.

1. "Do Not Post"

Facebook RE User Suggestion:

"Could you just mark the multi-year pledges as "do not post", so it appears in your reporting as pledged revenue but doesn't get fed to FE?"

Positives: This will pass hurdle 2, it will not post to FE.

Negatives: This will not pass hurdle 1, it is still a pay-type "Pledge" and will show up on reconciliation and auditor reports.

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2. "Use Gift Subtype"

Facebook RE User Suggestion:

"An organization I worked with used Gift Subtypes. That worked well because you could choose a specific combination of Gift Type and Subtype to map to the GL (or not) and Post (or not)."

Positives: This will pass hurdle 2 if we don't post.

Negatives: Ultimately, this will not pass hurdle 1, it is still a pay-type "Pledge", regardless of "Gift Subtype" and will show up on reconciliation and auditor reports. These reports cannot be filtered by "Gift Subtype."

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3. "Use Recurring Gift"

Facebook RE User Suggestion:

"We use a recurring gift so we know when to anticipate the cash without counting it in Advancement or Finance until it's received."

Positives: Unsure, we aren't currently set up to use this, so I don't know how it would impact FE or reporting. An educated guess would leave me to thinking it will not affect reporting because it is a different pay type, however, it may pull to FE.

Negatives: This gift type is not set up for us and cannot be used. Requires BB Merchant.

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4. Gift Type "Other"

User Suggestion:

"I use the gift type "Other" and mark them as do not post. I use this for anything from a staff member telling or emailing me that someone is going to give whatever, MG that are contingent on something specific, or even something from a donor that's not specific enough to be a pledge (I'm going to give about what I did last time before the end of the year). I do this so I can track what was said and invoice the donor when they need to be. It also helps because I can either remove or include that gift type when running reports. And because they aren't posted, I just delete the "Other" gift record when the donation actually comes in."

Positives: Gift Type "other" will pass hurdles 1 and 2, it will not show up on pledge reports or post to FE.

Negatives: Tracking, there is no way to apply a schedule or a burn down to the "Other" Gift Type. You can only book (apply/link) payments against pledges, MG pledges, and Proposals. Deleting - I do not know enough about how deleting records impacts RE to know if there are consequences to doing what this user is doing.

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5. "Use Proposals/Opportunities"

User Suggestion:

"We use Proposals/Opportunities with anticipated gift amount and date and an assigned action to follow up/remind donor of their stated intention prior to the anticipated date."

Positives: Using "Proposals/Opportunities" will pass hurdles 1 and 2, it will not show up on pledge reports or post to FE. This is trackable! Any rec gifts can be booked/applied to the proposal to show a burn-down

Negatives: This would show with other proposals on proposal canned reports unless filtered out. These reports are NOT used by Finance for reconciliation or for audits reports but may be used by Advancement with an upcoming capital campaign.

CONCLUSIONS:

1. Options 1 and 2 are not viable for us.
2. Option 3 may have potential, however, the business office has already clarified they are not interested in setting up a BB Merchant account at this time.
3. Option 4, the Business Office may be agreeable to this option, "using Gift Type: Other, a new Gift Subtype: Statement of Intention, Pay method: Other." However, we will NOT be able to book payments against the commitment because that is not a RE function of the "Other" pay type.
4. Option 5, the Business Office may be agreeable to this because it does not affect any FE transactions or the canned pledge reports we use for reconciliation or auditing. This method also allows us to book payments against the commitment. After reviewing the alternatives, this would still be my most recommended option. HOWEVER, based on recommendation from our capital campaign consultant we should only be using proposals to forecast asks for the capital campaign. So my director is extremely reluctant to use this option. However the workaround for running a report for just proposal “capital campaign asks,” or just proposals which are “statements of intention” would be filtering the "Purpose" on the canned proposals report. Either including or excluding the proposal type "Statement of Intention."

Any thought on the above are very welcome, I am most convinced based on our hurdles and needs option 5 is they way to go, but as my director is so reluctant to use that method based on the capital campaign consultant's suggestion to restrict how we use proposals, I would certainly appreciate any further insights from other users into my own analysis. I am most curious on feedback for option 3, because I have no practical experience of working knowledge of it, but if it does need a BB merchant account to utilize, it's not an option. Based on our hurdles, what would you do?

Christine Robertson

@Rachel Kauer Are your canned reports linked to queries (on the first tab or on the Filters tab)? If not, you could remove gifts based on the Subtype field via a query linked to your canned report.

Rachel Kauer

@Christine Robertson
Oh, that's a great idea! Our current canned reports are not linked to queries. They are just the start of the fiscal year to date on “all records.” But I could make a dynamic query based on those dates and filter out the subtype. Thanks!

Rachel Kauer

@Christine Robertson
One thing I just thought of - if I filtered out that subtype on the pledge reports using a query, wouldn't that mean the associated pay-cash gifts wouldn't show up on any reports either?? Would we be missing realized money?

Dariel Dixon

@Rachel Kauer Is your business office considering these Statement of Intention as assets? I wouldn't see why you would enter these in RE at all. Until the gift shows up, unless there is a written documented request (which is more akin to pledges) it's just theoretical.

What does the Finance office need that has to be entered in RE/FE? I'm definitely of the mindset that all financials should not be entered in RE at all times.

Rachel Kauer

@Dariel Dixon
It's actually the Advancement Director who wants the statements of intention tracked in RE. The business office doesn't have a motivation to track them. The reason the Advancement Director wants to track them is that we are headed into a Capital Campaign and is anticipating drafting a bunch of them. So they want to be able to track them in RE as part of the Capital Campaign and to generate payment reminders. We have a lot of donors who want to use Donor Advised Fund Accounts for this which is the primary reason they aren't actually pledges. That said our statements of intent are written, specific, and signed documents, they simply say statement of intent instead of pledge in the language.

Christine Robertson

@Rachel Kauer It really depends upon what you put in the query and which canned report you're using. You could easily set the Query to filter out all gifts with the subtype or just pledges with the subtype. Reports such as the Gift Detail and Summary will still show payments even when the pledge is suppressed. I haven't tested this, but I imagine that the pledge based reports may not show payments when the pledge is suppressed.

Dariel Dixon

@Rachel Kauer: If they are pledges everything but verbiage, then why can't you treat them as pledges? I think the legality of these documents is sketchy at best if they aren't signed by the actual donor ie. the DAF administrator. I would imagine that's why the business office isn't worried about them.

I think that using subtypes are a great way to look at this with a combination of DNP, but this may be a conversation that needs to happen between the advancement director and the business office. My organization uses the combination of subtypes and DNP for our verbal "pledges", but it might be a worthwhile option to look into.

@Dariel Dixon
It's actually the Advancement Director who wants the statements of intention tracked in RE. The business office doesn't have a motivation to track them. The reason the Advancement Director wants to track them is that we are headed into a Capital Campaign and is anticipating drafting a bunch of them. So they want to be able to track them in RE as part of the Capital Campaign and to generate payment reminders. We have a lot of donors who want to use Donor Advised Fund Accounts for this which is the primary reason they aren't actually pledges. That said our statements of intent are written, specific, and signed documents, they simply say statement of intent instead of pledge in the language.

Rachel Kauer

@Christine Robertson
Hmm, that makes sense, I double-checked our report filters. I think the payments would still be captured properly. We run two variations of the Detail and Summary canned reports for each campaign bucket, one filtered for unrealized money using Pay Type=Pledge, and another for realized money using Pay type = Cash, Pay-cash, or MG Pay-Cash.

If I only put the query with the subtype filtered out on the pledge one, the other report with the pay-cash would remain unaffected. So this could work!

Rachel Kauer

@Dariel Dixon
Agreed! I had the same thoughts when it was explained to me during onboarding. And that is almost exactly how our business office put it to me when I asked them about why we had them in the first place. They weren't worried because they were not legally enforceable and more like a verbal pledge, nice if we see the money realized, but not an issue if it goes unrealized.

That said I think combining Christine's suggestions on querying out a subtype with DNP as you do for your verbal “pledges” might work.

There is a difficult dynamic when between the two department heads, and I work for both. You can probably guess where that frequently lands me! Rest assured while working on research requests for one I am firmly enforcing a boundary on not being the go-between in these higher level decisions. Wish me luck! Thank you both for your excellent suggestions!

Christine Robertson

@Rachel Kauer So glad that we were able to help!