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Multi-year Pledges paid upfront

Caitlin Griffin

I have a donor who wants to make a three-year gift (combo annual fund and capital campaign) and wants to pay the full pledge immediately. We need them to be included in the annual fund reporting for all three years of the “pledge." What is the best way to enter the pledge and payment this fiscal year to align with our finance team's reporting, but still have them appear as an annual fund donor for the next three years?

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Comments

Dariel Dixon

Welcome to the community @Caitlin Griffin. I'm struggling with this because if the money is in hand, then I don't know what the expectation is. I don't think it makes sense to not pay off the “pledge” and finance will have to report the full amount of the payment, but is this a recognition thing, or something else? I'm very leery of these types of situations, as they almost always get messy.

Alex Wong

@Caitlin Griffin
How do you currently do reporting?

your post sounds like this is a new situation that you hadn't encountered before where donor who wants to make a multi-year gift and pay it all off upfront.

However, you should think about how you are reporting now. What report and how the report shows for someone who is making a multi-year gift, but did not pay it all off upfront?

Caitlin Griffin

@Dariel Dixon Yes, I feel the same trepidation. I am recommending that the gift entry needs to show the full pledge and the full payment during this fiscal year for financial reporting and alignment with the finance team, but the issue is in recognition for the full time period of the pledge. I was wondering if there is a better way to run a canned report or set up a query. Right now, the plan is to manually adjust the donor roll and any monthly reporting to include this donor in annual fund/parent participation reports. I want to avoid this in case of staff turnover or other issues where continuity may become a problem for the office.

Dariel Dixon

@Caitlin Griffin You see the struggle with this. I think what you're considering is the best way to go. Altering the reports and donor rolls manually to add this individual is what needs to be done, but I would only do this on public facing platforms. I don't think it's necessary to add this constantly on internal documents, because those individuals should know what's going on with the gift.

This is why documenting the gifts precisely and accurately needs to take place. I'd argue that this is a great example of a constituent note or even an action where the conversation on how to steward this individual would take place. That should have already been documented, but if it hasn't, this is the time to do so…

Elizabeth Johnson

@Caitlin Griffin How generous of your donor.

I agree with @Dariel Dixon and @Alex Wong. We often guide donors with similar intentions toward creating donor-advised funds. Another approach we use is penny gifting over the subsequent years to maintain consecutive giving, especially if that’s an important goal. This also serves as a trigger for future employees to understand the donor's intent.

I have a gift default set up for penny gifts. Though we don't use it often, it's quite effective. It includes a gift attribute that prevents the gift from appearing in business office or audit reports, and it's categorized as a different gift type.

This method ensures the donor is recognized annually without impacting the accuracy of financial reporting. By using a specific gift attribute, the gift is properly flagged, avoiding potential confusion in business or audit reports.

This approach has worked well for us in similar situations, helping to maintain both donor recognition and financial accuracy. I hope this strategy can be useful for your situation!