RE NXT Pledge Write-offs in FE NXT

Daniel Wallach

We're deciding on the process for handling inactive pledges in RE, either via write-offs or gift adjustments. At the same time are looking to start posting to GL directly from RE.

On the RE side, I've been heavily encouraged by other users to go with adjustments due to several issues with how write-offs work, especially re: meaningful/accurate reports and lists - see below for my post in the RE community.

I'm wondering if anyone on the FE side can say anything about how either write-offs or adjustments affect the GL or anything else on the finance side, particularly if you have RE>FE integration and are using direct post to GL. I haven't seen much in the KB or FE community.

https://community.blackbaud.com/discussion/85160/writing-off-vs-terminating-pledges-looking-for-clarity

Crystal Bruce

Hi @Daniel Wallach - My team says these are handled differently across organizations, often based how their auditors prefer to approach it. If you’re planning to start posting data from Raiser’s Edge to Financial Edge, it’s commonly just cash gifts that are posted—not pledges—since pledges don’t impact cash or financials until they’re actually received. Because there isn’t a single “right” answer and audit expectations can vary, it would be a good idea to confirm with your auditor what approach they recommend.

In the meantime, we'd also love to hear how others in the community have handled this and what’s worked well for them!

Crystal Bruce

Hi @Daniel Wallach - I am checking with my team on this!

Daniel Wallach

https://community.blackbaud.com/discussion/comment/313458#Comment_313458

Thanks @Crystal Bruce. Honestly posting only cash gifts was what always made sense to me every time I came back to this, but the lack of direct discussion about it in the FE KB and community combined with the options in RE to set GL distribution for all gifts types made me think there must be some obvious good reason to post everything to the GL.

The only reason I could think of to post pledges/recurring gifts too is if the Finance team needs it for income projection, which we already get from RE and Billing Mgmt on the Development and Tuition side, and not something Finance typically handles.

Before your response, I spoke with our Director of Finance who also couldn't see a good reason to post anything other than cash, and after confirming that accounting standards don't require these to be posted, we are going to go ahead only posting cash gifts.

Crystal Bruce

https://community.blackbaud.com/discussion/comment/313473#Comment_313473

Thanks for coming back in and sharing!

Patricia Nowak

Just want to weigh in on this and make a statement regarding how we deal with pledges and statements of intent. We record pledges as fundraising revenue only and receivables on our GL when they are initially received. We do this at a fund/allocation level, not in the specific project that the pledge is for. As pledge payments are received the cash is credited to the benefitting project and the pledge receivable is reduced by that amount. Revenue and receivables are adjusted at the time we receive a payment accordingly in the GL. We do not record statement of intents on our GL and only recognize SOI payments as gifts at the time they are received. For those "pledges" where the donor plans to make their payments using Donor Advised Funds we structure those as statements of intent.