Multi-Year Pledges

That is a great question! I will first say that our organization has not made this move. We track things the way you are looking to. So if a donor, today, commits to giving $1,000 a year for the next five years, for us, that gets recorded as a $5,000 pledge. I don't have answers to all your questions, but a few things did jump to mind.

REVENUE vs. CASH REPORTING
One implication is that this will affect your Revenue reporting (and maybe even your goal setting). This is (likely) something you haven't had to think about up to this point. And your organization may use different terms. For us, this is the difference between Revenue and Cash. Pledges are revenue and pledge payments are cash. One-time gifts, recurring gift payments - those appear in both revenue and cash reports.

So up until now, that $5,000 pledge was spread out for you across those five years. And on the books, it looks like $1,000 of revenue each year and it also looks like $1,000 of cash each year (assuming the donor gave on time). But now, if you book that pledge today, when you go to create a revenue report you would pull in all $5,000 of that pledge for 2021. And in subsequent years, none of that pledge will appear in your revenue report. So you got credit for that pledge in the year you book it. Your cash reports (pledge payments) would remain the same. $1,000 a year each year (again, assuming everyone gives on time).

OVERPAYMENTS AND SCHEDULING INSTALLMENTS
You mentioned implications for gift processing and aligning to installments. For the most part, this is pretty straightforward. Raiser's Edge does most of the work for you here. I'm not using Raiser's Edge anymore (we moved to Altru), so I can't remember if you can tell RE what to do if the donor gives more than the installment amount. I believe it's a setting in RE, but you may be able to choose whether the overpayment goes toward the next installment or toward the balance (or, rather, the last installment). But to answer your specific question, if the donor pays extra - say the installment is $1,000 a year and the donor gives $1,500 this year - we do not put that in a holding account. And we do not wait to record it in RE. Go ahead and get that in because that is the amount you received at that time. One question you may want to answer with the donor, if possible, is whether you can expect $1,000 next year or are they giving $500 next year.

To the best of our ability, we try to understand the donor's installment schedule. This is something our gift officers are asked to get in writing or, maybe, re-cap a conversation in an email to confirm. How much can we anticipate receiving each year? And, roughly, when can we anticipate receiving it? This will allow you to build out the installment schedule on your pledge. Ideally, you'd love to know the month you can anticipate getting the gift, but the quarter is good too. Knowing all of this info helps you with cash planning.

PLEDGES PAST DUE REPORT
When I'm scheduling pledge installments, I like to schedule the installment for the first day of the month that I'm expecting them to arrive. This may seem basic, but I think some people default to thinking about the end of the month (because it's not “late” until the end of the month). Scheduling on the first day of the month allows me to really use the Pledges Past Due report. I believe that's a canned report in RE. And I believe the report lets you list the time increments a pledge is late by. So, say, 0-30 days, 31-60 days, 61-90 days, and over 90 days. If you put the pledge at the beginning of the month and then you run this Pledges Past Due report at the beginning of the month, the people in your first 0-30 day bucket will not actually be late, but will be the people you anticipate receiving a pledge from that month. So your gift officers can reach out to remind them, if appropriate. This is very handy.

MULTIPLE DESIGNATIONS/FUNDS
Let's say a donor wants to give to two designations (or say two different Campaigns/Funds). “I'm giving $5,000. I would like $2,500 to go to the education program and I want $2,500 to go to the capital project.” I remember having an issue with how Raiser's Edge reported on split gifts. I feel like I didn't like the way they appeared in either Query or Export. So I might do some testing on this. See if this appears to be an issue to you. Talk to your Customer Success person. Maybe they know a trick that I never figured out.

I think you're making the right move to switch over to this other way of booking multi-year commitments. If you have other questions, if I can help in any way, definitely reach out.

Good luck.

Chris