Multi-Year Pledge Best Practice

Len Gutman
Len Gutman
Third Anniversary Kudos 1 Name Dropper Participant
in Blackbaud Raiser's Edge NXT®: General Discussions

Hi.

I am getting mixed information on how to enter multi-year pledges. Does anyone have an authoritative position on whether:

  1. Enter the entire pledge in year one and schedule future payments. This ensures the gift is recorded in year one, but does not allow you to post the individual pledges to the appropriate annual fund which messes with reporting.
  2. Enter each year as a separate pledge (i.e. if a donor pledges $5,000, $1000 a year for five years, you would enter five $1,000 pledges and as they came in they'd be applied to the appropriate annual fund.

I don't really want to hear how you do it, I want to know if there's a right way.

Thanks.

Len

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Comments

  • Jenny Marquardt
    Jenny Marquardt
    Ninth Anniversary Kudos 3 Name Dropper Participant

    @Len Gutman
    Using number one allows for projected cash-flow.

  • Christine Cooke
    Christine Cooke
    Tenth Anniversary Kudos 5 Name Dropper Participant

    @Len Gutman From what I have experienced option 1 is best practice. The full pledge amount is recorded in year one and the pledge schedule for the 5 years. You adjust as you go if needed. Your reports, including cash flow report will then reflect properly.

    That is also how the Finance/Business office looks at it. The year the commitment was received for the full amount, and then pledge receivables for the payments toward the pledge the following years.

    Some folks do decided to go the other route. Whatever you choose, be consistent and document that this is what you do and why.

  • Tara Cain
    Tara Cain
    Fourth Anniversary Kudos 2 Name Dropper Participant

    @Len Gutman As others have said, option 1. Anytime we have a capital campaign (always a multi-year pledge), this is how it is done. Individual total pledged amounts can be scheduled as the donor wishes, from weekly to all at once. This facilitates accurate projected revenue, seamless reporting, and allows us to generate giving statements for donors that are easy to understand.

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