Writing off vs Terminating pledges - looking for clarity

Daniel Wallach
Daniel Wallach
Sixth Anniversary Kudos 2 Name Dropper Facilitator 1
edited March 27 in Blackbaud Raiser's Edge NXT®: General Discussions

We have a few pledges entered years back representing expected/committed revenue at the time, but for various reasons they are no longer practically relevant and we do not want payments to be applied to these pledges or for them to appear in reporting/donor analysis. We do not expect payments from these donors, or if we do, we do not want them applied to these pledges.

One case is a commitment of $1,200,000 in 150k installments, which instead of being entered as one pledge with an appropriate installment schedule, was entered as separate 150k pledges for each installment. Payments were never applied consistently to these pledges, and practically the campaign originally associated with the pledge isn't relevant anymore. Another pledge was entered more recently for a different campaign, and payments seem to have been applied to both pledges at different times with no clear reason (yes this is a process problem!).

In this and similar cases, it's not clear to me whether to terminate or write-off. I know both will stop payments being applied to the pledges, but I also know they affect pledges differently ex. accurately representing the original pledge amount.

I'd think in all these cases they should be terminated so pledge status is consistent when development staff are looking at the record/pledge lists, but it seems to me they should also be written off, as we don't expect further pledge payments.

Write-offs also have implications for Finance - we're trying to get moving posting to GL from RE>FE, so need to be clear on how Development's process here affects them.

Hoping for some clear direction so we can have cleaner data and move with post to GL!

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Answers

  • Dariel Dixon
    Dariel Dixon Community All-Star
    Seventh Anniversary Kudos 5 First Reply PowerUp Challenge #3 Gift Management

    The key here is documentation! These terms are not interchangeable. A pledge may be terminated for a number of reasons, but a write-off may have other ramifications. In this case, I don't think that these pledges should be written off, but I would definitely state via a gift note that the pledges are connected. From what you have described, it sounds like the original pledge may have been completed eventually if this new funding situation didn't come up. But documenting the situation is very important so that users can understand the history of the gift.

    But the one thing you mention is the most important part. Consistency is paramount.

  • JoAnn Strommen
    JoAnn Strommen Community All-Star
    Tenth Anniversary Kudos 5 March 2026 Challenge: Answered Questions January 2026 Monthly Challenge

    I don't know that terminating will clear it as you want from reporting. Test and see.

    Our procedure for unpaid/no payment expected/old pledgees is to adjust amount to $0. This works for posted and unposted, if that's a concern. Adjustment is still coming to webview but can be done in db view. Adjusting is a little more work than 'terminating' but IMO is cleaner. On gift record > Gift > Adjust. Adjusted amount =$0. We enter the reason and, for easy view, we put that reason in reference field, too. Copy/Paste.
    This also leaves a clean audit trail should there be any questions.

    Write-offs, as you said, can have implications for finance and/or metrics. As well as record still shows $ amount and that amount does pull into some reporting or things like # of gifts/last gift amount, etc.

    @Dariel Dixon said, document and be consistent.

  • Elizabeth Johnson
    Elizabeth Johnson Community All-Star
    Tenth Anniversary Kudos 5 First Reply All-Star Challenge: End of Year Fundraising Toolkit
    edited March 30

    I have to wonder if you use of the term "terminate" means they were set up as recurring gifts with an end date.

    You have great responses from @Dariel Dixon and @JoAnn Strommen that I agree wholeheartedly with.

    We do not appreciate how write-offs work in RE so several years ago we made the decision to adjust gifts. Lots of documentation on the record and in our procedures so that we can be consistent and use reports in a meaningful way.

    We do not have FENXT and are not integrated with the business office.

  • Jennifer Branstrom
    Jennifer Branstrom
    Third Anniversary Participant Name Dropper Facilitator 1

    If your Finance Office has these pledges "booked" in their system, then I would write them off. This is what we do and we attached the email or note explaining why we are writing it off. We have FENXT.

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