I was curious how others handle situations where you get a pledge from the donor and book it in RE only to realize when you get a payment that it's being paid through a donor advised fund that clearly states "the grant is not being used to satisfy a legally binding pledge." This has happened a few times here and we've ultimately written off the pledge, adding the payments as cash. But, this causes anxiety with our fund raisers because the pledge amt is not reflected in fund raising totals. If we have a signed pledge form from the individual donor stating they will fullfill the pledge, can I apply all payments received be applied, even if through a donor advised fund? I referred to CASE's Advancement Services publication but also wanted to hear from others on the frontline as to how you handle similar scenarios. Do you default to your auditors advisement? Thanks!

 Kate

We have had that happen a few times as well. Many times donors don't inform us that they plan to pay their pledge through a DAF.

I guess I don't understand the issue your fund raiser's are having because if the pledge is written off, and a cash gift is entered - it still counts as revenue (in the same fiscal year). The Net result of fund raising totals should be exactly the same.

We do exactly as you do - we write off the pledge by the amount of the cash gift received and enter a new cash gift. I would not apply DAF's to pledges - especially if there is documentation from the DAF that are you are signing stating you are not to apply it to a pledge. If that gift got pulled for audit scrutiny you could be in trouble.

We have had the same issue.  We chose to delete the original pledge.  Entered the gift on the DAV org record and soft credited the individual. 

I don't understand the problem with it not appearing on reports.  The only place the gift is not going to report is a 'pledge' report.  If you use a report that includes gift types of pledge and cash you will get both.  If all your reporting is by 'pledge', I'd suggest entering the DAV gift as a pledge on the DAV record and then record gift as pledge payment.

In our case it may be a multi-year pledge so the payment recv'd is much smaller than the pledge amount, which is then not appearing as funds raised. But, if you only write off the portion of the pledge that came in from DAF as opposed to the whole pledge, that would take care of our issue with the full pledge amount not being included in fund raising totals. We wrote off the whole pledge assuming most if not all payments would be coming from DAF, so couldn't book the pledge at all.

In the case of multi year pledges I write the payments off one year at a time as payment is received. I don't make the assumption that all payments will come from the DAF.