We hold funds for hospitals whose employees donate to an annual employee campaign, and many of these are pledges (and we're starting to see some recurring gifts).  The Payroll Department processes the actual deductions from employees' pays, which we then receive within a week or so.  As our schedules are not synchronized exactly, what we show as having been received isn't necessarily going to be the same as what has been deducted from employees, at any specific time.  Are there any other entities that have similar arrangements with a Payroll Department, and how do they handle these staggering timelines?  The intitial acknowledgement letter stating the pledge amount, payment schedule, etc. also has a footer/note indicating the letter should be retained for tax purposes.  But, this would only be part of the required documentation, as pay stubs would have the complementary detail.  Should verbiage be included that reflects this scenario?  (i.e. Our letter provides the tax deductible nature of the donation, and the pay stub shows the amounts actually paid.)  Thanks for any feedback, and thank you to all who replied to my recurring gift acknowledgement post!

We send Annual Statements in January for the prior year's donations received (you can't claim a tax deduction for a pledge only the payments). The payroll deduction staggering hasn't been an issue for us yet - no one has ever complained that the documentation may be one pay period off their pay stub.

 I've enclosed some info from the IRS website that talks about this a bit - pay stubs & W2's alone cannot substantiate an employees donation - AND if you allow employees to pay off goods and services offered by your department as fund raisers - the tax deductible amount would be wrong anyway. Most employees don't make a copy of their pledge form and keep it for their taxes so we have found that the annual statement works best and is the most cost effective (instead of sending bi-weekly thank you's for their payroll deduction payments - send one annual report) I can see where the letter you are sending with the schedule on it may be used in conjunction with the employees' pay stub. Our understanding is that the annual statement can be used on it's own without the paystub backup, etc. so it actually works better to send this to employees around the same time you send out W2's from your organization so they receive all of their tax documentation together

Under a new recordkeeping rule effective for all cash, check, electronic funds transfers, credit card charges, or other monetary contributions of any amount made in taxable years beginning after August 17, 2006, the donor must obtain and keep a bank record or a written communication from the donee as a record of the contribution. Written records prepared by the donor (such as check registers or personal notations) are no longer sufficient to support charitable contributions. Bank records for this recordkeeping requirement include bank or credit union statements, canceled checks, or credit card statements. They must show the date paid or posted, the name of the charity, and the amount of the payment. Taxpayers who claim charitable contributions made by payroll deduction can satisfy the recordkeeping requirement if the donor has (1) a pay stub, W-2, or other document furnished by the employer that states the amount withheld for payment to charity, and (2) a pledge card other document prepared by or at the direction of the charity that shows the name of a donee.  An organization described in section 170(c), or a Principal Combined Fund Organization for purposes of the Combined Federal Campaign, will be treated as a donee organization for purposes of the new recordkeeping provision.

We send an acknowledgement of an employee's pledge with payment schedule info.  (Pledge acknowlledgements have no tax value as far as we are concerned,)  In January, we send a receipt (use consolidate receipts option) /thank you/tax statement "verifying amount $XXX received through payroll deduction in 200X." 

I receive an email from payroll department containing fund, amount and employee name at the end of each payperiod.  Perhaps you can check and ask for this within a couple days of payroll, if not sooner. If they processed checks it should be available.

 If you have to continue to work with the delay and you're not already, I would be sure to use gift date of the payroll run.  To me that would make it clear when looking at a record the date you last received a gift from them. 

We've worked to eliminate the delay to make end of month reports, posting etc all run better.

Good luck.

Tim - Our process is similar to JoAnn's. We haven't had an issue with getting the data from payroll on a timely manner. The gifts are imported each month (for the 2 pay periods) before month end.