This is the new policy I've come up with for entering United Way pledges. Please let me know what you think.

For all pledges made to us through United Way: When we receive notice of the pledge, I create an individual record for the donor in RE, then enter the full amount as an "Other" gift. If requested, I send an acknowledgment thanking them for their pledge.

For pledges made to us through the Local Campaign: Since we received a report with the pledges for this campaign, breaking down how much the payments were and how much is deducted for processing fees, I think I can enter the master pledge for these on the UW record, then attribute each payment to them until they are fulfilled (If I'm wrong about this, please let me know).  So I enter the pledge on the UW record MINUS the processing fees, and WITHOUT soft crediting anyone.

 For pledges made to us through the Public Sector Campaigns (CMC, CUNY, and SEFA): Since we do not receive a report with these, we would not be able to tell how much of each check is attributed to each pledge. Therefore, I do not enter the master pledges for these on the UW record, and just enter enter each check (all three of these campaigns come to us in one check) without soft crediting anyone.

 I hope this makes sense, and I would very much appreciate your feedback. Thank you.

I am remembering how we did it at my old job (2 years ago), and it was very much the same.  We put the United Way pledge amount for each individual on their personal record, full amount, as "Other".   We thanked each and every one for remembering to designate us throught their UWS gift.  No tax language as the gift was really made to UWS.   Then I would book the amount of the entire pledge, subtrackting the 17% in fees and uncollectable first.  Then as the 5 checks  were received from UWS they go against the pledge booked on the main record.  If all went well, we would have over estimated the 17% and the final gift would be more than the pledge, thus no write off.  Once we thanked the donors, we did not touched their records in connection to their UWS designated gifts again that year.  We did not pay attendtion to if and/or when their specific gift was covered by the UWS checks.   As the "Other" gifts were excluded from reports, we only reported/counted the main pledge. 

Gifts from other non-local UWS were counted as cash gifts.  Again if I am remembering correctly, we only had a few of these and for the most part, we had no addresses on the donors. 

I think there is another thread about these types of gifts somewhere - but this is how we've handled them (Be very careful that none of these Untied way donors get IRS receipts from you - they did not give to you - they gave to the United Way which is a Charity all on it's own - and never count these soft credits as revenue to your org)

We put the Checks from the United Way on the United Way account and receipt the United Way. We soft-credit all the donors the United Way should be including with each check they send you. I send soft credit thank you letters to these donors (no dollar amount mentioned - not tax receipts - no irs language) I never enter the pledges that the United Way informs me of because the donors can renig on those pledges and you absolutely would not want those to be on your bad debt ratio. Until we have received the actual money from the United Way - we don't process anything.

Megan,  What you described sounds exactly like what we do provided that (as has been stated already) the acknowledgement to the individuals fromt he "Other" gift does not include receipt language and clearly states that they gave to united way and designaged to you.

Good Morning Laurel.  I wanted to ask your opinion/suggestion on how to best handle my scenario.  Normally, if United Ministries receives a gift from an United Way agency and it's specifically designated from one donor, I would enter the actual gift onto the UW record and soft credit the donor who has designated their gift to come to our organization.  However, the gift I currently have is still one gift; however, the amount of the check received from UW is different than the actual designated gift amount because of the fees involved in processing, admin., etc..  United Way does not want tp be acknowledged, receipted, or anything, however, the donor does want to receive an acknowledgement of their gift.  Currently, we don't have a letter specifically for "soft credit" gifts that have no mention of $$ amount, irs language, etc...  I want to make sure I set this up correctly, where I am acknowledging the amount given to us by UW, as well as acknowledging the pledged/paid gift from the designated donor. 

Thanks for any insight you can provide.

This is precisely why I do not use soft credits for United Way gifts - because when only one donor is involved you can not soft credit for more than the check amount.  This is why in addition to entering the check or pledge from UW - I enter a completely separate gift using the gift type of "other" on the individual record for the full amount of their pledge.  I never count other gifts in financial reports - only for recognition.  Also the acknowledgement for Other gifts is not a receipt - it is simply a thank you.

If you search through previous postings you may see some more detail than my short description above of this option.

I'll give you a quick example:

Bob Smith & Suzy Jones  each donate $200 to the United Way and designate the money to your organization. The United Way must send them a receipt for their donation.

The United Way Sends you a check for $380 along with a note saying that Bob Smith designated $200 & Suzy Jones designated $200 and they charged $10 in fees for each transaction.

I put $380 on the United Ways account and absolutely acknowledge them as per IRS regulations (any gift over $250 MUST be receipted) for $380.

I then soft credit Bob & Suzy for $190 each - which is what they actually gave to your organization because they really donated to the UW not your organization and if UW disclosed that they charge fees then they should know that all of the donation did not reach you.

I then send soft credit acknowledgements to Bob & Suzy with no mention of dollar amounts. (I also would include these folks in my next solicitations so they have the option to donate straight to you if they were not already on your solicitation lists)

I do count soft credits in my recognition groupings so if they are short $10 of reaching the next level - they are short $10 - that is their responibility because they have the choice to donate straight to you as opposed to donating to another charity.

I can see why Melissa does it her way - but I use Other gifts for another purpose so I wouldn't want to get any of that mixed up.

I am not sure about your United Way but my United Way specifically says that we should recognize and acknowledge the individual donors for the full pledge amount - not the amount after fees.  Therefore your solution would not work. 

Even if they did not require it we do not believe it is good donor stewardship to have a "so what?" approach to donors who had fees taken out of their gift - do you do that for those who pay by credit card - take out the 5% fee you have to pay? That would only be fair after all - they had the choice of paying by check and didn't.

I should have been more clear, I too use "Other" gifts for other things so I also use a gift Subtype of OTHER - United Way Pledge on those that are UW and my letters are conditional based on both type and subtype.

One more thought,

It is actually not completely true that every gift over $250 must be receipted.  IRS publication 1771 says:

"There are two general rules that organizations need to be aware of to meet substantiation and disclosure requirements for federal income tax return reporting purposes:

● a donor is responsible for obtaining a written acknowledgment from a charity for any single contribution of $250 or more before the donor can claim a charitable contribution on his/her federal income tax return

● a charitable organization is required to provide a written disclosure to a donor who receives goods or services in exchange for a single payment in excess of $75"

I agree that you can do it your way, however - the United Way is another charity - not a credit card processor. If we had a contract with the United Way and they were billing us for fees they were administering separately from donations being made to the organizations I could justify AND record it as an expense of doing business. The way they are managing it I cannot do that.

The United Way does not 'tell' us how to run our business. They cannot legally 'tell' you to recongnize and acknowledge a donor for donations you do not receive - The United Way is responsible to acknowledge the donors for the full amount. Nothing you ever send a United Way donor should ever mention a dollar amount.

 Stewardship is different than accounting - so if a soft credit donor is 'short' a fee from something like this, we can choose to round them up to the next donation level - and we frequently do that with many different donors who are short based on a numbe rof things (stock gifts being less valued than intended, etc.)

If you are a member of United Way you do have a contract with them and that may be the difference. 

I totally agree that I wish all donors gave directly rather than use United Way as their giving vehicle.  But either way I look at it more from the donor's perspective - they often "have to" participate in United Way at work and since they do - why not make their gift to you at the same time.  I guess I feel differently that, although I did not authorize their fees as a cost of doing business, I likely would not have gotten the gift without them therefore will honor their stewardship request to not only mention a dollar amount but to use the amount before fees.  The donor sees their gift as a $200 gift and I want to recognize them at that level even if UW did not make me.

Melissa, I generally agree with you and Blackbaud's software is such that things can be managed many different ways. If you choose to 'acknowledge' a soft-credit pledge the way you're doing it by using other gifts as opposed to soft credits that is absolutely a valid way to do it. I think recognition may be 'cleaner' the way you do it - you may not have as much 'eyeballing' to determine if someone moves up a giving level.

I just personally know that you are an advanced user and may have many systems in place to prevent you from 'accidentally' sending an IRS receipt for a dollar amount you didn't receive to a donor that didn't actually legally donate to your organization.

For me it makes sense if using the mail function to receipt it doesn't allow soft credits so I know I can't make a mistake there. After I receipt everyone I can just 'unreceipt' the one UW donation and run an Acknowledgement that is setup to process soft credits only and has no mention of a dollar amount on it.

If the United Way was willing to send us the entire donation and bill us for fees separately, I would be thrilled to manage it as outright donations versus expenses.

My credit card vendor sends me some of my card payments after fees and there is no billing of fees at all.  I don't see it as different but I can see where others might. 

In the solution I use (actually found on Blackbaud's knowledgebase) there are actually no soft credits so it is even easier for me.  One gift from UW marked do not acknowledge.  One Other gift on the individual marked acknowledge.  The letters are formatted to use no receipt language on Other letter.  Quite easy and not sophisticated at all.  No running letters twice - unmarking gifts receipted - etc. In fact, it is even easier since I only enter one other gift from the campaign report and acknowledge them for the full pledge.  When disbursement checks come in there is no soft credit, no additional other gift, no receipt for the rest of the year.  woo hoo.