[Diana]

In 2006, we booked pledges (3 and 5 year annual installment) to retire some debt. This year, due to a major gift, we were able to retire the entire balance of the debt. Our Director is now allowing those who pledged to or contributed to this effort to redirect a percentage (51.24%) of their pledge or gift to another fund(s). Some of the pledges have been paid in full; others are in various stages of their obligation. I am seeking advice on how to account for these reallocations in RE. I understand that split gifts may create reporting problems. What is the best way to account for changing of funds in payments received in a prior year?

[Melissa Siobhan]

This is a good question for the listserv at www.fundsvcs.org. I am willing to bet, however, that they will ask why did you oversolicit for this? You already had a portion of the debt covered and why did you not just have the major donor cover the balance and allow them to redirect the rest of their gift somewhere else? It is typically not good donor stewardship to collect a gift (pledge) and later go back to the donor and tell them we do not need your money for that after all. You may totally confuse your donors and strain the relationship.

For those who are completely paid in a previous year why would you go back to them at all? I might see changing those who still have outstanding balances but I would not recommend changing those who've already fully paid. I totally see this as a Donor Bill of Rights issue - you are giving them no choice but to redirect their gift and you may need to refund some money and lose donors due to this error.

You will need to decide for yourself if splitting gifts creates reporting problems for you - it depends on what reports you use - I split gifts with no problems. You should know however that a split pledge will split future payments by default so you will need to change your payments after RE puts in a split payment by default.

[Diana]

Thanks for your response. It seems that I should have provided a bit more background information to my original post. The donors are all board and advisory board members, so they have more information on the need to retire the debt (and the amount needed at the time to completely retire that debt) and hence the reason, in my opinion, that the Director is allowing the reallocation option for those who have paid their committment in full. The major gift came from a board member who passed away this year.