Hello,
We are having a conversation about unrestricted pledge recording on the Development side. In my 20+ years in Development Operations at different non-profit organizations, this was never an issue. Now I find it is an issue in the performing arts sector. I can't quite put my finger on why one would record what are essentially pledge payments literally across fiscal years rather than using the pledge payment functionality built into the database to record and report cash flow. What is the benefit to your development dept. to spread out the pledge over future FYs rather than using the payment schedule?
I am assuming that memberships may need to be set-up manually to accommodate using the pledge payment functionality. Also assuming that your finance dept. is recording the entirely of the pledge as a receivable according to FASB guidelines.
I am interested to hear from other orchestras about specifically what method/process you use to record unrestricted pledges and pledge payments. Please feel free to contact me directly at alawson@laphil.org, if you prefer.
Thank you!
Anita
Anita Lawson
Director of Development Operations
Los Angeles Philharmonic Association
151 S. Grand Ave.
Los Angeles, CA 90012
Tel: 213-972-0731
Internal: x7731
The basic logic most organizations use within Tessitura is to put the pledges into the FY Campaign that the restriction is expected to be lifted. The Funds track both the restriction and unrestricted and are reused every year. This prevents changing the contribution (as Development is used to seeing it) when Finance needs to release it from restriction. (See slides on pages 4-5 from the “Basic Development – Structural Concepts” pdf from TLCC2015.)
If you really are getting a fully unrestricted pledge that happens to have multi-year payments, then yes, your instinct of just using the pledge payment schedule feature is correct. In my world, that’s a small fraction of our open pledges.
Most of our pledges that have multi-year payments are also restricted to supporting the operations (or a program) within the fiscal year of the payment scheduled. So, if you are getting a pledge with time restrictions of three years you’d enter three lines of contributions all within the same fund but different campaigns. Our business practices are that all three contribution dates are the same, and all will be posted with the same date, so that both Finance and Development can clearly see what was newly raised unrestricted and restricted funding. The Fund Activity Report is brilliant at reporting how Development likes to see things (by Fund) as well as how Finance needs it (by Campaign and then Fund). Also, if your organization is using Tessitura as a sub-ledger, to do the 990, or any grant reporting, you may want to discuss further with them before changing how pledges are booked.
Sarah