Hi all,
I've just started working for the Chicago Symphony and I'm looking for suggestions on dealing with patrons who pay their individual gifts through family foundations, but for all intents and purposes are recognized as individuals. (i.e. The personal check that comes with the "The XXX Family Foundation" and the address is either their home or business address.)
This stands in contrast to those patrons who want to receive "credit" for having suggested a gift from their donor-advised fund or a foundation for which they are a board member or trustee.
I've walked into a situation where there isn't a clear policy and I'd love to provide our gifts and records department with sound advice and some consistancy that is both logical and legal.
In addition, not having my own funds to start a family foundation, I'm not up-to-date on the fundamental differences between the types of foundations people can create. In past jobs, I've always been responsible for knowing how Tessitura works, but now, in my new job, I'm also responsible for knowing a little more about what the the legalalities require.
I'd love to just say that in all cases the money goes into the account where the money came from and soft credit the individual, but in an organization as large as this, I fear that could lead to soft credit hell, especially with these gifts that fall into this strange gray area.
Now that I've written a novel, this is what I'm looking for:
1) Are there any other large/medium sized organizations that have had this issue and have found a great way to categorize and deal with these accounts?
2) Do you receive any irritation from donors when they discover you have given their private foundation or fund its own account?
3) Is there really a shade of gray? I'd love to be directed to reading materials from the IRS or other sources on foundations, etc. that could help me with this.
Thanks for your help! I'd love to hear what you have to say.
Best wishes,Ryan Sedgwick
We set up an entirely seperate constituent type for Family Foundations and set-up the account in the same way a Corporate record looks.
I've attached a screenshot of what it looks like, but in case it doesn't work, just click on the link below: http://i40.tinypic.com/e9dk3r.jpg
We add the second name of the record to the account under the Alias tab so that it's searchable & add the name to the general tab. We treat Family Foundation records as individuals. Any other addresses (if default is a buisness address) is recorded under the addresses tab.
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Hi there,
I have found that keeping separate records only makes sense if the donations are voted by a foundation board and don't represent the donation of the donor him/herself. In other words, if the foundation has a life of its own and does its own thing, regardless of the donor in question.
I think that the answer to one of two records question may be more philosophical than practical. Do we want the Tessitura development functionality's PRIMARY role to be that of a device to track donor history, donor behavior, trends and "who-to-ask for a repeat-gift" OR do we want its PRIMARY role to be the tracking of payment instruments, namely foundation check vs. personal check vs. DAF check or "paying entity"?
We are already unable to tell the difference on credit card transactions as it is. When someone pays with a credit card online, do we stop them from choosing a their individual record if the guy tries to use a corporate credit card? The answer is: We will never even know the difference.
If they make a donation, that way, can we produce a different acknowledgment letter?
On the other hand, I do understand that a DAF is a separate legal entity and that telling what came from a DAF vs what came from a personal account has its importance. My take on it though is that, as a development piece of software, Tessitura's role in tracking the latter is its SECONDRY role. Not its primary role.
A great idea from this discussion I believe, is using payment methods to tag DAF checks, Foundation Checks, etc. in the same donor’s account. This also helps with (manually) being able to tweak acknowledgment letters.
When development software is designed, certain assumptions are made. For instance: that we are tracking "a donor". And for all intents and purposes that's what the primary role of the program will excel at. Yes, you can have associations, and other afterthoughts that will cover questions like “well DAFs are separate entities”, “the guy can pay with his newest corporate venture”, etc. but when you make the decision of splitting a person's giving in a DAF account one year, his dot com commercial venture the following year, his real estate one the following, and his personal account this year, you will necessarily have him in every LYBUNT list, year, after year, after year. When your basic development questions arise, like who has been supporting us for at least x number of years, “his giving” will be one year in each account. So he won't be considered "he", “the donor” as the premise of the program's design was. You will have four entities with one year each that may or may not show an association (or a hundred associations for that matter). This will never really let you track and re-solicit the same guy who has really been behind all this giving all along...
I believe the IRS rules of tracking separate entities with regard to giving for one thing are not Tessitura’s primary role. (It can do it though). They can be the accounting software’s role, for instance. Auditors will eventually want to see Tessitura records, but what they really audit is the financials in the accounting department; so I don’t see that we are breaking any rules. I asked for these rules in writing by the way and could never get a copy and no one was able to show me that this has to be split in the development side of the tracking.(Yes, I visited IRS.gov). I would love to see these rules. For another thing, I believe the rules of telling these payments apart can be complied with by using an approach like the DAF-check payment method approach. We can report on it but not at the cost of losing out big development picture.