Hello everyone,
In our organization, when managing a multi-year pledge, for instance a 3-year pledge signed in FY19, we split this pledge across the campaigns when each pledge contribution will become unrestricted: so, one contribution in the FY19 Campaign, another one in the FY20 Campaign and the final one in the FY21 Campaign. All 3 pledges still share the same contribution date in 2019 when the multi-year pledge was signed.
Our Development team has recently changed, and the new members would like to modify our existing process to have a multi-year pledge recorded as 1 pledge in the FY Campaign when this pledge is signed, instead of when it becomes unrestricted and booked in our financial reports. So, in the case of the 3-year pledge example above, this multi-year pledge would be entered as 1 fund in the FY19 Campaign, with the total value split into 3 different unrestricted expiration dates: one in 2019, one in 2020 and one in 2021. And so no contribution values would be shown in the FY20 Campaign and the FY21 Campaign.
Is any organization operating this way? What are your thoughts? What are the Pros and Cons compared to splitting the pledge across the corresponding FY Campaigns?
I most commonly see your former operations - book across multiple FY campaigns - but am also familiar with the new team's request/scenario. Both are permissible but I recommend that the CEO and CFO are part of the decision-making. Lumping multi-year commitments into a single fiscal year creates large swings in your revenue by season, instead of steady support, which is in fact what the donors are providing to your organization.
Best,
Megan
And if you go with the lump entry you'll need to put mechanisms in place to ensure that their recognition and benefits remain accurate for the multi-year time span. Otherwise they'll look like a lapsed donor, which they are not!