pledge gifts and payments

 

Pledges are donors' promises to give a certain amount of money to an organization over a set amount of time. These pledges can be recorded as multiple gifts in the akoyaGO CRM.

 

creating a pledge gift record

 

Navigate to the Donor record. Select the Gifts tab, and click on + New Gift:

 

 

When the Quick Create window appears, make sure to change the Gift Type and Gift Payment Type to Pledge. You can indicate the Estimated Pledge Pay Date from the Quick Create window as well.

 

 

On Save, the system will automatically create a payment record. In general, Pledges are typically gift commitments that are spread out through multiple payments. If your pledge will be paid in more that one installment, you will need to go to the auto-created record and edit the amount.

 

 

 

 

 

For this portion of the guide, the following example will be used:

 

A Donor pledges to give multiple gifts for the purpose of repairing a theater. The total commitment will be $4000. The Donor promises to give 3 separate gifts, paid every 2 weeks. The first two payments will be $1000 each, with the final payment being $2000.

 

Creating pledge gift payments

 

Open the payment record that was auto created from the Gift record. The following steps should be taken to change this record to be the first gift payment of the Pledge.

 

 

1. Check the Payment Type has been set to Pledge. Move to the next stage. (A record number will appear on save)
2. Check the Estimated Date for the 1^st payment of this Pledge.
3. Edit the Amount field. Once you change the Amount on the record, you will see the Amount in the Accounting box change from the full commitment amount change to the updated amount.
4. Fill in all other Pledge information, but do NOT change the Posting Date. Click Next Stage.

 

**Important - The Posting Date should always be the date of the commitment. It will automatically pull this date in (if creating the payment record directly from the gift record.)

 

5. Click on the Execute button to send to accounting. The payment status will show as Received. (When the Pledge is sent to Business Central, the amount is recognized as a receivable, waiting to be paid.) This will not show as a Paid amount yet, since you have not yet actually received this gift.

 

Repeat these steps for each of the payment records that will total the Pledge’s commitment. Each payment towards the Total Commitment can have a unique Estimated Pledge Pay Date, but they should all share the same Posting Date. 

 

Below you can see that the Gift has all payment records which will complete the Commitment, but none have been paid to bring down the Balance.

 

 

processing payments for a pledge

 

When you receive the actual pledge payment, open the corresponding payment record In Gift Payments. Click on the Receive Pledge stage marker and enter the payment details.

 

• Pledge Payment Applied – Enter the date you received the payment (not the initial Posting Date)

 

• Update Payment Type – Change the current value (Pledge) to be the received payment type. (*Note: If this field is not changed, you will receive an error blocking you from moving forward)

 

• Check # – If the payment was a check, enter the number of that check

 

Click Next Stage.

 

 

This action will send the actual payment information to Business Central, applying it to the initial Pledge entries created on the “Posting Date.” The payments will then be recognized as undeposited funds.

 

 

changes to pledges and payments

 

Sometimes after you’ve set your Pledge Payment schedule, changes can happen. Examples include:

 

• The amount of the payment is different (too much, too little)
• The donor decides to change which fund a payment should go to
• The donor decides to change the account - whether the gift is Spendable or should go to Endowed
• The payor changes – for example, Karen Smith is the original donor, but can’t keep her commitment to the pledge, so the organization she works for makes the last 2 payments for her.

 

In general, if something happens that changes the original schedule of pledge payments, you’ll need to reverse the unpaid payments that are no longer part of the schedule and create new pledge payments to fit the new schedule.

 

 

Using the following example, here are ways to process some common pledge payment changes.

 

Scenario:

 

Andreas Schade and Family has a pledge gift of $8,000 with 4 annual payments of $2,000 each Starting on 5/5/2021 and ending on 5/5/2024. The first pledge payment has been received.

 

Amount Change: Over Payment

 

Over payment – Donor has made multiple pledge payments at the same time

 

The Donor sends $4,000 for the second payment. The Donor’s intent is to cover the next 2 payments (5/5/2022, 5/5/2023) on the gift.

1. Go to the 2nd pledge payment record (Estimated Pledge Payment Date of 5/5/2022) and process it as usual
2. Go to the 3rd pledge payment record (Estimated Pledge Payment Date of 5/5/2023) and process it as usual.

NOTE: both payments will have the same Pledge Payment Applied, Update Payment Type and Check # values.

 

   Over payment – Donor has made more than the amount of the expected payment

 

The second pledge payment from the donor is $2,500. The intent of the donor is not to affect the date or payment of future pledge payments. They simply included an extra $500

1. Process the pledge payment for the expected amount and send it to accounting.
2. Next, enter a new gift and gift payment for the excess payment amount ($500). On the new gift, set the Gift Type to Payment, not Pledge. Process the payment as you would any non-pledge gift

    Over payment – Donor has made a partial prepayment on the next pledge amount.

 

The second pledge payment from the donor is for $3,000. The intent of the donor is to pay the 2^nd pledge payment and $1,000 of the next pledge payment (due on 5/5/2023)

1. Process the 2^nd pledge payment (Estimated Pledge Payment Date of 5/5/2022) that is currently due as normal $2,000).

 

2. Open the 3^rd scheduled pledge payment and reverse it. The reversal date should be the original Posting Date on the gift (5/5/2021).

 

 

3. Create a new Payment record for the gift – this will be Payment Type = “Payment” not Pledge. The payment amount will be the amount of the over-payment received $1,000. Process it through recording the payment. The Posting Date is the date you received the payment..

 

4. Finally, if you expect the donor to pay the remainder of the pledge payment on the original Estimated Pledge Payment Date, create a new Pledge Payment for the gift in the amount of what is left to pay on the next pay date ($1,000). The Posting Date will be the original pledge date (5/5/2021 in our example). Process it only through posting the pledge. The Estimated Pledge Payment Date will be the date of the next expected payment.

 

Note: If multiple future pledge payments will be affected, you’ll need to reverse them all and recreate payment lines to show exactly how/when/how much the donor paid for each payment.

 

 

Amount change: under payment

 

Under payment – Donor has made a less than expected payment and will make it up

 

The Donor sends $1,500 for the second payment instead of the $2,000 expected. The Donor’s intent is to catch up on the next payment.

1. Reverse the payment that was underpaid (2^nd payment for $2,000 on 5/5/2022 payment in our example).

 

2. Reverse the next payment (3^rd payment for $2,000 on 5/5/2023 payment in our example).

 

3. Create a new Payment record for the gift – this will be Payment Type = Payment, not Pledge. The payment amount will be the amount received $1,500 and the Posting Date and Estimated Pledge Payment Date will be the date you received the payment. Process this payment through to accounting.

 

4. Create a new pledge payment record. The amount will be the original payment amount ($2,000) for this payment (3^rd in our example) plus the amount not paid on the previous payment ($500). The Posting Date will be the original pledge date (5/5/2021) and the Estimated Pledge Payment Date will be the date you expect to receive the payment in the future.

 

Under payment – Donor has made a less than expected payment and will NOT make it up

 

The Donor sends $1,500 for the second payment instead of the $2,000 expected. The Donor’s intent is to not make the amount up on a future payment but does intend to make other future payments on the pledge.

1. Reverse the payment that was underpaid (2^nd payment for $2,000 on 5/5/2022 payment in our example).

 

2. Create a new Payment record for the gift – this will be Payment Type = Payment, not Pledge. The payment amount will be the amount received $1,500 and the Posting Date and Estimated Pledge Payment Date will be the date you received the payment. Process this payment through to accounting.

 

3. Go to the GIFT record and reduce the Commitment amount to reflect the new amount being paid on the gift. You may also want to add a note to the gift record’s timeline to indicate why the Commitment amount was reduced.

 

Under payment – Donor has made a less than expected payment and will make an additional payment to make up the difference.

The Donor sends $1,500 for the second payment instead of the $2,000 expected. The Donor’s intent is to extend the pledge payment schedule and make an additional $500 payment at the end.

1. Reverse the payment that was underpaid (2^nd payment for $2,000 on 5/5/2022 payment in our example).

 

2. Create a new Payment record for the gift – this will be Payment Type = Payment, not Pledge. The payment amount will be the amount received $1,500 and the Posting Date Estimated Pledge Payment Date will be the date you received the payment. Process this payment through to accounting.

 

3. Create a new pledge payment record (Payment Type = Pledge). The amount will be the amount of the ‘make up’ payment ($500). The Estimated Pledge Payment Date will be the date the donor told you they would send a ‘make-up’ payment.

 

4. Process the payment through posting the accrual, but not the payment.

 

ending pledge before completed

 

A Donor informs the organization that they will not be making future payments on the Pledge

 

The Donor informs you that they will not make the remaining payments on the pledge.

 

1. Open each of the pledge payment records and Reverse the payment(s).

 

2. Go to the GIFT record and reduce the Commitment amount to reflect the new amount being paid on the gift. You may also want to add a note to the gift record’s timeline to indicate why the Commitment amount was reduced.

 

 

 

 

 

 

reversing a pledge gift payment

 

Open the payment to be reversed, click on the Process dropdown, and select Switch Process:

 

 

Under Initiate Reversal, select the Reversal Type. We recommend using the Original Date for the Void.

 

 

If this is a pledge gift that did not have a payment sent through (most common void,) you may receive the following message:

 

 

This is a warning message for most gift and grant payment records where a payment has not been made. In the instance of voiding a Pledge Gift that a Donor has no intention of paying, you can click OK to continue the void.

 

 

The void process needs to be done for this “payment,” since it was already “received” by Business Central as a Pledge. While there is no payment associated with the information Business Central has, you must send the void information so Business Central knows not to expect payment in the future.