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Handling split /soft credits/multiple purpose gifts from 3rd party agency gifts (eg: Benevity)

Marilynf

Hi everyone,

I'm in Canada and our best practice for recording donations is to enter the contribution in the amount and from the "entity who provided the cash." In the case of 3rd party entities, how do you record the donations and still credit the single individuals and the corporations with soft credits? Is there another way to do this.

For example - received collected donation and matching gifts from companies through Benevity. I can enter soft credits for the amounts to the company, include a soft credit for the original donor as $0 if it's a match/honour donation, and enter a soft credit for a donor where funds were directly collected from that donor with the amount of the gift. 

The challenge is that the soft credit show up in the soft credit reference under the individual as the entire amount of the funds received from the third party (in this case Benevity). This doesn't make it easy to provide stewardship and recognition for donations/donation in lieu from employees as Benevity usually provides multiple companies and individual donations in one funding allotment. 

Does the only way to handle this require donations to be entered separately? That is problematic as you then have more challenges reconciling with my finance team. 

Any help or advice is greatly appreciated!

Also, how do you handle multiple designations from a single donation? Again, there doesn't seem to be a way to split the gift for multiple purposes

Marilyn

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Comments

4 comments

Date Votes
  • Pamela Giles

    Ugh, you're right. I just entered our Crowdfunding Alberta matching grant, with the soft credits (50% of their donation was matched) for all the donors, and on their individual records, the only thing you can see is the whole amount of the grant. Seems like a bug that there's no soft credit column on that screen.

    In the case of matching grants like this, I don't think there's any good way to do acknowledge the match from within Keela. I just thank people for the match along with their regular acknowledgement letter. 

    Can you point to the best practice for entering regular third-party gifts under the person who wrote the cheque? I used to do that (for, say, CanadaHelps), entering the gift under the third party and soft-crediting the original donor. But even Raiser's Edge's handling of soft-credits was not amazing, and it was easy to miss gifts. 

    As a fundraiser, I don't care whether the gift came through a third-party or not; I just care who made the gift. So in about 2012, I switched to entering gifts under the donor's name, being careful to exclude them from receipting and to record the sending organization. (CRA's "Who is the True Donor?" infographic Scenario 4 suggests this is fine.) How do I do that? In LittleGreenLight and I think RE, I created Payment Methods for CanadaHelps, Benevity, Community Foundations (if from a fund and not the foundation itself) and a few others. Keela won't let me do that, so now I use the Source field for this purpose. Source is also used for things like e-Transfer, which is not a Keela Payment method option and is not quite the same thing as EFT. This method also puts all a person's gifts on their Transactions list; otherwise, in Keela, some of them — which can be big! — are hidden away on the Soft Credits tab and easily missed. 

    In Transactions, I can filter by Source (e.g., CanadaHelps) and gift date if I want to see all the transactions that came in with one payment. 

    Accounting/Finance probably needs gifts recorded the way you're doing it now, so if you're using the Aplos integration, you might be stuck doing it that way. I'm not using Aplos. It's not hard to reconcile Keela with QBO at the end of the month when I have the Source field showing in reports. 

    Matching gifts like my Alberta Crowdfunding one and maybe some of your Benevity money are a problem. Keela really needs to give us a way to see the person's soft-credit total for that transaction, not the whole transaction amount. Entering them all separately is probably the best solution, as you suggest.

    Pamela

     

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  • Marilynf
    • Edited

    You're right that there isn't always an easy answer. 

    With donations received through another charity, the True Donor is that charity. Yes, the charity received the funds through another donor (their donor in most cases as these entities issue tax receipts as they are registered charities), therefore, the True Donor to you as an organization is the charity (the entity that had legal rights to the funding and transferred the funds/assets to your charity) - the original donor is theirs. Think of it in the same way you receive a grant from a foundation. The Foundation is the true donor, not the directors or other supporters who have provided the funds. Donor Advised Funds are another good example, the Donor Advised Fund (DAF) is the True Donor to you in the legal sense, not the person who established the DAF. The grey area is that these donations do not get tax receipted so, technically, can be recorded however you'd like, however, best accounting practice is to record in the name of the True Donor/legal owner of the asset (note: a donor to another charity relinquishes all rights to the asset when provided to the charity who then owns the asset). The situation changes only if your charity is the entity that issues the tax receipt, then the true donor is the person providing the original gift.

    Professional practice for acknowledgement and recognition for donations from third-parties typically includes "soft credit" recording so that the credits can be accumulated to the original donor, if the original donor is known.

    I actually found Blackbaud products generally handled these gifts and credits well. Gifts from 3rd Parties could be split with the amounts and soft credits applied to the original donors if known. The credits would then be included in the donor's records appropriately, not as a lump sum of the total gift. This is the problem with Keela, and one I hope they will address. Recording the gifts directly to the donor and not the True Donor, although not impacted from a receipting standpoint, is not desirable or a recognized allowable practice in proper accounting.

    As more and more donations are received this way eg: Benevity - donations through employers as well as matching gifts; Donor Advised Funds through other charities, etc, it will become even more problematic moving forward.

    Keela also needs a better way to display soft credits in a comprehensive manner. For efficiency, I need to be able to see both true donations and soft credits in one location so I can adjust acknowledgement and recognition appropriately. Running multiple lists or having to check multiple tabs isn't efficient in anyway.

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  • Pamela Giles
    • Edited

    I agree that entering third-party the way I do it is not the Accounting way (I said that in my response) and that the accounting software would be different.

    The accounting way, especially in Keela, does not work well for fundraising. In Keela, soft-credit gifts don’t show up on a donor’s giving record, so this means these donors aren’t going to show up on regular reports that identify top donors. Some of them (who give only through third-party organizations) don’t show up at all! These gifts are regulated to an entirely separate, difficult-to-get-to, Soft Credits screen — where, as you note, the amount shown isn’t even the amount of their actual gift if there were other gifts in that payment. This is a big problem.

    It works decenly in Raiser’s Edge because soft credits — in the correct amount — do show up in the person’s giving total, their list of gifts, and in Annual Giving Reports (with an *).

    If your organization wants to enter gifts under the third party and soft credit, then breaking up the payment into the individual soft-credit gifts as you propose is probably the best solution. But it would still be a good idea to have some way for fundraisers to recognize, “Oh, this is a person with soft credits” visible on the main screen so they know to go looking. A tag might work for that.

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  • Marilynf

    Baby steps I guess. I did request changes on the Ideas Portal. Once it gets posted, it would be great if you could vote on it and add your comments. Maybe that will help.

    I'll have to consider how a tag might help. You're right, at least it would show up and the user could dive into it more deeply.

    Thanks for the great conversation!

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