This document includes a sample policy template for counting and recognizing all gifts, including planned gifts, to ensure consistency in reporting and compliance with national standards.
Why: Planned gifts often do not mature until the future, and without a carefully thought counting and recognition policy, not only will your charity struggle to quantify gift commitments, it will also be more likely to offend well-meaning donors.
Make sure to customize this document carefully. It is a critical component of your back office operations.
Gift counting and recognition are hot button issues for nonprofits. Too often, charities ignore this important area until faced with a donor who wants far more recognition than the gift deserves. Without a formal policy, the organization has no leg to stand on and usually grants the donor’s request, even though it is not in the best interest of the organization. Worse still, other donors see that example and then ask for similar treatment, leading to bad counting, bad naming and charities overstating their fundraising results.
To combat bad naming and recognition policies, the Council for Advancement and Support of Education (CASE) and the Partnership for Philanthropic Planning (PPP) each created gift counting standards for outright and planned gifts. These national organizations worked long and hard to put together their policies, but could not agree in every detail about how counting and recognition should work.
This document includes a sample gift counting and recognition policy summary which combines the best of these two standards into a seven-page policy document which you can adapt for your charity. The combined strategy calls for your charity to cease counting and recognizing all dollars raised in a single category. Instead, it implements a program which has your charity count three separate numbers which should not be added together. They are:
Using this methodology, your organization has complete transparency for your donors.
All gifts are “counted” and “recognized” at face value, regardless of the type of gift, the date of maturity, or even the likelihood of maturity. However, everyone knows that Category A gifts are current gifts for certain now, Category B gifts are future gifts for certain at an unknown time in the future, and Category C gifts are future gifts for an uncertain amount and time in the future.
No longer will your charity have to worry about showing someone who has named you as the beneficiary on a $1 million face term life insurance policy as a $1 million donor. Instead, that donor is placed in Category C, so your charity is not depending on a gift which is not likely to ever mature to your benefit.