Donor Advised Funds and Third-Party Donations
- Sometimes donations come through a third party, such as a fiscal agency, payment processor, or donor advised fund (a donor advised fund is when a group of people [organizations, individuals, or families] pool their money together to make charitable gifts. Donor advised funds are usually managed by a third-party entity that is a registered charity or fiscal agency). It can be difficult to determine how to record these donations in CRM when there are two or more entities involved in a donation. For example, the Acme Foundation may send the check and be the fiscal agent for the Dundee group, a donor-advised fund. The Dundee group administrators made the decision to send you the money, but the check came from the Acme Foundation. Or, another example, United Way may send you a check for funds collected from their employee giving program, in which companies can use United Way to collect and distribute charitable donations made by their employees. The check comes from the United Way but the donations are from individual donors not affiliated with the United Way.
- In general, there is no one right way to record these types of donations. There are several ways you can record these donations. However, we do recommend that you pick one way and then be consistent—across all staff/departments—so that your reports will produce good and consistent data.
- In general, we suggest using the following questions as a guide when recording the donations involving multiple entities:
- Who made the donation (who is the decision maker)?
- Is the entity sending the check just a pass-through/fiscal agent or did they have decision making authority related to the donation/who to donate to?
- Who gets the thank-you letter?
- Only the entities entered in the Donor (Contact) Name and Soft Credit fields get a thank you letter generated inside of CRM. Those who should be thanked for the donation should be in one of these fields.
- The simplest way to record fiscal agent is to add a notation in the payment reference field or the Gift Memo field (e.g. "check #165729 from Acme Foundation"). However, this will make filtering or grouping by fiscal agent in reporting difficult.
- If you need to filter or group reports (or search in advanced search) by fiscal agent, then, if your organization does not receive any tribute donations, you can use the Tribute field on the Add Gift screen and choose on“On Behalf Of” to record these gifts. In the first example, the donor would be The Acme Foundation and in the “On Behalf Of” field would be the Dundee Group.
- Alternatively, you can use the Gifts Additional Information Custom Dataset to record the name of the fiscal agent and/or the “on behalf of” (if you can’t or don’t want to use the tribute information section for this information). You would add your own custom field (perhaps called "fiscal agent" or something of that sort) to this custom data set.
The Acme Foundation sends a donation on behalf of the Dundee Group (a family trust). The Dundee Group wishes to remain anonymous. The award letter specifies that the thank you letter/acknowledgement should be sent to the Acme Foundation. You have no other information about the Dundee Group (no contact information such as primary contact name or address).
Suggested Set Up #1:
Donor Name: The Dundee Group c/o Acme Foundation (create an org contact for Dundee Group; mailing address line would be “c/o Acme Foundation” and Address Line 2 would be Address Line 1 of Acme Foundation’s mailing address). Org Primary Contact for the Dundee Group record would be Acme Foundation or the the primary contact at Acme Foundation.
Thank You Letter: the thank you letter go to Dundee Group c/o Acme/to Acme’s Primary Org Contact
Suggested Set Up #2:
Donor Name: Acme Foundation
Tribute Gift Info or Custom Data Set: On behalf of Dundee Group
Thank You Letter: the thank you letter would go to Acme Foundation.
The United Way sends you a single check for multiple donations from individual donors who have given through various employer sponsored giving programs.
Suggested Set Up #1
Donor Name: If United Way provided the individual donor names, then the donor name is the individual’s name. If United Way didn’t provide the individual donor names, then the donor name is “Anonymous Anonymous” – enter all of the amounts as separate donations instead of one big lump sum donation (this same example applies to third-party donation processors such as Network for Good and when a foundation is acting as the fiscal agent for a trust or founation).
Other: add a note indicating the check came via United Way in the Gift Memo field or in a Custom Data Set “fiscal agent” field. Alternatively, you can also enter United Way in the solicited by field.
Thank You Letter: the thank you letter would go to the individual donor.
Suggested Set Up #2
Donor Name: If United Way expects a thank you for the donation(s) and/or has not provided a break down of the individual donors because this is a % of the total giving pool divvied up by United Way instead of donations specified to go to your organization by the donor, then the donor name is United Way.
Thank You Letter: the thank you letter would go to United Way.
Acme Foundation sends you a donation from the Dundee Group. The Dundee Group makes the funding decision, but the Acme Foundation manages the operations of the Dundee Group’s trust/funds. Both the Dundee Group and Acme Foundation expect a thank you letter.
Suggested Set Up
Donor Name: The donor name is Dundee Group and Acme Foundation is listed as a soft credit donor.
Thank You Letter: both Acme and Dundee will get a thank you letter.