Many people ask me how to count planned gifts. The first thing to keep in mind is that there is a difference between counting and accounting. “Accounting” relates to how gifts are counted with the finance office. These are the numbers we report on our tax returns. “Counting” relates to how you report on gift totals to donors and the general public. These are the numbers we use on our website, in our marketing materials, and in our presentations. The two numbers will never be the same.
There are several associations that publish recommended counting guidelines for planned gifts. The two my colleagues and I recommend are the CASE (Council for Advancement and Support of Education) gift-counting standards for counting outright gifts and the Partnership for Philanthropic Planning (PPP) gift-counting standards for counting future gifts.
They suggest you count gifts in one of 3 categories:
Category A—Outright Gifts: The total of outright gifts and pledges received, reported at face value.
Category B—Irrevocable Deferred Gifts: The total of irrevocable deferred commitments, which will be received at an undetermined time in the future, reported at face value.
Category C—Revocable Gifts: The total of revocable deferred commitments, which may be received at an undetermined time in the future, reported at the estimated current value.
This is an incredibly simple approach. Simple, but maybe not easy. Candidly, I have a tough time getting clients to implement this approach but the ones that do close the most planned gifts. Just sayin’.
- Make sure your finance understands and agrees with how you in the fundraising shop count planned gifts
- Educate all your gift officers on how planned gifts are counted.
- Honor and recognize your donor’s deferred gift commitment just like you would do with an outright gift.