Pledges

A pledge is a contract between a donor and the Foundation to make future contributions over a specified period of time with a documented payment plan.

Centralized preparation of pledge reminders ensures that donors are aware of upcoming pledge payments and that all pledge payments, write downs, write offs, and schedule changes are properly recorded and documented. This process also standardizes review of past due pledges for audit and accounting purposes.

Definitions: 

Annual Pledge - Verbal or written commitment to pay the entire pledged amount during the same fiscal year.

Bequest - Provisions in a will, trust, or other testamentary legal document providing a gift to charity pursuant to applicable state law. Can be restricted or unrestricted by the donor.

Bequest Pledge - A written commitment providing a gift to charity that is included in a will, trust, or other testamentary legal document. Typically, these may be revoked before the donor’s death unless accompanied by a legally enforceable contract.

Planned Gift - Also known as a deferred gift. Refers to the process of making a charitable gift of estate assets to one or more nonprofit organizations; a donation that requires consideration and planning in light of the donor’s overall estate plan; or part of an individual’s major gift strategy, generally involving a bequest or trust. There are a number of different types of planned gifts including annuities, trusts, and life insurance.

Pledge - A pledge is a promise to make future contributions to an organization over a specified period of time with a documented payment schedule.

I. Annual Pledges

An annual pledge is a verbal or written commitment to pay the entire pledged amount during the same fiscal year.

The Office of Annual and Leadership Giving secures annual or single-installment pledges through a variety of mechanisms, including phone-a-thons, email marketing, and traditional mail efforts. Annual Giving sends the pledge acknowledgement and gift form to the donor, informs Philanthropy Operations of the pledge, and sends pledge reminders as needed. After the close of the fiscal year on June 30, Annual Giving receives a list of unfulfilled pledges from the preceding fiscal year and forwards the information to the relevant school. The school determines whether they want to cancel it immediately or attempt to contact the donor to collect the funds.

Unfulfilled annual pledges are written off in October of the following fiscal year.

II. Multi-Year Pledges

A multi-year pledge is paid over two or more fiscal years. The Office of Gift Administration records all multi-year pledges, whether designated to the UMBF, USMF, Common Trust, Trustees of the Endowment, Medical Alumni Association (MAA), or the University. Multi-year pledge agreements must be in writing, identify the purpose and/or fund designation, outline the payment schedule, and be signed by the donor.

Each month, a member of the Gift Administration staff reviews pledges with upcoming due dates and those that are past due. Staff generates past-due reminders for pledges (30, 60, 90, and 120 days overdue) after confirming that all payments, write-downs for payments from donor-advised funds and family foundations, and pledge schedules are correct. Staff confers with the Schools before sending the reminder and logging a contact report in Advance.

In the last quarter of the year, Gift Administration staff prepares year-end pledge reminder letters. These letters serve as final reminders during the current calendar year for donors with past-due pledges who have not submitted pledge payments during this current calendar year.

III. Booking Pledge Payments

As pledge payments are received, they are entered in the Advance database as a pledge payment against the open pledge and recorded as revenue in the UMBF general ledger as part of the daily positing of gifts.

IV. Pledge Review and Write-off Policies/Procedures

Annually, the external audit team reviews outstanding pledges to confirm best practice procedures are in place to document exceptions to pledge agreements. It is the responsibility of the Chief Development Officer (CDO) of each UMB school/unit to ensure that these policies and procedures are familiar to staff and followed.

Pledges that are not collectible should be written off in a timely manner. Unfulfilled annual pledges are typically written off in October of the following fiscal year. Multi-year pledges require some payment in a 24-month period or written documentation in order to remain active.

Writing off outstanding multi-year pledges requires written notification. The notification may be from the donor or the CDO of the school/unit explaining the reason for the write-off (e.g., new commitments to another program, ill health, changes to financial situation, etc.). The CDO may designate another development officer or appropriate staff member to oversee this responsibility.

Pledge write-off requests of $10,000 or more must be reviewed and approved by UMBF Treasurer/CFO or the UMBF President/CEO. Pledge write-offs of $50,000 or more must be reviewed and approved by the UMBF Audit Committees.