We all know older traditions sometimes live well beyond their proper lifetimes. This seems especially true regarding print and online forms.
One such form, which comes in numerous flavors, is the fundraising pledge form. I am guessing such forms first came about as part of the early existence of capital campaigns in the world of philanthropy.
The main purpose for the existence of a fundraising pledge form is to establish and reinforce the commitment to give at a certain level. Obviously, the need for such a form is just as high today as it was back at the turn of the 18th to the 19th century. (I fondly recall seeing a few of the early case statements and documents housed within the Joseph and Matthew Payton Philanthropic Studies Library Archives within the Lilly School of Philanthropy at IU.)
Besides slight changes to our languages, there have not been a large number of reasons to radically change or at least slightly update the traditional donation pledge form.
Now there just maybe such a reason…
Donor Advised Fund Giving Is Prompting Change
Simply stated, donor-advised fund charitable giving and the use of pledges do not mix. The donor who establishes a donor-advised fund does so for possible tax advantages. Gaining those tax advantages mean that they can now just recommend donations to be made, which are almost always done as outlined. However, the donor cannot legally obligate the fund, which is usually held by a financial institution or a community foundation. Here is an explanation from an accounting firm that explores the subject fully.
This alone should prompt changes in the use of pledge forms by any nonprofit. Since a larger percentage of total giving is going to be done with the use of donor-advised funds in each year going forward perhaps the time has come for your organization to move away from pledge cards.
Hopefully, there are other ways to outline or express intent to give rather than stating it in a pledge. Most boards now utilize a document, which states the expectations regarding attendance, volunteering, giving, etc.
Let’s hope this blog post can spur a discussion about best practices in this key area of philanthropy. Please share in the comment area how you and your organization plan on handling this. I personally think a healthy debate might benefit all of us!