Pledge Management: When to Write Off a Pledge

policies & procedures Nov 18, 2022

Pledge management is not for the faint of heart. Especially when it comes to writing off pledges, because we know our donors had the best intentions when they committed the gift. Unfortunately, there comes a time when you have to get that pledge off your books. Any and all write offs need to be coordinated with Finance before the pledge is written off.

Let's define a pledge as a voluntary commitment to make a future gift of cash or personal property. In most cases, the pledge value is recognized as a receivable in the year the pledge is received. Development also "counts" the entire pledge in the fiscal year that the commitment is made. 

Setting Pledgers Up for Success

When a pledge is received, a few actions should immediately be taken:

  1. The pledge amount and details are recorded onto the donor's record in the database. 
  2. The payment schedule is built in the database (i.e. $1,000 annually every March). This is important because the payment schedule drives the pledge reminders.
  3. A scanned copy is uploaded into the donor's record for historical purposes.
  4. Pledge reminders are sent out at the appropriate time (before payment is due and after payment is missed).

With strong systems in place for these four steps, you will significantly cut down your pledge default rates. This is about helping your donors be successful when they make a pledge to your organization. It's your job to help them remember when pledge payments are due, and sending timely pledge reminders demonstrates that your record-keeping is solid.

The Pledge Reminder

A pledge reminder is a wonderful touchpoint to showcase your mission and the impact you've had on the world. If it is just an invoice, you're missing a great opportunity. Try to think of a pledge reminder as a stewardship communication, not a billing invoice. We don't want to conjure images of their credit card company; we want to be the best piece of mail they open on that particular day! And, it will encourage them to send in their pledge payment. Ask yourself these questions when preparing pledge reminders:

  • Does this reminder mention the impact the donor is making on the mission?
  • Does it thank the donor for their commitment?
  • Is there a mission-centered picture that generates those warm and fuzzies for the organization?

Pledge Management & Communication with the Donor

The communication cadence we recommend to our clients includes touchpoints with the donor every 30 days for a total of 180 days (see image below). If these touchpoints go unanswered by the donor, the organization should consider writing off the pledge. If the donor is responsive and wishes to reschedule their payments, that is great news. They are communicating with you! However, if you go through all the touchpoints below and you hear nothing, it is time to write off the pledge.


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