Managing Donations With Multiple Entities In Salesforce | Ask An Expert

I love helping organizations raise money.

Charitable giving has substantially increased over the years. The latest report from Giving USA highlighted that giving has increased year-over-year (with a few exceptions) since 1977. Similarly, the ways in which people give have also proliferated.

One of the most notable vehicles is a gift from donors made through third-party organizations (e.g. donor-advised funds, fiscal agency, family foundation) to any IRS-qualified charity. Although it only accounts for 10% of all U.S. charitable giving, it is still the fastest-growing form of philanthropy today.

“A DONOR-ADVISED FUND, or DAF, is a giving vehicle established at a public charity. It allows donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time.  Donors can contribute to the fund as frequently as they like, and then recommend grants to their favorite charities whenever makes sense for them.” – National Philanthropic Trust

Nonprofits clients frequently come to us for advice on how to record or handle this type of scenario using the Non-Profit Success Pack (NPSP). Especially, it can be tricky to determine how to record these donations in NPSP when there are two or more entities involved.

Given that there is not a standard way of recording these types of donations, a common pitfall that I have seen is organizations hard crediting the gift to the individual donor with a reference/comment/note that it was made through an external organization. While this might seem like the simplest way to record this donation, it doesn’t give credit to the other entities involved in this transaction. In addition, this will make filtering or grouping by the third parties in reporting challenges.

In general, the following questions should serve as the guiding light when recording the donations involving multiple entities:

1. Who made the donation?
2. Who is the entity issuing or sending a check and if it has any decision-making authority regarding the donation?
3. Who should get credit for the donation and what type of credit?

The following are the three most common scenarios and best practices to systemize and remove the ambiguity of the process.

Scenario #1: An individual uses an external firm to manage their charitable giving.

• John (advising donor) uses a fiscal agency to manage its charitable contributions. John decides to send $1,000 to a non-profit organization of his choice from its donor-advised account managed by Fidelity Charitable (fiscal agency).

Suggested Set-Up:

• The non-profit organization should hard credit the third-party organization and give full soft credit to the donor. This is the appropriate way of handling this scenario because the donation received by the non-profit organization was legally made by the fiscal agent, not the advising donor.

             *User Tip: NPSP uses Opportunity Contact Roles (OCR) to assign a role to a Contact on a particular Opportunity (donation). It comes out of the box with predefined roles (Donor, Decision Maker, Soft Credit, etc.) but you can create as many as you want. It also allows you to set an OCR to automatically receive soft credit. This means that any contact assigned to that OCR will receive a soft credit. For example, in this scenario, you might want to create a Contact Role called “Fund Advisor” and assigned it to the advising donor to receive soft credit for the donation.

Scenario #2: When companies use another organization to manage their giving programs.

• A non-profit organization might need to give a soft credit to an organization (Plative) that uses a bank or external firm (Fidelity Charitable) to manage its corporate philanthropy. Let’s say that Plative wants to give a $10,000 grant to a non-profit organization from its donor-advised account.

Suggested Set-Up:

• Fidelity Charitable sends a check to the non-profit organization. Even though the actual funds are coming from Plative, the check is written by Fidelity Charitable, so the non-profit organization should hard credit Fidelity Charitable and give full soft credit to Plative. Now, you might be asking yourself, how do I soft credit an account instead of a Contact using NPSP? Don’t fret! NPSP also gives the user the ability to assign soft credits to an Account for donations that it didn’t actually make, but somehow influenced.

For more information on creating Account Soft Credits, see Create Account Soft Credits.

Scenario #3: Third-party organization sends a single check for multiple donations including employer and individual donations.

• Now, let’s say that two employees from Plative indicate that each wants to donate $500 dollars to a non-profit organization via Plative’s matching gift program. Plative will match those donations and uses an external firm, ADP, to manage this process. Therefore, ADP will send a check to the non-profit organization in the amount of $2,000 dollars. This includes the $1,000 dollars given by the employees and the $1,000 dollars matched by Plative.

Suggested Set-Up:

• Given that ADP is the one who wrote the check, the non-profit organization should hard credit the $2,000 dollars donation on the ADP account record.
• In addition, the non-profit organization should add partial soft credits to both employees who had $500 dollars deducted from their paychecks. Partial soft credits in NPSP allow the amount to be less than the total amount of the donation.
• Plative should get Account soft credits for their $1,000 match.

One last consideration for non-profits processing donations with different soft credit roles is to leverage a recently released NPSP featured, Customizable Roll-ups (CRU). Frequently, I am asked by clients if it is possible to filter or summarize soft credits for specific roles. In this instance, users can create separate fields at the Contact level for each role (e.g. fund advisor, solicitor, fundraiser) and use filtering groups within CRU to roll up soft credits to each of these fields, respectively. This allows organizations to obtain detailed insight into donor giving to craft more effective outreach strategies with all types of donors.

            * Pro Tip: likewise, to Contacts, NPSP now gives users the ability to rollup Account Soft Credits to specific Accounts using Customizable Roll-ups.

If you want to learn more about how to leverage NPSP, optimize your Salesforce environment, or hear more about our client success stories, don’t hesitate to contact us!