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When & How to Steward Funds in Payment Status

By Jan McGuire

So here’s a scenario for you: a new donor commits to a 5-year pledge to establish a new endowment for your organization. When does your Donor Relations department begin to steward that fund? Right away? When you get around to it? When the pledge is fulfilled?

If you’re waiting until the pledge is paid in full and the endowment is distributing earnings, you’re late to the party! And beyond fashionably late at that.

So when should stewardship start? With the first pledge payment. If that payment has been invested long enough to show gains (or yikes, even losses!) the donor should receive an endowment report. This is a wonderful way to start off on the right foot with your donor, and the benefits of doing this are 10-fold. It solidifies with the donor that your organization values their gift, assures the donor that their gift was directed correctly, sets the standard for what they can expect to receive from you each year, and helps to strengthen their overall connection with your organization. If nothing else, you should view the report as a cultivation tool for the next pledge payment. And the next. And the next.

Has the donor made a bridge gift to the spendable account for immediate use? If so, show impact. If the donor makes a separate gift in order for their scholarship to be awarded while the endowment builds, send them a scholarship impact report. Or at the very least, be sure they know who has benefited from their gift. The student’s directory information – and even better, a photo if the student agrees to submit one – brings the impact of the gift to life and makes pledge fulfillment all the more likely. It’s also evidence to the donor that their gift is being used and being used per their intent. Just make sure that last part is correct – it’s also never too early to focus on compliance with new funds!

On another note, it’s very important to remind your gift officers that donors with endowment funds in pledge status will receive reports. Circulate a list of donors with funds in pledge status before the reports drop. You can go the extra step of flagging accounts with losses or donors who will receive a report for the first time. Share the endowment performance information and other key data with your gift officers. Have your investment professionals provide statements or commentary for gift officers to use as needed in conversation. After all, donors who have questions about the report will likely contact their gift officers first. Providing gift officers with information and details up front helps prevent them from being caught off guard.

So why wait? Start reporting on funds in payment in status if you haven’t already. When you help strengthen a donor’s relationship with your organization right from the start, everyone wins!

This post was written by DRG Group member, Jan McGuire.


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