For nonprofits operating on a July - June fiscal year, late spring and early summer are a flurry of activity.
Fundraising leadership eagerly monitors the pipeline as they prepare for the board. Fundraisers fervently follow up with donors. Donors make verbal commitments and pledges as June 30 quickly approaches.
At the end of the day, the metric that leadership and fundraisers rely on most is "bookable gifts". In development shops around the country, the question of what can be considered "bookable" is top of mind in this sprint to the end of the fiscal year.
What's Considered a Bookable Gift in Fundraising?
In 1993, the Financial Accounting Standards Board (FASB) set firm guidelines, outlining precisely which gifts or pledges can be booked, or recorded. These guidelines, which you can find in Statement of Financial Accounting Standards No. 116, explain that nonprofit organizations can only book written pledges in their financial statements.
More recently, it's been determined that email correspondence does meet the written, or signed, requirement necessary in order to book a gift.
In addition to a written agreement, fundraisers also need to secure the following to officially book a gift:
The amount of the pledge
The due date of the gift, or a defined payment schedule
The gift designation, if there is one
What if I have a Verbal Agreement?
Unfortunately, FASB clearly states that verbal agreements do not meet the necessary criteria to be recorded in your organization's financial statements.
It's not uncommon for fundraisers to manage dozens, and entire organizations to have hundreds of outstanding verbal agreements. If you have verbal gift commitments that you're looking to quickly convert into written agreements, Givzey's Gift Agreement Platform is a standalone solution that empowers fundraisers to formalize agreements at scale.
What if the Pledge has conditions?
If a pledge or gift agreement contains a promise to give, but only contingent upon something happening in the future, FASB says that you have to consider if a gift is conditional or unconditional before it can be booked.
For example, matching gifts often fall into this category. If a donor agrees to give $10,000 if another group of donors also give $10,000, then this gift is considered conditional. Conditional gifts do not count as booked gifts until all conditions are met.
Unconditional gifts, however, are good to book, so long as an agreement is written, and contains the full gift amount, its due date, and any designation if the donor chooses.
If you're in a mad dash to convert verbal agreements into bookable gifts before the end of the fiscal year, Givzey can help. Use our 14-day free trial, which has no limits on the number of written agreements you can send to donors.