Pledge with Non-Tax-Deductible Contributions

Sometimes you will have members who will make a pledge, however, they will want to pay all or some of their pledge with non-tax-deductible contributions. What is the best practice in this scenario?

Resolution

  1. Create a new fund for the Non-Tax Deductible Payment. If you already have a specific fund that correlates to this pledge, you may want to call it something similar (ex. 2019 Pledge Non-Tax). 
    • Navigate to "More > Contributions > Funds."
    • Click "Create New Fund" in the upper right corner.
  2. Group the "Pledge" Funds together, this will allow you to see the total of both the tax-deductible and non-tax-deductible fund, together, quickly when running reports! 
    • Navigate to "More > Contributions > Funds."
    • Click the drop-down arrow to the right of the "Create New Fund" button and select "Create New Folder."
    • Give the folder a name and click "Create Group."
    • You can now hover over the name of other funds (or groups) and drag them into the group.
  3. Update the Persons Pledge
    • Navigate to "More > Contributions > Pledge."
    • Select the campaign you'd like to edit a pledge in.
    • Click the pencil icon on the right of the pledge you'd like to modify.
    • Add this new Fund as an option to work the pledge down for this individual and click the "Update Pledge" button to save your changes. 

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Additional Information

How does this affect Giving Statements? You will want to make sure to include a non-tax deductible mail merge when Customizing Statements for those who gave this way. You can either do this for all statements or put these select people into a group and print their statements separately. They will more than likely want acknowledgment of their donation and including the Non-Tax Deductible Mail merge field can take care of this. 

 

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Comments

5 comments
  • The link in Resolution (1) to "create a new fund" article isn't working.

     

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  • Hey @peggy

    Thank you for letting us know about the link not working correctly. We just went in and fixed it, it should all be good to go now. 

     

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  • I created the new folder "Pledge 2021" and it appears at the very top of Funds. I want to group "Pledge 2021" and "Pledge 2021 non tax ded" in the new folder but I can't drag the folders to the top. They stop as soon as I get to to the last fund showing at the top of the page. It's like hitting a road block.

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  • Hey @contributions!

    If dragging and dropping isn't doing the trick (you may want to try it on a different browser and see if you have better luck), it's also possible to add the funds to a folder by editing the specific fund and selecting "More Options."

    A dropdown will appear with the different folders you can add it to. It will look like this:

    Hope that helps! If you've got more questions, feel free to contact us at support@breezechms.com and we can dig in further. 

    Thanks!

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  • Technically contributions from IRAs are tax-deductible.  It is not the church Treasurer's call.  Qualified Charitable Distributions from an IRA are excludable from income up to the lessor of the individual's Required Minimum Distribution or $100,000.  We don't know the member's Required Minimum Distribution.  We don't know if they have made contributions using this method to other organizations.  We cannot say these are non-deductible.  We should, however, indicate in notes that they came from an IRA and the name of the individual (not the family) that made the contribution.  IRA distributions that exceed the limits are included in income and are tax deductible.  Don't forget, there are age limitations as well.  People over age 70 1/2 are eligible even if they are not required to take IRA distributions.

     

    Grants from Donor Advised Funds ARE non-deductible.  These two tax provisions work differently.  Be sure you report them correctly.

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