The Resource Center received several questions about pledge fufillment this week. Here is some material we foun.
This is a difficult topic to
find good benchmarks on. AHP has done some work in the Health Care
world and AFP did do a survey which are referenced below. Most of the
material we’ve seen does reference rates in relation to capital campaigns as
you may have thought already.
There is an AHP study Charitable pledges down due to slow economy (This is
on Health Care) which also includes Canada
Most of the material speaks to pledge default rates and related material.
From AFP
Coverage
in Advancing Philanthropy(you may need to be logged in as a member)
There is a discussion on Michael
Rosen’s Blog
From other sources
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This is some material that
was shared with us by a member that they found elsewhere. I have no
direct source for this material.
II.
From Indiana University’s Center on Philanthropy:
“To
our knowledge, studies have not investigated the issue of pledge payment
fulfillment of
commitments
of longer than five years. CASE Management and Reporting Standards recommend
that a
campaign
be no more than seven years in length and that donors should fulfill their
pledges within a
period
of five years, though longer period commitments can be accepted. However, there
is no
statement
that this recommendation in any way correlates to the issue of lessened
likelihood of pledge
fulfillment
in the case of longer pledge commitment periods.”
III.
From the Association for Healthcare Philanthropy:
“We are
not aware of any studies or statistics on this issue. However, we generally
agree with your
hypothesis that the longer the
pledge period, the more likely someone will be to default on a pledge,
especially in times of economic
instability. Thus, the industry standard is that the pledge payment period
should not exceed five years.
In our experience, we have seen
very low default rates for well-solicited and documented capital
pledges. You may see a write off
percentage of 2-3%, but this is usually made up of smaller donors so
their overall percentage is
small. It is important to have good pledge collection procedures in place to
keep the uncollectibles to a
minimum. These procedures should include regular updates to donors on the
use of their funds (i.e. project
updates), pledge reminders notices, post campaign events, etc.
Intervention on pledges which
become delinquent is also important to making sure pledges are paid on
time. Most successful campaigns
do not meet their goal and "stop on a dime". Going over your goal by
2
percent or so would generally
take care of any uncollectible pledges. One area where we have seen a
problem with pledge collection is in campaigns which have a long
pledge payment history of 8-10 years
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A general reminder that
nothing we provide should be considered or should substitute for appropriate
legal advice.
