Though the terms pledges & recurring donations are often used with the same meaning, they are not always the same. There are a high lot of of-offences. Collection of the regular income from both can comply with the different critters. A pledge usually refers to the promise of payment at a specified amount which can come with the set period of time. Pledges can prove to be “conditional”, where the payment comes with the met or “unconditional” as well as can never come with the strings attached. donation pledges are a great one to go with.
The idea about the recurring donation
A recurring donation can usually come in the form of the series of gifts which are often taken repeatedly with the support of the open-ended schedule as well as do not ever come with the specific commitment. Here the arrangement can be put to an end at any time as well as in the form of an indefinite solution. There are however differences set up in the form of accounting, use cases, as well as the back-end processing as well as plenty of other factors.
Treatment of the bookkeeping
Pledges, as well as the recurring donations, are usually taken in a sense quite differently. The later count as the revenue which can be always received, in the form of the cash donations. On the other hand, when it comes to the unconditional pledges, the total pledged amount can be usually counted as revenue exactly on the date when it gets pledged. There are also other Conditional pledges, which can be regarded in the form of the revenue when the pledge conditions are met. The pledge can be in the form of a debt that is owned by the donor; which usually comes with the advantage of projected cash flow, pledged into the budget. There are also some involvement of the calculations when it comes to the revenue projections and is related to estimated write-offs, which comes in the form of the amortized discount. On the other hand, there are also other Recurring donations which usually are free from any kind of accounting burdens.
Fundraisers usually like pledge campaigns which can come with a promise of guaranteed revenue. The summary can be seen in the form that one needs to Know the donors; decide the right approach which best fits the profile of the potent donors as well as can help with the objective of the management of the donor relationships.