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Even as this evolution in campaign definitions tookplace, the actual structure of campaigns remainedstatic. Organizations continued to set a singlefinancial goal and to operate under the premise thatall gifts, no matter what kind or what character,could be counted and reported in a way that wouldbe recognized as equivalent to all other gifts. Thisparadigm has limited the ability to structurecampaigns in ways that will attract the largest gifts.It has circumscribed the capacity to explain in clearand transparent ways the various types of gifts thatmake up campaigns. It has also limited the ability tofocus on real results across the broad spectrum ofgift options. These guidelines recommend a newparadigm for structuring both annual and multi-yearcampaigns and for counting and reporting giftswithin those campaigns.A Note About TransparencyTransparency in reporting standards is a function ofaccuracy, completeness and clarity. These countingguidelines address all three dimensions.Second, these guidelines account for allcommitments made during the campaign period, notsimply those for which the donor received animmediate tax deduction. Bequest commitments andother deferred gifts, whether revocable orirrevocable, are all part of the goals of a completefundraising program, and should be reported. Thefact that they do not represent money “in hand” isunambiguously presented by the three-categoryreporting structure.Finally, the guidelines strive for clarity. Donors,boards of trustees, administrative staff, facultymembers and other constituencies often care littlefor the fine distinctions of the accounting profession.Reports of fundraising activity should reflect clearlythe activity that has transpired and its results. Byreporting three complementary but separatecategories, these guidelines emphasize that clarity.They speak the same language that donors usewhen they make their gifts, and that other groupsspeak when they issue reports.In the past, many organizations have reportedcampaign progress using complex formulae forderiving net present value of gifts and giftcommitments. Unfortunately, individuals andorganizations differ on the appropriate formulae touse, and the results rarely reflect the actual value ofa gift to an organization. The guidelines focus on thecharacter of the gift, placing commitments in threeeasily recognized and unambiguous categories. Bynot mixing these types of commitments, theguidelines accurately reflect the results of anorganization’s development activities. Organizationsthat choose to combine the three categories into asingle campaign total risk obscuring the real natureof the organization’s philanthropic support. Partnership for Philanthropic Planning, 2009—All rights reserved.7

not stem from any of the factors of counting andreporting, accounting or valuation, although a givenorganization may use any of these calculations asthe basis of its donor recognition policies.Definitions andDistinctionsCounting and Reporting: Counting and reportingare arithmetic activities. Counting is the numericsummary of activity, results and progress towardgoals. Reporting is the process of conveying to a layaudience clearly and transparently what hashappened during a specific timeframe.Accounting: Accounting is a process of keepingfinancial books based on a set of generally acceptedguidelines and principles, in order to present a fair,comparable and understandable picture of anorganization’s financial state at any given time.Valuation: Valuation is an assessment of the actualvalue of an item to the person or organization thatpossesses it. Value may be determined by anynumber of methods and may reflect net presentvalue, the future purchasing value, or even asubjective value based on non-financialconsiderations, such as the impact on marketing orthe ability of a specific gift to attract others in itswake. The Valuation Standards for CharitablePlanned Gifts define valuation as a reflection of thepresent value of the ultimate purchasing power ofthe gift.Crediting: Crediting is institution-specific andrepresents the way each organization grantsrecognition to its donors. It is up to each institutionto set its own standards and requirements fordocumenting commitments. For example, someorganizations require written confirmation of abequest provision while others rely solely on adonor’s verbal commitment. Such recognition need8Campaign: Our use of the term “campaign” simplyrecognizes that charitable organizations reportresults in definitive time segments. Mostorganizations report on an annual basis and,because all gifts that are committed that year arecounted, those organizations may be said to be in anannual “campaign.” Periodically, some organizationsplace a longer multi-year “campaign” umbrella overtheir fundraising activities and may report giftscommitted during this longer period. Throughout theguidelines, we use the term “reporting period” toencompass traditional multi-year campaigns andother time frames in which a nonprofit elects toreport fundraising activity. When charities elect toenter multi-year campaigns, they will, as they docurrently, prepare two complementary reports, oneof annual activity and one for the multi-year effort.Further clarification is on Page 6 of this report.Distinction Among Counting, Valuing andCrediting: Confusion of the terms and processesrelated to “counting,” “valuing” and “crediting” isvery common. In general:1. Counting provides a way in which all charitiescan record what they do, so that they can reporttheir activity and results clearly to the public,compare results and measure against clearlyarticulated and unambiguous goals.2. Counting provides a way to measure the intentof the donor, since most donors focus on thedollar amount of their commitment at the timethey decide to make it, and not on the net valueto the charity in an ultimate sense. All gifts,revocable and irrevocable, current and deferred,should therefore be counted.3. Counting complements valuation, which is aninstitution-specific calculation and measures thevalue to that organization of the total gifttransaction over time. These Guidelines forReporting and Counting Charitable Gifts arecompatible with the Valuation Standards forCharitable Planned Gifts and should be used ascomplementary tools. See list of suggestedreadings for this report.4. Counting commitments and reporting them areexternal processes, intended for public Partnership for Philanthropic Planning, 2009—All rights reserved.

information and comparison amongorganizations, while valuation is an internalprocess, based on the factors peculiar to eachorganization’s investment and financialexperience.5. Likewise, crediting a particular donor’s gift is aninternal process dependent on eachorganization’s history, mission and policies.RecommendationsCampaigns and other fundraising efforts would bebetter structured, clearer in their expectations,more transparent in their reporting and more trulycomparable among organizations if they begin withthree complementary goals:1. Category A: An outright goal for gifts thatare usable or will become usable for institutionalpurposes during the reporting period (whetherone or more years).2. Category B: An irrevocable deferred giftgoal for gifts committed during the reportingperiod but usable by the organization at somepoint after the end of the period.3. Category C: A revocable deferred giftgoal for gifts solicited and committed during thereporting period but in which the donor retainsthe right to change the commitment and/orbeneficiary.These three categories should guide both the goalscharitable organizations set at the beginning of theircampaigns, and the reporting of results during thecampaign period. In this way, organizations canmeasure results against aspirations, and canarticulate clearly and definitively that all three typesof gift commitments are crucial to achievingcharitable mission. By setting clear goals in each ofthese categories from the beginning of a campaign,organizations can move more directly toconversations with donors about potential gifts toeach of the three complementary goals. The “threetiered” ask becomes a natural part of the campaigneffort.Charities should report progress toward these goalsusing face value data. Because these guidelinesfocus on reporting and not valuation, the specifics ofeach gift, like the age of the donor or the payoutrate from a life income arrangement, are notrelevant factors. Charities should report thenumbers as a record of activity. So long as charitiesassociate the reported numbers with the comparable goal or category of activity, there should be noconfusion about the meaning of the data.By establishing three goals, confusion about countingwill diminish, staff and volunteers alike will have aclearer sense of their focus, and reports will notattempt to mix gifts that are intrinsically difficult tocombine into a single accurately reportable number.These guidelines specifically do not offer a methodology that purports to compare commitments fromdifferent categories that are inherently different incharacter. Categorical goals reflect, much betterthan a single goal, the true nature of campaigns andannual fundraising efforts as they currently exist.Charitable administrators should “count” towardtheir stated goal in each of the three categories onlynew commitments made during that reportingperiod. However, we recommend that charitiesreport all charitable receipts or changes incommitments that affect the financial state of thecharity, even when these are not counted towardcampaign goals. The sample reporting form (page22) provides a separate column for reportingcommitments that have changed in character duringa reporting period, like trusts or annuities that havematured or revocable commitments that havebecome irrevocable. For use in a campaign context,the sample reporting form also includes a columnfor reporting matured gifts that were committed andcounted toward the goals of a previous campaign.The breakdowns suggested in the sample reportingform are intended for internal reporting clarity. Werecommend that only the summary results in thethree major categories should be reported toexternal constituencies. Partnership for Philanthropic Planning, 2009—All rights reserved.9

their activities or creating layers of complexity thatlook to many like obfuscation. Such campaigns arelike the fruit seller who tells his auditors that he has100 pieces of fruit in his inventory. This may be true,but it says nothing about how many pieces are ripe(i.e., can be consumed today), how many need towait for some time until they are edible, how manymight spoil after a while if not used, or how manyhe will get tomorrow from the delivery cart—andcertainly it says nothing about the number ofindividual apples, oranges or bananas. Theseguidelines will enable charities to articulate clearlywhat resources are available in what timeframesand thus eliminate the increasing confusion thatclouds a uninumeric system of reporting.PracticalConsiderationsThese guidelines enable organizations tocount and report ALL gifts and commitments.These guidelines allow charitable organizations torecognize all the activity of staff, volunteers anddonors, not simply those measured by tax considerations. In particular, they measure progresstoward goals associated with revocable commitments, with gifts with uncertain outcomes likequalified retirement plans or insurance gifts and withgifts from intermediary organizations like donoradvised funds or supporting organizations, all ofwhich can easily be overlooked or even lost if IRSguidelines alone are used as the counting standard.A complete fundraising operation focuses on all ofthese gifts, as well as irrevocable outright anddeferred gifts. The only way to recognize andencourage such gifts is to set goals and reportprogress toward those goals. All gifts should be partof any campaign and all should, therefore, bereported. This is true whether the organization islooking at an annual fundraising plan or a multi-yearcampaign.These guidelines improve the ability to reportclearly the results of fundraising activity.These guidelines establish a method ofcomparability among nonprofits.Just as “value” is an internal process that may relyon factors that are unique to each nonprofit and istherefore non-comparable, “counting” is an externalprocess that should enable comparability acrossinstitutional lines. Using the IRS tax calculationformulae to ensure comparability takes into accountonly some fundraising activities and leaves out alarge segment of the fundraising results. A muchmore straightforward focus on reporting, makingsure that the results are categorized appropriately,achieves comparability by setting a structure andmultiple goals at the beginning of the process, so itis easy to see how many annuities were written, atwhat face value this year, as opposed to last, or asopposed to other organizations. It is important tounderstand that the guidelines stress comparabilityof results, not comparability of value. In countingand reporting charitable gifts, there should be noconfusion between gifts usable today, gifts guaranteed but postponed until a future date and gifts thatare of potentially great value down the road, butthat require continued stewardship. All theseactivities take time, resources and attention. Allshould be part of the reported activities andachievements of fundraising programs.One of the most difficult tasks for developmentoffices in recent years has been to report resultsclearly to boards, to others within the organizationand to the public. By trying to force all developmentactivity into a single number, fundraisers have faceda challenge of credibility by either oversimplifying10 Partnership for Philanthropic Planning, 2009—All rights reserved.

These guidelines acknowledge the perspectiveof the donor.While donors are clearly interested in the IRS valuefor tax purposes, most donors focus more on thedollar value of their gift at the time they make it thanon the ultimate net present value to the charity.There are exceptions, but most donors would notmake gifts if they did not intend the gifts to be ofvalue to the organization. All gifts, revocable andirrevocable, current and deferred, should, therefore,be reported.These guidelines aid charities in establishingpublic goals for fundraising, and provide themaximum opportunity for charities to offergiving options to donors.Many charities currently employ what has becomeknown as the “triple ask” in their regular interactionwith major donors. These guidelines offer a soundinstitutional foundation to present such a givingopportunity. By establishing three interlocking butseparate goals—for outright gifts, for deferredirrevocable gifts and for revocable gifts—the “tripleask” becomes part of the charity’s regular appeal.Donors are less likely to feel harassed by multipleappeals, and more likely to understand the ways inwhich these three methods of giving complementrather than compete with one another.These guidelines clarify that both valuationand crediting processes are related to, butseparate from counting.The Valuation Standards for Charitable Planned Giftsoffer one method for determining the futurepurchasing power that a planned gift will have whenit is received and used for its charitable purpose.Crediting is the way each organization recognizes itsdonors. Counting is an arithmetic activity—thenumeric summary of activity, results and progresstoward goals. Charities should be clear on whatmethodology they are using, and for what purpose.These guidelines reinforce the methodologythat many charities already use to count giftsand keep records of their activities.These guidelines build on the successful record ofcharities that already use these methods, althoughthey have generally been used only to articulate andmeasure personal or collective staff activity forinternal evaluation purposes. The Partnershipbelieves that charities will be more successful if theymeasure their activities and set public goals for bothannual and multi-year fundraising efforts using thesecategories.These guidelines will report a gift only once asa campaign commitment. Organizations maywish to report the maturation of commitmentscounted in a previous campaign, not as newgifts, but rather to articulate the total impactof the development effort on theorganization.We all recognize that gifts sometimes come to acharity through a series of steps: bequest intentionto matured distribution or charitable trust to trustmaturation, etc. The report of activity should reflecteach gift only once in a given campaign.Organizations will wish to note changes in giftcharacter within a campaign, but if a gift that iscommitted in one campaign acutally matures afterthe campaign has ended, the matured gift shouldnot be counted as a new gift in a new campaign.Our reporting worksheet allows charitiesdifferentiate in their reports between newcommitments and commitments from previouscampaigns that have changed in character (seepage 22). In this way, charities will convey all theinformation about the ways development activityaffects the financial state (both present and future)of the institution without appearing to count thesame gift twice.These guidelines are designed to focus on thecharacter of the commitment, NOT on the source ofthe commitment (individual, corporation, foundation,etc.) or on the purpose of the commitment (annualoperating costs, endowment, buildings renovation,program support, etc.). We recognize that mostcharities will also want to track these characteristicsof their gifts and commitments, as most do now. Partnership for Philanthropic Planning, 2009—All rights reserved.11

the campaign (see the sample reporting formon page 22). The value of canceled or unfulfilledpledges should be subtracted from campaigntotals when it is determined they will not berealized.Specific Countingand ReportingGuidelinesd. If a commitment recorded in Category C(revocable commitments) in a previouscampaign without a dollar figure

charitable organizations based on criteria that can be applied comparatively across the broad charitable community. Take into account the considerations of the donor. Focus on counting and reporting, not accounting, valuation or crediting. Recognize that the IRS charitable deduction calculations were not created for the purpose of