Soft credits: Gifts given by a spouse/partner, Donor Advised Funds, Family Foundations
In this article:
- Overview of soft credits
- Common uses of soft credits
- How do soft credits affect searches and reports?
Overview of soft credits
Soft credits allow you to appropriately track, acknowledge, and steward constituents who may not make a gift directly, but who have considerable influence over the decision to make a gift to your organization.
Soft credits are tracked in the Related Gifts section of the gift entry page.
Common uses of soft credits
1. A donor makes a gift to your organization through his or her Donor Advised Fund. The donor made the recommendation to send this donation, but the final decision and the distribution of the money is managed by the Donor Advised Fund. You’ll record the gift under the record of the Donor Advised Fund and then enter a soft credit to credit the donor. Note that IRS regulations prohibit a donor from fulfilling or reducing the balance of a pledge with a payment from a Donor Advised Fund.
For more background on this topic, please see this PDF regarding LGL's guidance on gift entry for DAF grants and also read the How to acknowledge gifts given through donor-advised funds post on our blog.
2. When a couple interacts with your organization together but for communication purposes you have a separate constituent record for the spouse/partner, it is important to code all gifts, no matter which member of the couple signed the check or made the credit card donation, to the constituent who is coded as the Primary contact. Also in this case, always ensure that the Spouse/Partner contact is soft credited for the gift.
3. A volunteer in your organization sits on the board of his family foundation. If the foundation makes a gift to your organization, you’ll record the gift under the foundation’s record and assign a soft credit to the volunteer.
In each of these examples, the soft credit is assigned to a person who was part of the decision to make the gift. Soft credits are not intended to track a person’s participation in the request for a gift. If a board member for your organization meets with a major donor to request a gift and that donor decides to donate, the board member should not be assigned a soft credit. Instead, you may assign the board member as the Steward of that constituent.
How do soft credits affect searches and reports?
Constituents with soft credits will be included in searches for constituents who have made a gift this fiscal year. Both the Donor Advised Fund and the constituent with a soft credit will appear in search results. If you do not want soft credits to appear in your search results, you can restrict your search by gift type to exclude soft credits.
A giving search, however, is reporting on gifts. By default, giving searches will not include soft credits unless you adjust the search parameters to include soft credits among the gift types you’re searching.
By default, gift searches and gift reports automatically restrict by Gift Type = Gift. Giving totals will not include soft credits, unless you adjust the gift type to include soft credits.
When you build a report, pay attention to the gift types you’re reporting on. If you want soft credits included in your report, you’ll need to customize your parameters to include them.