Pledge: a commitment to give, tracked against what actually arrives

What is a pledge?

A pledge is a donor's commitment to give in the future rather than an immediate gift. It might be a promise to contribute a total sum over several years, or to pay in scheduled instalments, and it gives an organisation a basis for planning against income it expects to receive.

The essence of a pledge is that it is a commitment, not yet a completed gift. The intention is recorded and relied upon, but the money arrives later, which introduces a gap between what has been promised and what has actually been received.

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How is a pledge different from a restricted fund?

The two describe different attributes of a gift and are easily confused. A pledge is about timing, a commitment to give later, perhaps in stages. A restricted fund is about purpose, money the donor requires be used only for a specified use.

The distinctions are independent, and a single gift can involve both. A donor might pledge a sum over three years (timing) and restrict it to a particular program (purpose). Keeping the two concepts separate is what lets an organisation track when money is due and what it may be spent on without conflating the two.

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Why do pledges need careful tracking?

Because a pledge is expected income that has not yet arrived, and not every pledge is ultimately fulfilled. An organisation that treats pledged sums as though they were already in hand risks planning around money that may never materialise.

This makes tracking pledged versus received amounts essential. An organisation needs to know at any moment how much of what was promised has actually come in, which commitments are on schedule, and which are overdue and need following up, rather than assuming a pledge equals a payment.

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Tracking pledges in a platform

A grant management software platform records each pledge with its amount, schedule and any purpose attached, and tracks payments received against it over time, so an organisation always sees expected income clearly and can follow up on outstanding commitments before they slip.