Pledge Loss

The amount of money "raised" in each annual fund raising campaign consists mostly of gifts that are "pledged" by donors. These donors make a pledge to pay their contribution during the following calendar year. Occasionally, a donor is unable to fulfill that commitment. Reasons for not paying a pledge vary. Most often the reason is that donors leave employment with the companies where they are making their contributions through payroll deduction.

The percent of the campaign total that is projected to be uncollectible is calculated by averaging the pledge loss rate for the three most recent campaigns where all collections have been completed.  For example, the pledge loss rate of 5% for the 2013-2014 campaign was figured using the average actual pledge loss rate from the 2010, 2011, and 2012 campaigns.

If we collect pledges at a rate that is better than the pledge loss rate applied to a given campaign year, the money goes into a Rainy Day Fund. Similarly, if we collect pledges at a rate that is worse than the pledge loss rate applied to a given campaign year, the additional money we need to fund our partners comes from our Rainy Day Fund. The United Way of Muskingum, Perry & Morgan Counties maintains a Rainy Day Fund to provide stable funding during periods when campaign results are lower than expected. Low campaign results can be attributed to multiple factors. However, the most common reasons for a significant drop in campaign revenue are a decrease in the economic health of our region and large-scale disasters. During these times, the Rainy Day Fund can be utilized to help stabilize the funding that we provide to our community partners and agencies.

 

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