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CASE Guidelines for Pledge Payments

  • 1.  CASE Guidelines for Pledge Payments

    Posted 08-26-2020 08:54 AM

    Good morning,

    I'm looking for some guidance from someone familiar with the inner workings of Rotary International.

    We are debating what is allowable under CASE guidelines for payment on a pledge. According to section 1.2.8, "An enforceable, countable pledge includes only those funds that will be given by that legal entity."

    We have a 2017 pledge that was made by a local Rotary Club. A major donor and board member of our organization also happens to be a member of this particular club. (He is a regular member and is not currently part of the club's leadership or list of officers.) He has written a few personal checks to our organization with the intent to pay towards the club's pledge.

    Given my understanding of how Rotary Clubs operate (, this donor should not have the ability to pay off the club's pledge. Instead, the club itself (at the direction of its governing body) should be paying the pledge. If our donor wishes to take responsibility for personally paying some of the club's pledge, he should pay the club directly and have it make the gift - correct? Are Rotarians considered an extension of the club itself?

    Matthew Bain
    Executive Director, Advancement Services
    Kennesaw State University

  • 2.  RE: CASE Guidelines for Pledge Payments

    Posted 08-26-2020 09:45 AM
    Matthew, the only legal prohibitions I know of regarding third-party pledge payments apply to donor-advised funds and private foundations.  Neither of those legal entity types can issue payments intended to satisfy a personal obligation.

    It is not a problem, therefore, for an individual to make a pledge-satisfying payment on behalf of another entity - individual or otherwise.  However, whenever I receive a third-party payment for a pledge, I confirm the acceptability of that transaction with the entity that made the legally binding pledge.

    One thing to be careful of here is to ensure that it was the Rotary Club that made the legally binding pledge, to begin with.  That pledge had to have come from the organization, and signed by an officer of the Club.  A Club member does not have the authority to bind the organization unless they have been authorized to do so.


    John H. Taylor
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987

  • 3.  RE: CASE Guidelines for Pledge Payments

    Posted 08-26-2020 11:35 AM
    Hi Matthew,

    The CASE language is saying "you can't count, in your pledge, money being pledged by a donor, that the donor is claiming will be fulfilled by a third party." That tells you what you can count at the time the pledge is made. However, when the pledge is being fulfilled, the CASE standards aren't applicable, as you've already counted those dollars.

    The question is whether you can see the 3rd-party payment as fulfillment of the pledger's promise to pay. So long as that payment isn't being made by a nonprofit and leading to the donor getting unduly enriched by a more than insubstantial benefit (as in the case of a DAF or PF making a payment) there's no problem with this, though you probably want to document everyone's intent and consent.

    Thank you,
    Isaac Shalev
    CRM Expert
    Sage70, Inc.
    (917) 859-0151

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