How do we track "soft credits"? We need to credit a donor when their family foundation writes the check.

Yes. The clean way to handle this is to separate who actually paid from who should receive fundraising recognition.

For your family-foundation example:

• Hard credit: the family foundation — because its check is the actual payment.
• Soft credit: the individual donor/family member — because they are the person you want to recognize for directing or influencing the gift.
• Gift amount: the full check amount for the soft credit, unless you intentionally want to split attribution.
• Financial reporting: count the money only once, under the foundation; soft credit should not increase revenue. Salesforce describes soft credits specifically as recognition of influence without making that person the actual donor.

For a recurring family-foundation relationship

If, for example, the Smith Family Foundation writes a $25,000 check and Jane Smith is the donor you're cultivating:

Smith Family Foundation — $25,000 hard credit Jane Smith — $25,000 soft credit Then your donor reports can show Jane's $25,000 in soft-credit giving, while your financial/gift reports still show only the foundation's $25,000 gift.

If this happens repeatedly, you ideally shouldn't have staff manually add the soft credit every time. In Salesforce NPSP, you can establish an Affiliation between Jane Smith and the Smith Family Foundation and configure the affiliation to generate an automated soft credit whenever the foundation makes a gift. Salesforce specifically documents this as a use case for family foundations.

That gives you a useful model:

Foundation → makes payment → hard credit Jane Smith → affiliated with foundation → soft credit

You can also have multiple family members receive soft credit if that's appropriate, although I'd establish a clear organizational policy so you don't inadvertently inflate your "soft-credit giving" metrics.

If you're asking specifically how to set this up in your CRM, tell me which CRM you're using (Salesforce NPSP, Salesforce Nonprofit Cloud, Blackbaud, Bloomerang, etc.), and I can give you the exact setup and reporting structure.

You track a soft credit by giving the Hard Credit (the legal financial transaction) to the family foundation, and the Soft Credit (the recognition and relationship credit) to the individual donor . This keeps your financial and tax reporting accurate while ensuring the person who influenced the gift gets proper recognition.

Steps to Track Soft Credits

If you share which CRM or database software you use (such as Salesforce, Raiser's Edge, or Little Green Light), I can give you the exact button clicks or steps to set this up in your system.

Yes. The clean way to handle this is to separate the legal donor from the person/family you want to recognize and steward.

For your example:

• Hard credit / gift record: the family foundation that actually writes the check.
• Soft credit: the individual or family associated with the foundation who influenced or directed the gift.
• Financial reporting: count the gift once, under the foundation. The soft credit should never increase revenue or giving totals.
• Stewardship reporting: let the individual/family's profile show the soft credit so you can see their broader philanthropic relationship with your organization. This is a common use of soft credits for family foundations.
• Acknowledgment: thank both appropriately, but don't treat the soft credit as a second charitable contribution or issue a second tax receipt. IRS substantiation rules apply to the actual contribution, and the donor of record should be the entity making the contribution.

Example

Suppose The Smith Family Foundation sends you a $25,000 check because Jane and John Smith decided to support your program.

Your CRM would ideally show:

The important rule is: $25,000 in revenue, not $75,000. Jane and John can each have the gift appear in their relationship history without it becoming another gift.

I'd also distinguish this from a pledge. If Jane says, "We'll give you $25,000 through our foundation," you can track the commitment/relationship separately, then when the foundation check arrives, record the actual gift against the foundation and connect the soft credit to Jane/John.

If you're designing the process for a CRM, I'd recommend having explicit fields for Gift Donor, Soft-Credit Donor(s), and Relationship/Role (e.g., Foundation Board Member, Family Member, Recommender). That makes reporting much cleaner than trying to make the family member the actual donor.

Tracking soft credits for family foundation checks requires a strategy that separates the legal/financial donor (the foundation) from the influencing/acknowledging donor (the individual family member). This ensures your organization remains audit-compliant while properly stewarding the person who made the gift happen.

Here is how to set up and manage this process effectively:

1. Define the Hard Credit vs. Soft Credit Roles
   • Hard Credit: Assigned strictly to the entity legally responsible for the funds and whose name is on the check—in this case, the Family Foundation . This is what goes into your official financial and audit reports ($5,000 from the Smith Family Foundation).
   • Soft Credit: Assigned to the individual(s) who directed, influenced, or recommended the grant—in this case, the Family Members (e.g., John and Mary Smith). The soft credit amount matches the gift ($5,000 soft-credited to John and Mary ), but it carries a $0 financial value in accounting reports to prevent double-counting.
2. Configure Your CRM/Database Architecture
   • Household/Relationship Linking: Connect the individual donor records to the Organization/Foundation record using relationship types (e.g., John Smith is "Director/Trustee" of the Smith Family Foundation).
   • Transaction Split/Attribution: Enter the donation with the foundation as the primary (hard credit) donor, then use your CRM's "Soft Credit" or "Tribute/Acknowledgment Attribution" feature to attach the individual family members to that exact transaction ID.
3. Establish an Acknowledgment Workflow
   • Legal Receipt (Foundation): Send a formal tax-compliant gift receipt/acknowledgment letter to the Family Foundation. Because they are a 501(c)(3) or legal entity, this receipt acknowledges the tax-deductible contribution (or non-deductible grant, depending on your structure).
   • Stewardship Note (Individuals): Send a personalized thank-you note or impact report to the family members who recommended the grant, acknowledging their leadership and support ("Thank you for directing the Smith Family Foundation grant to our campaign..."). Avoid using IRS-compliant tax-deductible receipt language for the soft-credited individuals, as the foundation already claimed the tax credit.
4. Run Split Reporting and Metrics
   • Financial Reports: Pull revenue reports using Hard Credits only to reconcile with your finance department and bank deposits.
   • Fundraising/Major Gift Reports: Pull donor lifetime value, campaign progress, and portfolio credit using a combined (Hard + Soft) metric, or isolate soft credits to see which board members or volunteers are successfully leveraging donor-advised funds (DAFs) and family foundations.

If you'd like, let me know:

• What CRM or database you are using (e.g., Salesforce, Raiser's Edge NXT, Bloomerang, HubSpot)
• Whether you also need advice on handling Donor-Advised Funds (DAFs) , which follow a similar but distinct rulebook

I can give you step-by-step configuration guidance for your specific system.

If you’re using Blackbaud/Raiser’s Edge, the cleanest approach is to treat this as one real gift + one soft credit, rather than entering two gifts.

For example:

• Hard credit: Family Foundation — $25,000
• Soft credit: Jane Smith — $25,000
• Relationship: Jane Smith is the person/family associated with the foundation and should receive recognition for the foundation’s giving.

That lets you answer two different questions without double-counting:

1. Who actually gave the money? → Family Foundation, $25,000.
2. Who should receive fundraising/relationship credit for that giving? → Jane Smith, $25,000 soft credit.

Blackbaud specifically describes soft credits as a way to recognize a constituent for a gift made by a spouse or foundation, without creating a duplicate gift record.

How I'd structure the policy

I would establish a rule along these lines:

When a donor's family foundation, trust, LLC, or other related entity makes the actual payment, record the payment against the entity that legally made the gift and soft-credit the associated individual(s) who should receive recognition for the giving. The important part is not to book the same $25,000 as a hard gift to both the foundation and the individual. Soft credit is specifically designed to avoid that duplicate-gift problem.

One important reporting decision

Decide whether your fundraising reports are measuring actual dollars received or relationship credit.

For revenue reports, use hard-credit donor so $25,000 remains $25,000.

For a portfolio manager's view of Jane Smith's overall philanthropic relationship, include her soft credits, so the $25,000 appears in her giving/recognition history.

Be careful with reports that include both hard and soft credits: if you give Jane full $25,000 soft credit while also showing the foundation's $25,000 hard gift, the report can appear to show $50,000 even though only $25,000 was actually received. Blackbaud explicitly warns about this inflation.

If you're trying to design the actual CRM workflow/data fields for your organization (including how to handle spouses, family foundations, DAFs, and multiple family members), I can lay out a simple policy that your gift-processing and development teams can follow consistently.

Soft credits are usually tracked by keeping the legal donor of record separate from the relationship donor you want to recognize. For a family foundation gift, the foundation gets the hard credit and the individual(s) connected to the foundation receive soft credit. Soft credits should not create a second gift or affect tax receipts; they are for stewardship, reporting, and relationship management.

A typical setup:

In your CRM, the workflow is generally:

1. Enter the gift under the foundation’s record

   • Donor/entity: Smith Family Foundation
   • Amount: $50,000
   • Gift date, fund, campaign, restrictions, etc.

2. Add a soft credit relationship

   • Link Jane Smith to the gift
   • Soft credit amount: $50,000
   • Relationship/reason code (examples):
     • Foundation decision maker
     • Founder/family member
     • Influencer
     • Related donor

3. Report separately

   • Revenue reports: count the foundation’s hard credit only.
   • Relationship/fundraising reports: include Jane’s soft credits so her lifetime engagement reflects the gifts she helped direct. Many advancement systems use this same distinction for gifts from foundations, donor-advised funds, companies, and similar entities.

A few policies to decide internally:

• Who receives soft credit? The person who controls or influences the foundation’s giving (not automatically every family member).
• Can multiple people receive soft credit? Some organizations allow it; if so, define whether each receives 100% soft credit or whether you split attribution. (Some reporting standards caution against double-counting soft credits.)
• Recognition name: Decide whether acknowledgments recognize the foundation, the family, or both.
• Campaign credit: Decide whether campaign totals show hard credit only or include soft credit attribution.

If you tell me which CRM you use (Salesforce NPSP, Blackbaud/Raiser's Edge, Bloomerang, Neon, etc.), I can map this to the exact fields and reports.

To track a family foundation gift properly, you must hard credit the family foundation (the legal entity that wrote the check and requires the official tax receipt) and soft credit the individual family member(s) who directed or influenced the grant . This ensures your financial audits remain accurate while your CRM properly reflects the individual's cumulative lifetime giving and engagement.

Step-by-Step Data Entry Workflow

1. Create/Verify Accounts: Ensure you have separate constituent records: one for the Family Foundation (set up as an organization/account) and one for the Individual Donor.
2. Establish a Relationship: Link the individual to the foundation using a reciprocal relationship type in your CRM (e.g., Individual is Director/Trustee of Foundation).
3. Record the Hard Credit: Enter the donation transaction directly on the Family Foundation’s record , attaching the check amount, date, and fund designation.
4. Issue the Tax Receipt: Generate and send the official charitable tax receipt to the Family Foundation at their official address.
5. Apply the Soft Credit: On that same transaction, add a Soft Credit pointing to the Individual family member's record for the full gift amount (or split it if multiple family members share credit).
6. Send Stewardship Communications: Send a personalized, warm thank-you or impact update directly to the individual family member, making sure it explicitly avoids official tax-deductible language since the legal receipt went to the foundation.

Platform-Specific Tracking Guidance

If you share which CRM or database you are currently using, I can give you the exact navigation clicks or field settings required to set this up.

Tracking soft credits for foundation or corporate checks linked to a donor involves setting up a clear attribution model in your CRM or accounting system so that both the legal entity (the foundation) and the individual (the donor) receive proper recognition without double-counting revenue.

Here is how to properly set up and track this workflow:

• Hard Credit vs. Soft Credit Distinction
  • Hard Credit: Assigned to the entity that legally owns the funds and writes the check (the Family Foundation). This transaction counts toward your organization's actual financial revenue and auditing reports.
  • Soft Credit: Assigned to the individual(s) who influenced or directed the gift (the Family Members/Board of the foundation). This does not increase the financial revenue total (it stays at $0 for the individual), but it tracks cumulative lifetime giving and engagement for the person.
• Step-by-Step Tracking Process
  1. Record the Gift to the Foundation: Enter the donation with the Family Foundation as the primary account/contact. Assign the Hard Credit and the full gift amount (e.g., $10,000) to the foundation's record.
  2. Create the Soft Credit Link: In your CRM, use the "Soft Credit" or "Matching/Tribute/Influence" feature to link the transaction to the individual family members. Allocate the matching soft credit amount (e.g., $10,000) to their individual profiles.
  3. Tag the Relationship: Ensure the individual profiles have an official relationship link to the foundation (e.g., "Director," "Trustee," or "Founder") so future reports can easily pull data showing family foundation involvement.
  4. Segment Acknowledgment and Receipts:
     • Send a formal tax receipt/letter to the Family Foundation acknowledging receipt of the tax-deductible contribution (since they are the legal donor).
     • Send a stewardship/thank-you note (not a tax receipt) to the individual family members acknowledging their leadership and directing the gift.
• Reporting and Best Practices
  • Revenue Reports: Always run financial and audit reports using Hard Credits only to prevent inflating your actual cash totals.
  • Constituent Reports: Run major donor lists, board reports, or campaign tracking using a combined metric (Hard Credit + Soft Credit) to ensure philanthropic influence is properly recognized.

If you'd like, let me know:

• What CRM or database you are currently using (e.g., Salesforce, Raiser's Edge, HubSpot)
• Whether you need a specific step-by-step workflow for that platform

I can give you the exact fields to click and set up.

Yes. The cleanest approach is to separate the legal/financial donor from the relationship you want to recognize.

For a family foundation gift:

• Hard credit: the family foundation — because that is the entity actually writing the check.
• Soft credit: the individual/family member(s) who directed, recommended, or influenced the gift.
• Gift amount: record the full amount once, on the foundation's gift record. Do not add the soft credit to revenue or count it as a second gift.
• Stewardship: the individual gets the soft-credit history so your fundraisers can see that, for example, Jane Smith has effectively generated $50,000 through the Smith Family Foundation.
• Acknowledgment: the tax acknowledgment should go to the legal donor—the foundation—not the individual merely receiving soft credit. IRS substantiation rules focus on the actual contribution and its donor.

This is also how common nonprofit CRM systems conceptualize soft credits: Salesforce NPSP, for example, explicitly supports soft-crediting individuals for organizational gifts and gives "affiliation" and "primary contact" soft-credit scenarios.

Example

Suppose:

Smith Family Foundation sends you a $25,000 check, and John Smith is the family member who decided the foundation should make the gift.

I'd record:

John's donor profile can therefore show $25,000 soft-credit giving, while your financial/revenue reporting shows $25,000 from the Smith Family Foundation.

One important distinction: I'd label the soft credit something like "Family Foundation / Influencer" or "Foundation Principal", rather than simply "Donor." That prevents staff from confusing relationship credit with legal donor of record.

If you're using Salesforce NPSP, there is a particularly clean way to implement this using the foundation as the organization on the gift and an Opportunity Contact Role/affiliation to give the family member the soft credit.

Tracking family foundation gifts (much like Donor-Advised Funds or DAFs) requires separating financial compliance from donor stewardship . The golden rule is: Hard credit belongs to the legal entity that signs the check, and soft credit recognizes the individual(s) who directed or influenced the gift .

A step-by-step framework for processing and tracking these contributions correctly in your CRM/database ensures clean financial reports and accurate relationship management.

1. The Core Setup (Hard vs. Soft Credit)

• Hard Credit (The Foundation): Create or assign the transaction/opportunity to the Family Foundation’s Account as the primary donor. This ensures your finance department and audit trails match the legal check issuer. This entity receives the official tax/acknowledgment receipt (if applicable).
• Soft Credit (The Family Member): Attach a soft credit on that same gift transaction to the individual family member (e.g., Jane Smith) who recommended or authorized the foundation grant.

2. Step-by-Step Entry Process

3. Create the Gift/Donation Record: Enter the payment, amount, and date. Set the Organization/Account name to the [Name] Family Foundation.

4. Issue the Tax Receipt to the Foundation: Generate the official gift acknowledgment/tax receipt addressed to the foundation itself, keeping legal and IRS compliance strict.

5. Apply the Soft Credit: Navigate to the "Soft Credits," "Attributions," or "Contact Roles" section of the gift entry. Select the individual family member, assign a role (such as Influencer, Grant Recommender , or Soft Credit ), and attribute 100% (or a split percentage if multiple family members advise) of the gift amount.

6. Log a Personal Stewardship Note: Use the interaction/notes section on the individual’s profile to log a personal thank-you or update tailored to them, even though the formal receipt went to the foundation.

7. CRM-Specific Tips

• Salesforce (NPSP / Fundraising): Use Salesforce NPSP Soft Credits Overview to log the opportunity against the organization account, then use the Manage Soft Credits or Opportunity Contact Roles feature to assign the individual.
• Other CRMs (Bloomerang, Little Green Light, Virtuous, DonorSnap): Most modern platforms have a dedicated "Soft Credit" or "Tribute/Attribution" sub-tab on the donation screen. Ensure you link the individual contact directly to the transaction line item rather than just writing their name in the memo.

4. Reporting & Recognition Best Practices

• Excluding/Including in Reports: When running hard-dollar revenue reports, filter out soft-credited amounts to avoid double-counting income.
• Honor Rolls & Annual Reports: Decide your policy ahead of time. Do you list the Family Foundation or the Individual in your annual report? Many organizations list the Foundation name (e.g., "The Smith Family Foundation") or combine them (e.g., "Jane and John Smith via the Smith Family Foundation") depending on donor preference and cumulative giving tracking.

If you share which CRM your organization uses (e.g., Salesforce, Bloomerang, Raiser's Edge), I can provide the exact navigation steps or configuration settings to set this up.