Pledge Agreement

A pledge agreement in fundraising is a formal commitment made by an individual or organization to donate a specified amount of money to a cause, project, or organization over a set period of time. This agreement outlines the donor's intention to contribute, the amount pledged, the payment schedule, and any terms and conditions related to the donation.

A pledge agreement sometimes is known as a gift agreement, that is a written commitment in which a donor or sponsor agrees to contribute a specific amount of money to a nonprofit organization, usually over a set period of time and under certain conditions.

Pledges are different from typical donations because they’re not immediate. A pledge agreement provides a helpful record of your donor’s pledge, ensuring that you and your donor have a clear understanding of the terms, dates, amounts, and any conditional requirements or obligations. 

While major donations are always cause for celebration, securing a pledge for ongoing support, especially for multiple years, is even better. Such commitments are essential for long-term nonprofit fundraising success, but to ensure that you and your donors are on the same page about expectations, you’ll need a pledge agreement. 

Pledge agreements are a win for both nonprofits and donors, providing mutual security and confidence, along with these other benefits: 

1. Clear commitments: Easily view what each donor has pledged so you can align future campaigns and fundraising efforts.

2. Demonstrable support: Being able to show that you have a number of pledges could help attract additional funding, donations, and support for your cause.

3. Predictable payment schedule: See the donation amounts and when they’ll be received, which allows you to better plan and budget for your nonprofit’s activities and programs.

4. Useful documentation: Provide your organization and your donors with a clear record of commitments that they can easily reference for tax season or other legal purposes.

For bigger charitable institutions that frequently handle hefty pledges from major donors or corporate sponsors, more formal, legal agreements may be made to protect both parties. However, for most nonprofits, an informal agreement will be sufficient.

Our Pledge Agreement template outlines what a simple and informal pledge agreement should contain and the steps for writing one. 

How to use this document?

To use this document effectively, follow these steps:

1. Provide the required information: Enter the names and addresses of the Donor and the Donee, ensuring that the information is accurate and up to date.

2. Understand the provisions: Familiarize yourself with the definitions and interpretations provided in the document to ensure a clear understanding of the terms used throughout the agreement.

3. Execute the Agreement: Sign and deliver the document promptly, ensuring that it is properly executed and delivered.

4. Comply with obligations and undertakings: Fulfill all obligations and undertakings outlined in the document, including the payment of expenses and the prompt payment of calls and payments due in respect of the security shares.

By following these steps and ensuring compliance with the terms of the document, you can effectively use the pledge agreement to establish a legally binding donation for the fundraising of your organisation.