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Revenue Recognition for Sponsorship with Benefits

  • 1.  Revenue Recognition for Sponsorship with Benefits

    Posted 11-06-2019 09:46 AM
    Hello all,
    Looking for anyone who would be willing to discuss revenue recognition for sponsorships (really, all gifts) with benefits (we are a Banner school). Our receipting is properly picking up and disclosing the benefit received, but I'd love to find someone to discuss the flow to finance, and how/where you break out the benefit amount for Finance.  Please feel free to contact me directly if you'd like.

    Thanks all!

    Joan Walker, CPA, CIA
    University Advancement
    Senior Director of Compliance and Gift Processing

    Joan Walker, CPA, CIA
    University Advancement
    Senior Director of Compliance and Gift Processing

  • 2.  RE: Revenue Recognition for Sponsorship with Benefits

    Posted 11-06-2019 10:05 AM
    Joan, how do you do this for standard quid pro quo gifts?  Sponsorship payment should be handled the same way.

    Much is going to depend on your GL feed.  Some institutions drop both the charitable gift and benefit amounts into the same fund, but feed them with different identifiers to differentiate between the two.  Other organizations feed the non-gift amount to a different fund.  But the net is that QPQ and sponsorship payments (with benefits) tend to follow the same flow.


    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: Revenue Recognition for Sponsorship with Benefits

    Posted 11-06-2019 10:27 AM

    I've seen this done a number of ways.


    The more automated way is that the feed from the Advancement system to the general ledger creates two transactions for the one donor gift, transmitting the charitable portion to a gift account/object and the non-charitable portion to a different account/object code.  As John said, the non-charitable portion of the gift might be fed to a different "object code" or "natural" in the same account, or fed to a different non-gift account altogether.  The transaction wasn't necessarily split on the Advancement side; if the Advancement recording is the full amount as the "gift amount" and there are benefit/premium codes/amounts associated with the gift-system transaction, the gift feed can be written to adjust the amount of the gift portion and create a separate transaction for the benefit/non-deductible amount.


    The less automated way was that the entire amount was transmitted to the gift account/object, and then a later report was run to adjust money from the gift account/object to a different account/object using a journal entry.  Sometimes that report created a batch to make the actual adjustment journal entry transactions directly, but alternatively the report was used in the Finance office to manually enter adjustment journal entries.  From an accounting point of view, whether the separation of the two parts of the transaction happened at the time that the gift was transmitted to the general ledger or happened at a designated later time (monthly, or even at the end of the fiscal year) wasn't considered material.  Generally, there would be one cumulative journal entry for every gift fund that included such transactions (so, possibly, one cumulative journal transaction for all gifts to the corporate partners program, or one cumulative journal transaction for each fund-raising event), so it wasn't a heavy lift for the Finance office.  It worked pretty well, even if having it all happen automatically during the initial transmittal is more satisfying/elegant!


    My US$0.02 worth; the usual disclaimers apply.


    Good luck!




    Alan S. Hejnal   

    Data Quality Manager

    Smithsonian Institution - Office of Advancement

    600 Maryland Ave SW Ste 600E

    PO Box 37012, MRC 527

    Washington, DC 20013-7012

    Voice: 202-633-8754 | Email:                                                                                                                                            




  • 4.  RE: Revenue Recognition for Sponsorship with Benefits

    Posted 11-06-2019 10:46 AM

    Hi Joan,


    We break a sponsorship out into the two "accounts" basically, for the benefit of the accountants. For instance, A $5,000 sponsorship might break down like this: $4,000 credited to "2019 Gala" and $1,000 credited to "2019 Gala Fundraising" where the fundraising designation is the value of the deliverables.


    I don't know if that's the best way to do it, but it's what's been done in Banner for many years since before I arrived.



    Bill Wong
    Manager of Giving Operations
    Savannah College of Art and Design ®

    office: 404.253.6081 /

    SCAD40: Forty Creative Years

    SCAD: The University for Creative Careers ®
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  • 5.  RE: Revenue Recognition for Sponsorship with Benefits

    Posted 11-08-2019 07:33 AM
    Thanks so much for all the information ; we are currently doing a deep dive into all of our feed/routing with our finance and treasury, so this is very helpful!
    Last question,  why type of revenue do you all code the "benefits" part as? It's still money in the door that needs to be recognized--- misc rev? Or do you leave it up to fin/treasury to classify?

  • 6.  RE: Revenue Recognition for Sponsorship with Benefits

    Posted 11-08-2019 08:03 AM
    This is normally a call made by the Business Office.  Usually, it is miscellaneous revenue/income.  However, depending on the benefit and value it could be treated as merchandise sales.  I have seen other income coding as well.

    Ask your CFO!


    John Taylor

    Big ideas; small keyboard