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Recording Donations that are collected from our donors by our primary Supporting Org

  • 1.  Recording Donations that are collected from our donors by our primary Supporting Org

    Posted 6 days ago
    Esteemed colleagues, please help! I have a conundrum. At LPU we have historically received individual (usually monthly) gifts from churches in the network of our Supporting Org. However, our S.O. has more recently given these churches the option of sending their donations to the S.O. and the S.O. distributes them in a quarterly batch/lump sum to LPU. Concurrent with this fund transfer, they send the gift detail for each gift in the batch, for our development purposes. Originally our understanding was we bear the responsibility of tax receipting (which seemed right in a stewardship sense) for all the individual gifts. Now we are hearing from the S.O. that they in fact are issuing tax receipt letters to the churches. This changes things tremendously. My dilemmas are as follows (and for context, we use BB Raiser's Edge):

    1. To me, this sounds curiously similar to a DAF org. In that case we'd normally record hard credit to the ORG, then give a soft credit for the gift on the originating donor (in this case church) record. 

    2a. The above is problematic because even though it would be technically accurate, it means that we would now be seeing 100s of donations each year appear in the gift history of our S.O. that they didn't technically give us. Granted, there are ways that this can be filtered out in reporting, but it seems like it "muddies" the actual gift history of our S.O.'s constituent record.

    2b. The above is also problematic because we have certain gift history in each record, and even though they are continuing to give to us ("we're getting the money regardless"), it looks differently in reporting to our Board of trustees. (In this case, is a separate breakout item appropriate to indicate income from the S.O. that originated from a third party individual church?) We also want to maintain stewardship/relationship with these churches based on their actual gift history, regardless of how the money came to us.

    3. The other option is to record gifts on the individual church's records as we have been used to, but we'd need to record them as non-tax deductible since our S.O. is sending receipting for the gifts to the churches. But, in essence, IS it a NON-tax deductible gift?? In past it would have been. But now it seems like it is not. Or it is, but it only is if it's recorded as hard credit in the S.O. record

    4. My next concern is reporting to the IRS. Granted, my position isn't the one that fills out the tax forms, but I have to make sure we record our donations in such a way that we have clean balancing to Finance, and proper donation reporting to the IRS, and that we have clearly defined processes for recording each gift type, and I have to be able to pull this data at the drop of a hat when our auditors come every year, illustrating our proper handling of donated funds.

    Granted, when it comes down to it, the "reported deductions" of each donor isn't so much the question, since of course a nonprofit (individual church) isn't going to be reporting deductions to the IRS, but our concern here is accuracy in our own reporting.

    Please help! I am grateful for any insight and wisdom of the community here.

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    Melissa Rufener
    Coordinator of Advancement Services
    Life Pacific University
    mrufener@lifepacific.edu
    http://www.lifepacific.edu
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  • 2.  RE: Recording Donations that are collected from our donors by our primary Supporting Org

    Posted 6 days ago
    Well, for starters, receipts are not necessary as none of these entities require them.  Regardless of the legal donor, they are - as you mention - all nonprofit organizations.

    But, indeed, these should be handled exactly as you might a gift from a DAF.  The legal donor is the S.O. with soft credit to the individual churches.

    However, you do not describe the nature of the supporting organization.  If they exist solely as a supporting organization to you, then you can, per CASE, record the gifts as though they were gifts to you.  However, since the funds were already deposited, you would want to enter the gifts in a way that does not generate a GL entry.

    I used to be very involved with the PCUSA in an advisory capacity.  If your S.O. is operating similarly, meaning they are not exclusively your S.O., then you do need to record these similar to gifts from DAFs and community foundations.

    John

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

    Serving the Advancement Community Since 1987






  • 3.  RE: Recording Donations that are collected from our donors by our primary Supporting Org

    Posted 5 days ago
    Thank you for your help John! I appreciate your expertise!

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    Melissa Rufener
    Coordinator of Advancement Services
    Life Pacific University
    mrufener@lifepacific.edu
    http://www.lifepacific.edu
    ------------------------------