gift accounting presentation acso 2014
TRANSCRIPT
“Ask an Expert” Webinar Series
Gift Accounting and Budgets: Bridging the Gap Between
Development & Finance
Michael Costa, Executive Director, Philharmonia Baroque OrchestraKate Akos, Principal, Katherine Akos Consulting
What You Will Learn
1. Basic principles of gift accounting2. How development and finance can
work together
3. Special cases for gift accounting
4. Budgeting Best Practices
Tug of War
Development vs. Finance
It all comes down to…
•Donor intent
•Accuracy matters
Restrictions, Restrictions
Three asset classes:• Unrestricted• Temporarily restricted• Permanently restricted
Restrictions, Restrictions
• Permanently restricted– Principal cannot be invaded
• Temporarily restricted– Time or purpose restriction
• Unrestricted– No external restriction
Quiz
Endowments
• Donor restricted = permanently restricted
• Board designated = unrestricted Quiz:
$1M Donor restricted endowment$250k = Board designated endowment
Why isn’t the money showing up?
• Matching Principle– match expenses and revenue
• Accrual vs. Cash basis accounting– when revenue earned; when expense incurred
So where is the money?
• Statement of activities (a.k.a. Income statement)
• Statement of Position (a.k.a. Balance sheet)
When Can I Record a Gift?
• Cash
• Pledges + Documentation =
• Multi-year pledges
Getting It Right
• Who receives the gift?• Accurately identifying the gift
– Restrictions / Installments– Coding– Cover sheet
• Regular reconciliation
Gift Acceptance Policies
• Types of gifts accepted• Procedures for review and
acknowledgement• Resource
-http://www.councilofnonprofits.org/nonprofit-gift-acceptance-policy
Budgeting
• Development + Finance• History• Attrition and growth• Litmus test – rationale & strategy
Budgeting (continued)
• Big fish vs. little fish
• Board involvement in planning
• Operating vs. Special Initiatives
Re-Projecting
• New Information
• Major milestone
• Time of year – six months+
Tug of War
Development vs. Finance
A New Paradigm
Fundraising + Finance
