Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Gift Accounting Presentation ACSO 2014
Similar to Gift Accounting Presentation ACSO 2014 (20)
Gift Accounting Presentation ACSO 2014
- 1. “Ask an Expert” Webinar Series Gift Accounting and Budgets: Bridging the Gap Between Development & Finance Michael Costa, Executive Director, Philharmonia Baroque Orchestra Kate Akos, Principal, Katherine Akos Consulting
- 2. What You Will Learn 1. Basic principles of gift accounting 2. How development and finance can work together 3. Special cases for gift accounting 4. Budgeting Best Practices
- 3. Tug of War Development vs. Finance
- 4. It all comes down to… •Donor intent •Accuracy matters
- 5. Restrictions, Restrictions Three asset classes: • Unrestricted • Temporarily restricted • Permanently restricted
- 6. Restrictions, Restrictions • Permanently restricted – Principal cannot be invaded • Temporarily restricted – Time or purpose restriction • Unrestricted – No external restriction
- 7. Quiz
- 8. Endowments • Donor restricted = permanently restricted • Board designated = unrestricted Quiz: $1M Donor restricted endowment $250k = Board designated endowment
- 9. Why isn’t the money showing up? • Matching Principle – match expenses and revenue • Accrual vs. Cash basis accounting – when revenue earned; when expense incurred
- 10. So where is the money? • Statement of activities (a.k.a. Income statement) • Statement of Position (a.k.a. Balance sheet)
- 11. When Can I Record a Gift? • Cash • Pledges + Documentation = • Multi-year pledges
- 12. Getting It Right • Who receives the gift? • Accurately identifying the gift – Restrictions / Installments – Coding – Cover sheet • Regular reconciliation
- 13. Gift Acceptance Policies • Types of gifts accepted • Procedures for review and acknowledgement • Resource - http://www.councilofnonprofits.org/nonprofit- gift-acceptance-policy
- 14. Budgeting • Development + Finance • History • Attrition and growth • Litmus test – rationale & strategy
- 15. Budgeting (continued) • Big fish vs. little fish • Board involvement in planning • Operating vs. Special Initiatives
- 16. Re-Projecting • New Information • Major milestone • Time of year – six months+
- 17. Tug of War Development vs. Finance
- 18. A New Paradigm Fundraising + Finance
- 19. The End Questions & Answers Michael Costa – mcosta@philharmonia.org Kate Akos – kateakos@gmail.com
Editor's Notes
- Typical scenario: Report at a board meeting – treasurer’s report different from development chair’s report Anecdote – Michael - My first day on the job with the auditor Kate – first conversation at Monterey Jazz Festival with Finance Director for 3 hours
- Accuracy is important -this may seem obvious, but it is not always followed - different perspectives, misunderstandings -reflect donors wishes -tell a consistent financial story – to board, to external community, to the auditors
- How does donor intent feed into the accounting? How many know these terms?
- Quiz Questions: 1. Annual fund contribution given with subscription renewal campaign 2. Contribution to bring a guest artist 3. Endowment gift 4. Gift to support a fundraiser which they cannot attend 5. Ticket sales for a concert 6. Corporate support of 30th anniversary concert (in two years) 7. Windfall bequest that board decides to put into a cash reserve
- Co-mingled investment accounts -Quiz: -$1M from in donor restricted endowment -$250k in board designated endowment What can you spend?
- The revenue for a project does not always show up at the same time as the expenses are incurred -ex: subscription revenue Matching principle – revenue and expense for a project show up in the same fiscal year -ex: donations for a future project (put in temp restricted) Accrual vs. Cash basis -cash treats everything at the time it comes in, very small orgs -most do accrual – matters when you earn revenue or ex: -subscriptions -pre-paid venue down payment -pledge – receivable in accrual; just record when it arrives for cash
- -Full income statement shows temp & perm – usually doesn’t go to the board that way ----is in audit or Cultural Data Project -Those changes do show up on the balance sheet Kate - Contributed Revenue Reports -Giving credit for devo’s work – show changes in temp and perm restricted gifts on revenue reports -Temp may go down even through unrestricted goes up
- Cash – record at time of receipt (properly coded) Pledges require written document – purpose and timing Multi-year pledges – critical to clarify purpose
- KATE TAKES THE LEAD STARTING WITH THIS SLIDE Good communication is essential between development and financial Financial controls – who receives and deposits Cover sheet example
- Starts with Devo & Finance conversation – partnering to understand what has happened/what is possible History – knowing giving history of individual; good data analysis makes a big difference Attrition & Growth – need to account for and make assumptions about both Litmus test – producing budget notes -explain your rationale for each number -describe your strategy for any projected growth – plugs not ok Big Fish vs. Little fish – depending on the size of your budget, donor base, and staff resources, need to triage who you can track individually vs. making group asssumptions -individually – board, majors, foundations, corporations
- Big Fish vs. Little fish – depending on the size of your budget, donor base, and staff resources, need to triage who you can track individually vs. groups about which you make assumptions -individually – board, majors, foundations, corporations Board involvement – Development committee owns the numbers/goals Special initiatives that come up during the year require separate sources of funding
- When should we re-project? New information – institutional funder makes a gift commitment Milestone – completion of fall direct mail or major fundraiser Time – once you are half way through the year, should start checking your assumptions against reality
- We started here
- We want to end here