[Nonprofit_Bookkeeper]

Hi Allison, I can’t point you to a specific guideline at the moment, but yes, generally, if you fundraise around a specific event or cause, those donations are considered to be restricted. Given that, you will want to be sure you know how much you need to raise and consider what you can do with those funds if you do not raise enough or raise too much. Many nonprofits fundraise instead for their general fund, but describe the many initiatives, or even just 2-3, they want to address with their funds. In that way, someone who may be interested in a particular initiative may feel compelled to give, but the organization is not confined by the restriction.

[Robert]

Can you recommend how to book the proceeds when you are holding a capital improvement fundraiser for a new building? Do you book it as donation income, or does it go in the equity section as capital contributions until it is used to build the facility?

[Nonprofit_Bookkeeper]

Hi Robert – Sorry I missed your question! I must not have checked off that little “notify me of new replies” box. You would want to book capital campaign contributions as restricted contributions, so it would fall into your Net Assets With Restrictions equity line, but they are still contributions, revenue, received within your fiscal year. Essentially, you’re crediting (increasing) your contributions revenue account, and debiting (but also increasing) your Net Assets With Restrictions equity account. How you do that may depend on what software you’re using and how you’re using it.

[Nancy]

Hello!

Do you use QuickBooks at all? I only ask because Gregg Bossen, Owner and CPA of QuickBooks Made Easy explains in detail how to handle special events that may be programmatic. He had a great example in his training materials that uses a conference as an example of a program initiative, that still “made money”. But a lot of it boils down to what restrictions your funds may have.

[Susan]

You might consider adding language (“fine print”) to any materials promoting the fundraising saying the funds may be used at the organization’s discretion–not necessarily for that project (for example if the fundraiser earns more than is needed). I believe this is a fairly common practice.