CHARITY ACCOUNTING PROBLEMS

Mike or Penny Novack stepbystepfarm at dialup4less.com
Wed Feb 15 07:59:54 EST 2017


On 2/14/2017 11:21 PM, Seacook wrote:
> Hello,
> I am not an accountant but I have been pushed, kicking and screaming, 
> into the position of Treasurer in a small, very successful charity. 
> Much of the charity's success is due to the transparent way in which 
> we administer donated funds through dedicated donor accounts and how 
> they are then credited to specific beneficiary accounts. These 
> accounts, some 180 of them, are of necessity 'virtual' but are crucial 
> to accurate allocation of funds for beneficiary expenses which are 
> overwhelmingly paid to suppliers, often in cash, rather than directly 
> to the beneficiaries themselves.  For example, we pay school costs 
> directly to the schools.
>
> Donations and payments are identifiable either by invoice or receipt 
> numbers.
>
> Is there any simple way to incorporate these accounts without creating 
> an imbalance and to track the movement of funds into and out of the 
> virtual accounts and then to translate these into actual income and 
> expenditure through the charity's bank without complicating the 
> reconciliation of the bank account with a number of balancing virtual 
> transactions?
>
> Philip Allum
> Kelab Amal Langkawi 

Interesting problem. There are some of us here who do the bookkeeping 
for charities and so who might be able to come up with ideas for this. 
But first, you will have to tell us ALL of the different ways you will 
be required to produce reports, because with double entry bookkeeping, 
THAT is the usual problem << since you are allowed just ONE hierarchy of 
accounts, other groupings for reports present more or less problems.

In addition to be able to do "donor accounting" (how much did we get by 
donor) and "beneficiary accounting" (how much did we spend by 
beneficiary) what are all the other "else's". I think I might be 
seeing.... << guessing how your organization works >>
1) For every donor, how much of what this person donated has been used 
for which beneficiaries and how much still undedicated/available.
2) For every beneficiary, how much allocated for this person's benefit 
and of that, how much still unused/available.

BUT (a very big but) are you ALSO going to be required to report on 
things like "for what sorts of expenses" (how much in total/all bene's, 
for food, clothing, educational expenses, etc. )

The matter of reconciling the bank book, etc. should not be an issue. 
Especially with a large number of small transactions you do NOT want to 
make that difficult.

One thing to keep in mind, if the set of books that can do all of what 
is required ends up too complicated, solutions might be possible using 
multiple sets of books each structured to make one sort of reporting 
easier. The maximum "cost" associated with solutions doing that is 
multiple data entry < though that MIGHT be separate people jobs >

Also keep in mind that reports need not necessarily come DIRECTLY out of 
gnucash (but could possibly be a report exported from gnucash into a 
spreadsheet for further manipulation toward the final report desired.

Michael D Novack





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