How to post transactions re 'earmarked' contributions, and how to post in-kind contributions

[Adrien Monteleone]

I’d double check with a CPA or legal advisor concerning the ‘earmarking’ of donations if your organization takes them as tax-deductible in the U.S.

I could be wrong, and I may only be thinking of certain types of non-profits, but my understanding is that tax-deductible donations to non-profits cannot be earmarked by the donor.

If that’s the case, it would save you some accounting work.

Regards,

Adrien

> On May 18, 2017, at 10:03 AM, Anita Graves <anitagraves at mac.com> wrote:
> 
> Dear All, 
> 
> I am the treasurer for a religious organization and we have contributions coming in that are earmarked for a certain purpose.  I propose to enter these as separate Asset child accounts and then spend them in the corresponding expense account.  Do I have that right?
> 
> What do I do with ‘in-kind’ contributions?  No cash changes hands but it is the same difference, so do I debit the cash income account and credit the expense account?
> 
> Thanks for helping, everyone.
> 
> Anita
> 
>> 
>> Exactly—the bank shows our actual lump asset, but we care about the movement of these ‘earmarked’ funds and keep them in our reports, so we know at a glance how much spendable money in the bank we actually have, as opposed to what the bank statment gives as our balance.
>> 
>> Anita
>> 
>>> On 18 May 2017, at 5:49 PM, Maf. King <maf at chilwell.net> wrote:
>>> 
>>> On Thursday, 18 May 2017 15:39:59 BST you wrote:
>>>> Maf, I forgot to mention an important thing:  I am not moving money from the
>>>> bank, I am keeping it in the GC account tree along with cash, current,
>>>> savings accounts, so one would only know about these funds that are set
>>>> aside by looking at the GC accounts, not by looking at the bank statement. 
>>>> It initially comes in as a contribution, and so I would put the
>>>> contribution in the asset subaccount, as an earmarked account, and then
>>>> spend that balance down to zero in the expense account.  Is that right?
>>>> 
>>> 
>>> Yes.  your GC bank account can have sub-accounts - virtual "pots" of money 
>>> that only show up if you look at GC.   The bank thinks you have 1 "big" 
>>> account, you think in terms of several mini accounts within the main bank 
>>> account that keep your reserved totals easy to find...
>>> 
>>> Maf.
>>> 
>> 
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