restricted vs designated contribution funds

[treasurer4tbc]

Want to make sure my understanding is correct in the restricted vs designated contribution funds as I will be training another person to use power church 11.5. Just a little clarification needed. I'll use an example. Donor gave $1000 and specified for the youth dept. This was entered in the contribution youth fund as income. Just want to know if this should also be restricted since it was designated. Let's assume the donor made no other stipulations. Thanks in advance.

[NeilZ]

Want to make sure my understanding is correct in the restricted vs designated contribution funds as I will be training another person to use power church 11.5. Just a little clarification needed. I'll use an example. Donor gave $1000 and specified for the youth dept. This was entered in the contribution youth fund as income. Just want to know if this should also be restricted since it was designated. Let's assume the donor made no other stipulations. Thanks in advance.

FWIW .. you have to respect the donor's wishes, if they want the funds to go toward the youth fund, then you really "SHOULD" restrict it. This is really NOT a designation, but a Donor Restriction.

That means that you need to create a set of accounts (Fund Balance/Income/Release) using the Maintain List of Donor Restrictions function under Funds Accounting -> Setup, you then need to point that Contributions Fund at the Restricted Income Account in Fund Accounting.

For example:

We have a ongoing collection to replace our church doors. This is setup in Contributions as the Door Replacement Fund. This is pointing to the Door Replacement Income account which is a restricted account under our Building Improvements Accounting Fund (Fund BD)

So the Contribution Fund setup for the Door Replacement Contribution Fund under the ACCOUNTING tab looks like this:

Debit (bank) Account: BD-1110-000 (Checking)
Credit (income) Account: BD-4214-000 (Restricted Income)

On the other hand ... you have a Designation setup for Memorial Donations for Sue Jones (Contributions -> Setup -> Maintain List of Designations). Someone gives $100 in memory of Sue. You enter that as a contribution to normal Tithes & Offerings, and select the designation from the drop down list on the Contributions Entry form. This is not a donor restriction, the donation is going to the standard Tithes & Offerings for ministry use, but the person wants to give extra in memory of a person. There is no other restriction on the funds. It does not have to be restricted.

This is the way its done here, our church board has decided to do away with a separate memorial fund as it tied up funds that could be put to better use than sitting unused. The funds are used to support the mission of the church, the donor gets an acknowledgement of their memorial on the Contribution Statement, and we send them a card thanking them for the donation. We then tell the family that a total was given in memory of the loved one, and that these funds have helped us support our ministries.

[treasurer4tbc]

Thank you Neil. Looks as if I am doing correctly. Your reply leads to another question. Seems the real confusion lies in the definition of designated vs donor restriction. How to correctly distinguish between the two. In your example of the memorial fund why is this not a donor restriction or even designated since the donor specified Sue Jones.

[NeilZ]

Thank you Neil. Looks as if I am doing correctly. Your reply leads to another question. Seems the real confusion lies in the definition of designated vs donor restriction. How to correctly distinguish between the two. In your example of the memorial fund why is this not a donor restriction or even designated since the donor specified Sue Jones.

Its a designation as it was a gift in memory of, it was not restricted for a specific ministry or project. We discourage this as it tends to fund people's pet projects or whims, but does not help the church in its direction for ministry.

I also use designations to avoid having to create a separate Contribution Fund for such things as:

1. Flowers - we collect for Easter & Christmas, so these are designated when they come in before Christmas and Easter when we enter Contributions under the Flower Contribution Fund. All the donatons go into a liability account as these are funds that pay for the flowers and, as such, are not directly for operations, etc.

2. Special collections - again we may have special collections during the year for if the Gideons come give a talk and request donations, and so on. We put a designation on the entry, and these are entered into a Special Collection Contribution Fund, which is directed to another liability account on the FA side.

See ??