When to restrict sponsorship funds?

Cathie Pelchat

Should dollars from sponsorship of an event be applied towards a Restricted or Unrestricted fund?


Does sponsorship necessitate that the gift be restricted strictly to the expenses of implementing and marketing the event? Or is the restricted/unrestricted status defined by whether the solicitation specified that the dollars would be used towards event implementation? And if the solicitation did not imply that, should the dollars technically be applied towards an unrestricted fund? Some of our sponsorships have very explicit designations, but now that CRM is a growing area of revenue, the line between sponsorship (to make an event happen) and marketing opportunity is much more blurry. 


Historically, we've restricted sponsorship funds. Every year, for instance, we plan a conference. We fundraise in honor of this event, but the cost of the event so exceeds the fundraising dollars, that general operating funds carry most of the cost. Should fundraised dollars be restricted, even if our solicitation doesn't specify use of funds? How closely do you track use of those funds, and where? in Raiser's Edge? In the G/L? Both? Do you go as far as to allocate staff time expense towards an event? And in the event that sponsorship exceeds the cost of an event, how do you handle those leftover funds? Do you roll over to next year's event, do you absorb them into general operations? Do you ask permission? How do you acknowledge these gifts? 


Any help would be much appreciated! Thanks!

Elaine Tucker

We "restrict" the fund in Raiser's Edge because it is for a specific purpose.  In our Accounting department, it links to a project in FE and goes into the Unrestriced Fund 01, and then our CFO will do any adjusting entries to move it on the Accounting side to Temp Rest or Perm Rest.