Gifts Deferred by Finance to Next Fiscal Year

Miki Martin

Hopefully someone out here can help. Our Finance Department does not utilize a program that talks with RE (not sure if that affects things but wanted to put it out here).

We have a few gifts for scholarships that were made this current fiscal year (all of them in May 2022) but will not be utilized until the next school and fiscal year. Our Finance Department has put this money in their deferred scholarship fund, while I placed the gifts in the corresponding scholarship fund since that's where they're going.

Should I now create some new fund(s) to show they're deferred? I am sure this has happened previously but I have never changed the fund. I don't really want to create a fund (or multiple) for this since it is not a common occurrence. However, when I go to do reconciliation with Finance at the end of the month and the year my numbers will not match theirs since we have this money in two different locations. EOY is June 30 but if they're deferring this money will show all next year as being received in FY23 while I have it in FY22.

I appreciate any thoughts on this!

Tom Klimchak

Hi!

We have this sort of thing happen pretty regularly. In most cases we simply put the gift in the proper gift fund in RE and when it comes time to reconcile we often have to remind the finance department of where the money “really” is on their side. In some cases we'll include an attribute or a little note in the Reference field of the gift to kind of jog their memory or help them out. For us this crops up a lot with endowment accounts that aren't fully funded yet.

That's a little different from our Cash Clearing account. When we receive a gift with no designation we'll put the gift into Cash Clearing, post that to the finance department and let the money sit there until we receive more information. When we do then we adjust the money out of Cash Clearing and into the proper fund. We almost always post that adjustment.

That's how we do things, but it's obviously not the only way to do things. Ultimately it's going to be up to how you and your Finance department want to work things out. Good luck!

Steven Cianciarulo

If it is a rare occurrence, I would think of it as a “reconciling item” and note it on the gift.

I think it's important to consider RE the donor database and not a financial database. Recording the gift as you suggest seems to be correct and true based on the donor's intent, and the decision of when to spend something is an internal matter to the organization.