Agency Fund Third-Party Donations
Hi am interested to see how you are treating your third-party donations to agency funds. Are you setting up a separate designated fund for these donations or are you including them in the original agency fund? Additionally, if you are including them in the original agency fund are you keeping track of what donations are third-party and what are not? If you are, how are you doing this? Thanks!
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Hi, All donations to our agency funds go directly into the fund no matter who they are from. I set up the donation notify for the fund advisor so they can acknowledge the gift from the donor. From my research, agency funds are their assets regardless of where they come from. Ultimately, we encourage the agency to solicit the donations and deposit but there are a few here and there that come in from the donation portal.
Karen Wolf
Operations Coordinator
Email karen@cfcwi.org
Web www.cfcwi.org
Facebook www.facebook.com/cfcwi
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Karen, do you also have your system automatically acknowledge the donor, or do you just notify the fund advisor and trust that they will?
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If we received a donation to the fund we do acknowledge it to the donor but if the check is from the agency we do not.
Karen Wolf
Operations Coordinator
Email karen@cfcwi.org
Web www.cfcwi.org
Facebook www.facebook.com/cfcwi
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Hi @KarenWolf - we attended the Legal Matters of Community Foundations presented by COF last week and they said that third-party donations need to be kept separate and that the agency cannot request those funds due to "extreme hardship" without getting approval from the third-party donor. By giving the agency the third-party donations automatically you are going against the donor's wishes to donate to "X agency fund". It was suggested to do a sub fund as a designated fund to keep the third-party donations separate. We are looking into how that would work. As for acknowledgement, we as the foundation send the acknowledgement. Thanks
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@CathyWright, we are facing the same issue due to what we learned at the Legal Matters workshop and are trying to figure out the best way to handle this scenario. If you get any good insights or find another foundation that is doing it well/right, would certainly appreciate any more learnings you can share! I will do the same.
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So far we are leaning toward doing a sub-fund as a designated fund for third-party donations. We have a meeting set to talk with our CSM, @cullenmullany, to see if it's possible to do a combined fund statement. We did decide that we are going to start 1/1/2021 this way and everything prior to that will have all the donations lumped together. Yes, please let me know what you decide to do. Thanks!
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I am thankful for the all the feedback on this topic. I have had discussions many times with my ED regarding this. We truly do not get a significant number of donations to agency funds, however I did think it may be a good idea to make them private with a note in CSuite in order to require the donor to go to the organization and not process donations in-house.
@CathyWright can you elaborate on why "by giving the agency the third-party donations automatically you are going against the donor's wishes to donate to "X agency fund"." It seems as thought the donor would know who they are donating to and if they are choosing to do then it is within their wishes.
Karen Wolf
Operations Coordinator
Email karen@cfcwi.org
Web www.cfcwi.org
Facebook www.facebook.com/cfcwi
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Ben at COF said that since they gave to the organization's endowment instead of directly to the organization they intended for it to be in the endowment fund and therefore we cannot remove their donation unless given permission by the donor.
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@CathyWright Thank you for the feedback. Definitely food for thought with our process as well.
Karen Wolf
Operations Coordinator
Email karen@cfcwi.org
Web www.cfcwi.org
Facebook www.facebook.com/cfcwi
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As a Fund Accounting CSM (and prior Community Foundation CFO), I believe the best way to handle Agency Fund donations from the public is to create a sub fund. FASB 136 is the official accounting rule which basically states if the donor is the beneficiary then the balance of the fund is a liability for financial reporting only. In CSuite, set the Agency flag for the fund that holds the Agency donations. The sub fund would not have the flag set, so it is not reclassified at year (or month) end. Some Foundations create a Master fund for consolidated fund statements only. Two sub funds hold the agency donations separate from public donations.
Holly Spitz
Accounting Product Manager
Foundant Technologies, Inc.
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Holly - Great! We are going to set up the sub fund. We have a meeting tomorrow with our CSM. I am happy to see that we can do a combined fund statement. That is exactly what we want to be able to do. Thank you for your insight!
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We have a handful of funds where we need to keep donor money separate from agency money. As of 2.5 years ago it seems the best way to do this was to set up 2 separate funds and use subfunds. This is how we currently have it set up and its a bit of a headache. During our implementation about a year ago, my colleague thought one of our Foundant reps mentioned that within the financial management system there was a setting or a way to separate the sources of money to maintain one fund. DOes anyone knwo if this is possible? Is anyone handling this scenario in a way other than creating two separate funds?
Thanks!
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