by David
(Oakland TN)
Do we spend designated funds before the budget line funds are spent each year? I can't find that anywhere in these accounting procedures. Thanks.
3Comments
Using Designated Offerings
AAnonymous
I have a policy of using designed funds first, then against a line item in the budget.
Example. In the Church budget there is a line items for missions, say $1,000. During the year a member give an offering to the Church of $50.00 designed (temporarily restricted) as missions. Now assuming the the Church spend $75 on missions, I would first use the $50.00 of designed (temporarily restricted) offerings and then use $25.00 against the line item in the annual budget.
Example. In the Church budget there is a line items for missions, say $1,000. During the year a member give an offering to the Church of $50.00 designed (temporarily restricted) as missions. Now assuming the the Church spend $75 on missions, I would first use the $50.00 of designed (temporarily restricted) offerings and then use $25.00 against the line item in the annual budget.
Order to pay Designated Funds
AAnonymous in NC
There is no rule that designated funds have to be spent first during any year; all available monies might have to be spent on salaries first or electricity, or heating. Designated funds simply mean that eventually and in a timely way those funds have to be used as the donor specifically intended.
using funds
AAnonymous
I'm not sure what you are asking, if you are asking about fund accounts such as missions that you have a budget for and someone designates a donation to "missions" then yes that amount goes towards the amount.
Say $50 is budgeted and you receive a $10 specified offering so, that amount($10) is applied and $40 used from budgeted and giving would equal the $50 budgeted to missions.
Make sure you have a "cap" on yearly given to missions so you can not be found by the IRS to be giving private benefit.
Policy should also state anything over budgeted will be transferred into general.
The IRS feels anything given in the offering is to the church and they are responsible on how it is used, unless to a specified individual and then you must give to the specified individual, which should be discouraged as it can cause problems for the church.
Hope this helps
Say $50 is budgeted and you receive a $10 specified offering so, that amount($10) is applied and $40 used from budgeted and giving would equal the $50 budgeted to missions.
Make sure you have a "cap" on yearly given to missions so you can not be found by the IRS to be giving private benefit.
Policy should also state anything over budgeted will be transferred into general.
The IRS feels anything given in the offering is to the church and they are responsible on how it is used, unless to a specified individual and then you must give to the specified individual, which should be discouraged as it can cause problems for the church.
Hope this helps