How to record donations by check

How should a nonprofit record donations by check, specifically when it is from a joint bank account? Should they be recorded as being from the person who signed the check or from both people? Also, should donation accounts and end of year tax letters for married couples be together or separate? You cannot know for sure whether they file jointly or separately.

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Aug 31, 2020
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Check Donations
by: Lisa London, CPA

Great question. It is important to have a church policy on recording checks so you stay consistent over the years. Note that your policy is for situations the donor has not specified whose name they want the donation to be applied to.

Here is an excerpt from Vickey and I's Church Accounting-The How To Guide for Small & Growing Churches

Sometimes it can be difficult to know how to record the contribution to a donor, so we have some general guidelines. These can be modified for your particular church's needs, but are a good starting point.
When recording a check from a joint account, design consistent rules such as:
• If a husband and wife’s names are on the check and they both attend your church, record in the husband’s name.
• If just the wife attends, record in her name even if the checking account is in her and her husband’s name.
• If the wife has her own checking account and uses that account to give contributions, record in her name only unless told differently.
• If there are two unrelated names on the contribution check, record the name of the person who signed the check.

If the contribution check is from a business, it must be recorded as the business’s name unless an individual’s name appears with the business name.

Hope that helps!
Lisa London, CPA
AccountantBesideYou.com

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If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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