FundSvcs Community

Hi Folks,

Can I get your input on the following situation? A college would like to set up an unrestricted fund called "The College of Arts Lab Equipment Discretionary Fund." The purpose of these monies will be limited to purchasing Lab Equipment. The fund will be promoted to donors as supporting lab equipment. Since this is an unrestricted fund, the College won't be able to charge IDC against gifts processed to this fund. If the fund was set up as temporarily restricted, the College would be able to charge IDC.

Finance says it's okay as long as the donor understands it's an unrestricted fund and it's well documented for the auditors.

What do folks think about this situation? Does anyone have guidance or best practices they can share?

Thanks!

Alan

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Alan Martinez
Gift Accountant
Cornell University
amm372@cornell.edu
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Alan,

What is your institution's definition of "unrestricted"? My understanding is that in the accounting world a fund is restricted when the fund has a specified purpose. In this case, both the name of your fund and the definition provided indicate that the monies are for a definitive purpose - "limited to purchasing Lab Equipment". It would seem that this fund is restricted and would fall under your IDC policy.

I'd recommend that the department reclassify the fund as restricted.

Would be interested in hearing how this turns out.

Best,

Michael

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Michael Smith
University of North Georgia
michael.a.smith@ung.edu
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