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  • 1.  Reclassing Unrestricted donations

    Posted 09-28-2023 02:56 PM

    Hi all,

    If donors designate their donations to unrestricted support, meaning they did not put any restriction by the use of the donor, it will be placed in the annual fund. Is it possible to reclass those funds to a restricted fund? Meaning the institution wants to increase a specific endowment, lets say.  Isn't it possible to reclassify those donations to the restricted account on the financial side? 

    If yes, would that all be handled on the financial side only, but on the Advancement side the gifts still reflect that the donor gave to unrestricted purpose? Essentially money is just being transferred on the financial side of the house.  I am assuming we wouldn't change the donor gift fund, since acknowledgment letters went out, and its more of the Institution wanting to move finances around.

    Appreciate your insight,

    Anna



    ------------------------------
    Anna Simons
    TCS Organization
    asimons@tcsedsystem.edu
    ------------------------------


  • 2.  RE: Reclassing Unrestricted donations

    Posted 09-28-2023 03:27 PM
    If a donor states the gift must go to an unrestricted FUND, it cannot be reclassified. If they tell you to use the gift "where the need is greatest," you can put it pretty much anywhere. However, I ensure the receipt reflects that determination.

    If, after sending a receipt stating where the gift went, you need to confirm with the donor your plans to move their gift. That change should be reflected in both the Advancement CRM and GL.

    The Donor Bill of Rights is our guide in these instances.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Reclassing Unrestricted donations

    Posted 09-28-2023 03:34 PM
    You should check with State regulations, including UPMIFA. I remember reading that only a donor can endow a gift in some cases (or some states). 

    I remember at NC State a discussion (this was over a decade ago) that allowed us to place undesignated gifts into a quasi-endowment only if received through a bequest. And we had to have a written policy on that. All other gifts going into endowments had to be approved by the donor unless the gift was received in response to an endowment appeal.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


  • 4.  RE: Reclassing Unrestricted donations

    Posted 10-02-2023 10:23 AM
    Hi Anna,

    In general, how unrestricted money is spent is not a matter for the donor database to track - you want to track donor intent. It is not possible for anyone other than a donor to restrict funds, though, so no unrestricted money should be transferred into a true endowment fund. It is possible that funds like this are placed in a quasi-endowment account, which is basically an organization-created fund that works like an endowment fund, but which is subject only to organizational policy restrictions and is formally considered unrestricted funds. All of this would happen on the business side, not the advancement side, and would be managed by the endowment accounting team. 


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:




    Original Message


  • 5.  RE: Reclassing Unrestricted donations

    Posted 10-04-2023 08:06 AM

    Thank you everyone for your replies.  These have been very helpful!

    Thanks,

    Anna



    ------------------------------
    Anna Simons
    TCS Organization
    asimons@tcsedsystem.edu
    ------------------------------

    Original Message


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