Release from Restriction

[latesa]

What if we have Donors giving contributions to our Mission accounts (general) and the church has several different Missions we donate towards. Can I release the money to whatever mission account I want?

If so, what if the donor restriction amount total less than what we give each mission a month. Should I hold donor restriction money until I receive a certain amount before releasing or just use the money when received along with unrestricted contributions?
For example if we give a total of $500.00 for missions each month but we collect only $45 from Donors this month. How would this transaction look?

[NeilZ]

What if we have Donors giving contributions to our Mission accounts (general) and the church has several different Missions we donate towards. Can I release the money to whatever mission account I want?

If so, what if the donor restriction amount total less than what we give each mission a month. Should I hold donor restriction money until I receive a certain amount before releasing or just use the money when received along with unrestricted contributions?
For example if we give a total of $500.00 for missions each month but we collect only $45 from Donors this month. How would this transaction look?

First off ... if the donors are giving to the general mission account, then this really isn't something that needs a donor restriction.

That said, in Accounts Payable you would setup an invoice for the amount, then click on the release restricted funds and select the restricted account you want to release the funds from.

Now you can release as much as you want, the system will keep track of how much you've released, and you'll see a negative balance until funds are added.

That said, I'd only release as much as was in the account.

[latesa]

Thank you for your response,
Follow up question, Since I already set up my Mission contributions as donor restriction and added the 3 other unique accounts that was created for this donor restriction, does this mean I can delete the unique accounts (Mission restricted equity, Mission Restricted Income,Mission Restricted release) as well?
If so, I'm guessing Missions would go under unrestricted Income category and I keep the expense category as well.
Is this correct?

[JohnDMeyers]

For example if we give a total of $500.00 for missions each month but we collect only $45 from Donors this month. How would this transaction look?

CR 02-1110-000 checking $500
DB 02-5460-000 missions expense $500

DB 02-4810-000 missions release $45
CR 02-4999-000 general release $45

I don't understand your follow up question. Are you saying that you will not be using the donor restriction accounts?

[latesa]

Thank you John Meyers,
Your response makes sense to me. My follow up question (that you did not understand) was a follow up question to a respond from NeilZ
From NeilZ
First off ... if the donors are giving to the general mission account, then this really isn't something that needs a donor restriction.

My question to you John is 'Is it correct that I set up our churches foreign mission contributions as a Donor Restricted account even if the Donor contribution goes to a "general" Mission fund. Our church donates to more than one foreign mission'
The good thing is I'm taking the online Accounting class tomorrow. It may help me see thing clearer.

[JohnDMeyers]

Here's how we handle our missions fund. First off all, we do have a separate Missions Fund, which in our case is Fund 02.

#1) We transfer 1/10 of our General Tithes into the Missions Fund as a matter of course. These would not be considered Donor Restrictions, because it is the church board that is placing the "restriction" on the money, and not the donor. I don't think we would ever transfer money back from the Missions Fund to the General Fund, and not use it for missions purposes.

#2) Then, we have people designating money to be used for missions. This is technically a "Donor Restriction". However, because we have a Missions Fund, we do not use the extra Donor Restriction processes available in PowerChurch to track this particular restriction.

Having it in its own fund insures the donor that the restriction will be honored. Like I stated, we would never see ourselves transferring money from the Missions Fund back to the General Fund. If we did, we would actually be violating the Donor Restriction placed on the designated money in paragraph #2, but not in paragraph #1.

[Jeff]

... if the donors are giving to the general mission account, then this really isn't something that needs a donor restriction.

I think Neil's point here was if you know that the donations are always going to be less than what you are spending on Missions then you don't necessarily need to go to the step of the donor restriction. Neil correct me if I am wrong.

Personally I would probably still do the donor restriction to make it clear that we are honoring the restriction. Also this restriction would be in place just in case some gave a large amount for missions that was more than one months missions expense.

[NeilZ]

... if the donors are giving to the general mission account, then this really isn't something that needs a donor restriction.

I think Neil's point here was if you know that the donations are always going to be less than what you are spending on Missions then you don't necessarily need to go to the step of the donor restriction. Neil correct me if I am wrong.

Personally I would probably still do the donor restriction to make it clear that we are honoring the restriction. Also this restriction would be in place just in case some gave a large amount for missions that was more than one months missions expense.

Basically, yes. My other point is that if people are making the effort to donate to the Missions fund, and it all goes into the general Missions income anyway, there is really no need to add another restriction, as there is an implied restriction on the Missions income anyway.

We basically have ours setup as a separate Contribution Fund, which then goes into a separate Missions Accounting Fund. At the end of the year, all the income into Missions, is dispersed, and we start off the new year with a zero checking account balance in that fund.

[latesa]

Thank you both,
I'll take both suggestions back to my Pastor to see which way he would like us to set it up.