Contribution as well as Pledge Entries

[Joseph]

We are beginning a Pledge Program January 1, 2011. Is it possible to make entries to both the contributions and pledge? Can one report be issue for both of these?

Joseph

[NeilZ]

We are beginning a Pledge Program January 1, 2011. Is it possible to make entries to both the contributions and pledge? Can one report be issue for both of these?

Joseph

When you enter the pledges, you will enter what Fund the pledge is against. When Sunday Contributions are entered for that Fund, the system automatically updates the pledge data showing how much was given toward the pledge.

The main thing you have to make sure of is that the Contribution date falls within the dates of the pledge period.

For example:

You have entered a pledge for envelope 150 against fund 100-Operations of $25 a week ($1300 for the year), and the pledge period runs from 01/01/2011 through 12/31/2011.

You get a contribution on Jan 2nd from envelope 150 for fund 100 of $50. When this is entered using Contributions entry, the system sees that the date of Jan 2nd falls between the period 01/01 - 12/31/2011, and along with registering the contribution for fund 100, will also credit the pledge for fund 100.

If you decide to print contribution statements that Monday (and you check the boxes to include pledge information on the statement and have the pledge period date on the report set for 01/01/11 thru 12/31/11), the statement will show that envelope 150 contributed $50 toward Fund 100, under pledges it will show that there is a pledge for $1300, that $50 has actually been contributed, and that there is an unfulfilled balance of $1250.

Of course, you don't run statements every week, so if you do quarterly statements it will reflect the contributions to date.

Hope this helps.

[NeilZ]

However, at the end of the year, there is often a request to assign money given in the current year, against the pledge for next year.

Usually this happens so that the contributor can get claim the contribution against the current year taxes. When we were at a previous church, this usually occurred. The contributor would include a note in the envelope asking that so much of this contribution be applied to the next year.

What this involved was giving that note to our Contributions Secretary who entered the amount they wanted to credit to next year's pledge, as the starting pledge balance on their Pledge record in Powerchurch. All this entails is an update to the pledge.

This does not add money to the Fund for the next year, so the Fund total for next year does not reflect the donation given in the current year. That said, the Contributor will then have statements that truly reflect the status of their pledge.

If you have any questions on this, please ask.

[Jeff]

There is another way to handle when someone wants to give to the next year or prior years pledge. It is easiest to explain with an example.

In December 2010 someone wants to give and have it apply to their 2011 pledge. You need to date the contribution in 2010 so it will show on their 2010 contribution statement.

Enter the contribution with the 2010 date. On the contribution data entry screen, select the pledge button, this will show all the pledges made by this envelope number, select the 2011 pledge. This amount will be shown on their 2010 contribution statement but applied to their 2011 pledge.

Something to understand when doing it this way. In accounting this will be shown as 2010 income not as 2011 income. Some churches want this money to show as 2011 income, not as income in 2010. They do this to cover their budget. To do this they credit a liability account for deferred revenue in 2010 and then recognize the revenue in 2011. The accounting entry for 2010 when they received the contribution looks something like this.

Debit 01-1110-000 BANK (increase)
Credit 01-2850-000 Deferred revenue (increase)

When they get into 2011 they then transfer the liability to income.

Debit 01-2850-000 Deferred revenue (decrease)
Credit 01-4170-000 Pledge income (increase)

Churches who want this money to show as 2011 income usually setup a separate contribution fund for next year pledges that credits the deferred revenue liability account as above. They would then need to change the starting balance in the pledge as Neil pointed out.

I hope I have not confused you even further, but this is a common question this time of year.