Pass Through Contributions Setup

[lakesidechurch]

I am trying to bring some sense of order to how I handle pass-through contributions in Power Church.

Right now I have moved a lot of these into different funds, for example:

Fund 65 Chapel Fund - Income that will be used for chapel renovations

Fund 85 Fellowship Activities - Money is collected for these activities and used to pay the expenses

Fund 90 Youth Activities - Tracking pass through income for Camp, Youth Dinners and Activities

In most of these funds I have setup a separate Income & Expense account to track the pass-through.

For example:

Youth Dinners Income
Youth Dinners Expense

Laser Tag Income
Laser Tag Expense

Am I creating more work than necessary?

Should I should just use liability account for these pass-throughs?

And if there is money left over, I need to transfer it into the General Fund. How do I do that with these income and expense accounts?

I just need a set way to handle this stuff because it is driving me crazy!

Thanks so much for your help!

Mindy

[NeilZ]

I am trying to bring some sense of order to how I handle pass-through contributions in Power Church.

Right now I have moved a lot of these into different funds, for example:

Fund 65 Chapel Fund - Income that will be used for chapel renovations

Fund 85 Fellowship Activities - Money is collected for these activities and used to pay the expenses

Fund 90 Youth Activities - Tracking pass through income for Camp, Youth Dinners and Activities

In most of these funds I have setup a separate Income & Expense account to track the pass-through.

For example:

Youth Dinners Income
Youth Dinners Expense

Laser Tag Income
Laser Tag Expense

Am I creating more work than necessary?

Should I should just use liability account for these pass-throughs?

And if there is money left over, I need to transfer it into the General Fund. How do I do that with these income and expense accounts?

I just need a set way to handle this stuff because it is driving me crazy!

Thanks so much for your help!

Mindy

Mindy,

this is actually more of an accounting question rather than contributions. The contributions side of the house doesn't really care what you do over in the Funds Accounting side. Contribution Funds are merely a way to track the funds for the donors, its the setup of the funds that actually matter on the Funds Accounting side of the house. However, how you setup the Contribution Funds as far as their numbering scheme can make things easier for you when it comes time for those tax statements.

Lots of those items you list are not deductable per the IRS, so keeping those at a numbering scheme of, say 100 and above will allow you to only select those you want to incorporate on the end-of-year statement ,that is all those funds numbered 99 and less.

Now as far as the accounts on the Funds Accounting side, I do believe you may be over complicating the setup, however, as I'm not as familiar with the accounting side, as I am with the Contributions side, I'll defer to more knowledgeable types to give you advice there.

BTW .. I think that there may be a problem with your definition of Pass Thru. The definition of Pass Thru (as defined in the Tales from Tech 2 06/02/2005 is:

PASS-THRU CONTRIBUTIONS

A pass-thru contribution is basically money that the church is taking up to give to another organization. The church isn’t using the money. They are giving it to another entity for their use.

If the church took up a collection to give to a local soup kitchen, then that’s a pass-thru because the money is “passed through” the church to the other organization (hence the name).

All the items you list, seem to be either budgeted items, that would be covered under existing ministries, or reimbursable accounts where the church initially funds the activity, and then is reimbursed.

[lakesidechurch]

Thanks for the reply. Is there a way to move this question into the Fund Accounting portion of the forum?

Mindy

[NeilZ]

Thanks for the reply. Is there a way to move this question into the Fund Accounting portion of the forum?

Mindy

I suspect it will probably move eventually in a day or two

[JohnDMeyers]

Mindy:

When we have a church Bar-B-Q, or some other event where there is a registration fee, as NeilZ said, these aren't tax deductable donations, so we don't enter them with envelope numbers.

Instead, we collect all the money, keeping a record of who gave on a piece of paper, basically, and making one entry into Contributions like this:

(Contribution) Fund 120 Church Bar-B-Q
DB 01-1110-000 general checking
CR 01-4420-000 Church Bar-B-Q income

Envelope #1 - Cash
Fund 120
Amount=$total income for Bar-B-Q

That way, we have a record of the income (and the expenses) without putting a non-tax deductable item on an individual's contribution statement.

Pass-through contributions are when you collect money to give to another missions organization, or another non-profit organization, but not for internal use.

[wms7328]

I can show you how we have set up accounting for pass through funds. First as others have suggested, we use contribution funds with numbers over 100 so when I run the tax receipts, I don't include these contribution funds since they don't qualify as tax exempt donation.

Now for the accounting setup. I setup a separate accounting fund, in our case it's Fund 10. For Fund 10, I have chart of accounts that has an income and expense set up for each category. Examples: Study Books, Camp Fees, Church Retreat, etc. Any money that you will simply take and pass along to others we include in this fund. We also use it for special offerings that will be taken up and sent on to other organizations. Now for the special offerings since they do qualify for tax exempt donation, in contributions they have lower fund numbers. You only get the link between contributions and fund accounting that you have specified when you identify the account number for the contributions to post to in fund accounting. Contributions part really is not affected by the accounting funds you have defined.

At the end of the year, I balance Fund 10 out to zero by making the income and expenses equal. You can do this under each item or just post the difference in some miscellaneous category if it's not very large. Typically at the end of the year I have around $1,000 difference in income and expenses out of total activity of approximately $40,000. By forcing the income and expenses to equal each year, I don't build up any excess fund balance, either positive or negative, in the pass through fund.

Hope this helps, will be glad to answer any other questions.