Releasing restricted funds

[Turning Point]

We have a food pantry in our church. Someone anonymously donated 10,000 specifically for the renovation of the area set aside for their use. My question is, if the renovation never happens, how do I release the money? I can't return it to the donor because no one knows who it is.

Lisa

[NeilZ]

We have a food pantry in our church. Someone anonymously donated 10,000 specifically for the renovation of the area set aside for their use. My question is, if the renovation never happens, how do I release the money? I can't return it to the donor because no one knows who it is.

Lisa

OK ... this was in Contributions, but its more an accounting question. I'm going to assume a few things:

1. The funds are currently in a Donor Restricted Account under Operations, and its a Temp Restricted account, and the funds are in the same checking account as normal operations funds.
2. You regularly release funds for other such temp restricted accounts.

Before you start, do a Powerchurch BACKUP of the Accounting files. This will give you a base that you can revert to if the transaction does not work the way you think it should

The easiest way to move the funds is to head to Accounting -> Funds Accounting -> Enter Transactions. When the "Enter Transactions" window appears enter a reference that would make sense to you such as Release Unused Fnds, and add more in the Transaction Desc box, and in the memo box at the bottom of the window. I'd add as much info as possible so if someone looks at this later they understand why it was done.

Then click on the Release Restricted Funds button. The Release Restricted Amounts window will appear. Select the Restricted fund from the list, click on NEXT, then enter the amount to release. Click on Finish.

The system will create the proper entries, then just save, and then Post Transactions. The funds will then be moved from the Restricted Account and will show up in the Unrestricted Net Assets.

Again, if the original assumption is incorrect, please come back and let us know how you're system is setup, where the funds are and where they would be moved to.

[Turning Point]

Well, I think I wasn't clear in my question, although I do appreciate the information you provided. I was really asking about the legality of it. I am under the impression that if someone donates money but specifically says it's to be used for one thing, then it can only be used for that.

So with this donation, which did have a stipulation on it, I am wondering what to do with the money if the renovation does not happen since we have no idea who the money came from.

Maybe this is something I should ask a CPA?

Thanks.

[NeilZ]

Well, I think I wasn't clear in my question, although I do appreciate the information you provided. I was really asking about the legality of it. I am under the impression that if someone donates money but specifically says it's to be used for one thing, then it can only be used for that.

So with this donation, which did have a stipulation on it, I am wondering what to do with the money if the renovation does not happen since we have no idea who the money came from.

Maybe this is something I should ask a CPA?

Thanks.

OK ... the legality comes down to this. If you have no idea who the donor was, you cannot contact them to get any type of authorization to use it in any other way. That could be a problem unless the church board who makes policy, and makes decisions for the congregation, decides that the renovation is not needed, and the funds could be put to better use somewhere else.

We've made it a policy that any donations do not come with 'strings attached'. The church board makes all decisions on how funds are spent, and unless there is a specific appeal for funds to be used in a certain way, funds that come into the church are spent at the discretion of the board in support of the Church's mission in the community and the world.

So .. should you check with a CPA, yes, but I'd also check with your church board. Someone may know who gave the funds, and they can then be contacted.