Contribution Return

[ngaham]

Hello,
We had a doner provide a large donation to the church approximately two months ago via a personal check. I deposited this on its own deposit and entered it into the contributions module and posted it to fund accounting. The doner notified me that he had given that out of the wrong account - he stated he was supposed to donate it out of a DAF vs his personal account. We have since received the DAF check in the same amount and will be depositing that today. I will need to return the initial amount to him from the first donation and want to ensure I do this correctly. I had intended to write a check via AP and debit the income account. However, I am not sure the best way to fix his contribution record, so it is not reflective the donation as it is no longer appropriate given the DAF. Any help would be appreciated. Thank you!

[NeilZ]

Hello,
We had a doner provide a large donation to the church approximately two months ago via a personal check. I deposited this on its own deposit and entered it into the contributions module and posted it to fund accounting. The doner notified me that he had given that out of the wrong account - he stated he was supposed to donate it out of a DAF vs his personal account. We have since received the DAF check in the same amount and will be depositing that today. I will need to return the initial amount to him from the first donation and want to ensure I do this correctly. I had intended to write a check via AP and debit the income account. However, I am not sure the best way to fix his contribution record, so it is not reflective the donation as it is no longer appropriate given the DAF. Any help would be appreciated. Thank you!

OK to reiterate ... the first check went through without a hitch, but the donor messed up on his end. So he then cut another check from another account and the church is to return the funds?

I take it that the amounts are the same? Then I would not touch the original Contribution entry, the amount is the same, and the credit will still be his.

I would treat this as a 'pass through' donation, that is, it doesn't show up as new church income. The reason, it really isn't new income, you're just acting as a check cashing service in this case. Frankly, if you don't know this donor well, I'd worry about some sort of money laundering scheme.

However, back to how to take care of this.

I would deposit this and enter the deposit via a Fund Accounting transaction to a LIABILITY account normally used for pass-through donations, if you don't have one setup, create it as you'll probably need it sometime in the future. You CREDIT liability and DEBIT checking (or whatever bank account you use) Enter as much narrative and detail as to why this was deposited in this manner in the note area of the transaction for future audit purposes.

When you write the check, write it from the liability account, much in the same way you write other liabilities such as payroll taxes, health insurance, and other such payroll liabilities.

That is you DEBIT checking, and CREDIT the liability account.

Does this help?

[ndgaab]

Hi Neil,
Thanks for the reply. Yes the amounts are the same, however, the individual will no longer receive the tax benefit from us due to it being a Donor Assisted Fund so I need to remove it from his contribution statement.

[NeilZ]

Hi Neil,
Thanks for the reply. Yes the amounts are the same, however, the individual will no longer receive the tax benefit from us due to it being a Donor Assisted Fund so I need to remove it from his contribution statement.

In that case, reverse the contribution, and DO NOT POST it to Funds Accounting. This will remove that contribution from his record, but not mess up the Accounting income. As far as the handling of it to repay him, follow what I originally said.