Non-Profit Income... is it Programs, Admin or Fundraising?

[jdrepjc]

Helping a non-profit transition to Quickbooks. They have many individual donors to send money to specifically help the company maintain the salaries of certain staff members. Example: Joe Doe sending $100/month to support the employment of Jan Rogers. Is this income temporarily restricted or unrestricted? Should they class as Programs, Admin or Fundraising? The company will not reduce Jan's salary is Joe Doe stops sending the money... Joe is simply helping the company maintain their ability to pay competitive salaries to employees. Thanks!

[qbteachmt]

You didn't state which 501(c)(?) this is. That matters.

For instance, as a 501(c)(3), you cannot call it a deductible donation when it supports Admin operations. That would need to be donated for purposes of the program and then it is part of the restricted pool to support program staff. Example: You "endow" the first violinist "chair" for the symphony orchestra. That pays the cost for hiring and keeping that position.

In your example, you didn't describe what Jan Rogers' job is for this entity.

Fundraising isn't any of what you described, unless Jan Rogers is a fundraiser, and that is not a donation position, either. Fundraising is one way to fund Administration. That would be unrestricted funds, and the public typically got something of value for the money they paid at the Fundraiser, so that also is not a deductible donation.

"Joe is simply helping the company maintain their ability to pay competitive salaries to employees."

Is he? Is he donating to the organization or to Jan? Because supporting Jan is like missionary support. Have you read up on these activities in the IRS publications or church guidelines? A lot of church accounting guidance is available on the web.

You realize you are Lost on the Internet? The QB Community is at this link:

https://quickbooks.intuit.com/learn-support/us-quickbooks-community/misc/03/community-us

[jdrepjc]

Very helpful reply.  Thanks for the straightforward approach.  Yes, I am frequently lost.  It is a 501(c)3.  I believe in this case the company does an honest job of explaining to the donors that the goal is not to pass the money straight to the employee but to support their role.  And the company pays at least half the salary of each employee from unrestricted funds.  Am thinking I'll work with them to record those funds under programs and then expense out a percentage of the staff salaries to programs as well.