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NonProfit pledged Endowment

Posted by Michael Davids 
NonProfit pledged Endowment
October 19, 2013 05:33PM
Hallie
NonProfit pledged Endowment new
September 30, 2013 10:49AM

Non Profit pledged to fund an Endowment over three years. How to set up the Endowment and how to pay the pledges, and how may all this be tracked: Original Endowment number, subsequent payments?

Thanks in advance



Edited 1 time(s). Last edit at 10/19/2013 05:34PM by Michael Davids. (view changes)
Re: NonProfit pledged Endowment
October 19, 2013 05:35PM
You should have your company set up as Non-Profit. If you use the Chart of Accounts for Non Profit you will see Equity accounts for Unrestricted and Restricted Net Assets, both with sub accounts "use Restricted or Unrestricted Net Assets and Transfers to and from Restricted and Unrestricted Net Assets" depending on the account you are using.

You would set up an Endowment Net Asset Equity Account. You would make an invoice for the Endowment. The Non Profit company in QuickBooks has templates for Pledge, Donations and Grants, which you can edit to be titled "Endowment Invoice".

You need to set up items for all of the above activities as well as "Endowment, Pledge or Donation Income acounts" You put the amount of the Endowment to the Income account on the invoice along with the Endowment #, then a negative of the same amount as Transfers to and from either Restricted or Non Restricted Net Assets, and the same amount using the item "Use Restricted Net Assets". The invoice would then have the total of the actual amount of Endowment because of the negative and positive amounts to transfer the Endowment to the Equity Account.

You can set up automatic transactions to pay the pledges. You will always need to transfer the payments as well as new Endowments, Grants or Donations by using the negative and positive entries to transfer to and from either account and Use" Increase or Decrease the Net Asset.

This is a very complicated issue. I recommend you go to the Non-Profit sample company and review the use of these accounts. Double click on all of these accounts, click on a transaction, click Edit Transaction to review it, hit Control+H to see the history and related transactions to the entry.

Ask your CPA for the correct accounts to use to be sure your process is correct.
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