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July 27, 2025
Question

Pass through donation

  • July 27, 2025
  • 1 reply
  • 20 views

We have a club and a foundation both non-profit. 

The club received a foundation donation. 

How would the donation be passed through the club? 

 

1 reply

Level 8
July 27, 2025

To record a pass-through donation, @Playawest45, your club will have to create a bank deposit to receive the foundation donation.

 

But first, since this is a two-sided transaction, you'll have to record a transfer donation from the non-profit foundation by creating an expense or check. Here's how:

 

  1. Head to Create + and then select Check/Expense.
  2. Pick the bank or payment account from which the funds are coming.
  3. Enter the PayeePayment Date, and the Payment Method (Optional).
  4. In the Category column, select an Asset or an Equity account to reflect the funds going out of the business.
    Please note that you can consult your accountant or tax authority to ensure the account selected is accurate.
  5. Enter the amount from the Amount column.
  6. Hit Save and close.

 

Then, switch to your non-profit club to enter a bank deposit to receive transferred funds. Kindly refer to the Receive transferred funds section in this article: Transfer funds between companies.

 

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July 29, 2025

Why would the donations be collected in Asset or Equity account? Seems the donation is liability as the money needs to be sent out. 

Rainflurry
Level 11
July 29, 2025

@Westknight 

 

As you surmised, the response from @mv32 is incorrect.  You're correct that the donation should post to a liability account.  Set up an other current liability (OCL) account called "Due to Foundation" or whatever makes the most sense to you.  Then, post the deposit to the Due to Foundation OCL account.  Assign the same Due to Foundation OCL account to the payment made to the Foundation.  That will zero out the liability account and keep this off your Statement of Activities.